Good morning. Wall Street was closed on Friday for the Independence Day holiday, so there is no fresh US close to react to. In the last full session on Thursday the S&P 500 finished flat at 7,483 and the Nasdaq fell 0.8 per cent to 25,833, as chipmakers dropped for a second day and Micron lost about 7 per cent. The weekend's main market event was OPEC and its allies agreeing to lift output by a further 188,000 barrels a day from August, a fourth monthly increase; Brent settled at US$72.13, back near where it traded before the Iran conflict. The US 10-year Treasury yield is 4.49 per cent.
Locally, the ASX 200 closed Friday up 1.4 per cent at a record 8,844, led by the gold miners after a soft US June payrolls report of 57,000 jobs cooled expectations of another Federal Reserve rate rise. Gold rose 1.8 per cent to US$4,187 and copper 1.8 per cent to US$13,722, while iron ore was little changed at US$98.25. The Australian dollar is at US69.44 cents, up 0.4 per cent, as the US dollar eased. On the local rates picture, money markets now price no RBA cut before 2027, and some economists flag the risk of a fourth rate rise; the cash rate is 4.35 per cent and the 10-year bond yield 4.80 per cent.
Corporate news was light over the long weekend. IFM Investors lifted its holding in toll-road group Atlas Arteria above 60 per cent as its A$5.10-a-security cash offer nears its close, and Tesla reported record second-quarter deliveries of 480,126 vehicles. The week ahead brings the ISM services survey and a speech from the Fed's Christopher Waller today, minutes from the Fed's June meeting on Wednesday, and the start of the US second-quarter earnings season, with PepsiCo due on 9 July and Delta Air Lines on 10 July.
The cash rate is held at 4.35 per cent and the 10-year government bond yield is 4.80 per cent, up 6 basis points on the session and 68 basis points over the past year.
The US dollar index is at 100.86, down 0.5 per cent, with the euro at US$1.1440 and the yen at 161.27 per dollar.
Gold rose 1.8 per cent to US$4,187 and copper 1.8 per cent to US$13,722, while iron ore was little changed at US$98.25, down 2.1 per cent over five sessions.
The seven core members have added almost 800,000 barrels a day of quota from April through July; Brent settled at US$72.13, up 0.5 per cent, near pre-conflict levels as Strait of Hormuz flows recover.
Markets pared bets on another Fed rate rise; the 10-year Treasury yield is 4.49 per cent, up 1 basis point, and the 2-year 4.17 per cent. Fed chair Kevin Warsh declined last week to signal the July decision.
It is Castlelake's fifth approach, up from an initial 560 pence; the deadline to make a firm offer was extended to 3 August. The bid vehicle would be 51 per cent owned by EU nationals to satisfy airline ownership rules.
The bid vehicle crossed 50 per cent in early July, automatically extending the unconditional A$5.10-a-security cash offer, which is due to close on 7 July.
The push follows its acquisition of Gaming Analytics, a US provider of AI-based player analytics; its Interactive arm begins a Massachusetts iLottery contract in July.
Model 3 and Model Y accounted for 467,762 of the total; the shares fell about 7 per cent in Thursday's session despite the beat. Full financial results are due on 22 July.
The current agreement expires on 6 October; the union says it wants a return to market-leading compensation and is using an interest-based bargaining approach.
“We're all in the price stability business. That might not be our only business, but if there was a common thing I heard over the last couple of days, it was open-mindedness on these questions of AI and productivity. But we've all looked around, and we've seen that prices are too high.”
“The group of seven kept unwinding their production cuts, as widely expected. The near-term focus is how many tankers will manage to cross the Strait of Hormuz, and how quickly demand and Chinese crude imports recover.”
“Our investment in AI across the group is focused on harnessing opportunities that benefit our content creation and prototyping, thereby improving our speed to market.”
“Inflation remains far too high, and there is more work to do.”
“Things have been very volatile in terms of what the consumer reaction has been, and our continuing research suggests that the consumer is still cautious.”
“We have tremendous respect for easyJet, and we intend to support its future growth and transformation to a stronger, more resilient European airline.”
For wholesale clients only. Prepared by Arc Point OCIO Pty Ltd (ACN 693 569 765), Corporate Authorised Representative (CAR 1319046) of Capella Advisory (AFSL 550125), for wholesale clients within the meaning of the Corporations Act 2001 (Cth); it is not intended for, and should not be relied on by, retail clients. This note is factual market reporting and general information, with any arcpoint view clearly labelled as such. It is not personal advice and does not take into account any person's objectives, financial situation or needs. Information is drawn from sources believed to be reliable but its accuracy and completeness are not guaranteed. Past performance is not a reliable indicator of future performance.
Sources: Yahoo Finance, FRED, RBA, company filings.