ASX to Open Higher as Wall Street Experiences Declines

Australian shares are set for an increase, supported by a slight rise in futures, while Wall Street saw declines in major indices. Wall Street's session was influenced by key companies like Amgen Inc. (NASDAQ:AMGN), Chevron Corporation (NYSE:CVX), and Boeing Company (NYSE:BA), all posting losses. Meanwhile, the commodity market displayed mixed trends as iron ore strengthened, gold saw modest gains, and oil prices fell.

Wall Street Performance 

At the close of Wall Street trading:

- Dow Jones Industrial Average: -0.7% 

- S&P 500 Index: -0.2% 

- Nasdaq Composite: +0.04% 

After the closing bell, Micron Technology Inc. (NASDAQ:MU) soared by more than 10%, driven by better-than-expected quarterly earnings and revenue. The company emphasized its investments in artificial intelligence (AI) to meet growing demand, with plans to enhance profitability through 2025. This positive AI outlook helped re-energize investor interest in AI-related technology stocks.

Goldman Sachs Analysis 

Goldman Sachs Group Inc. (NYSE:GS) issued a note indicating that the strong performance of U.S. equities, particularly in the technology sector, reflects bullish sentiment. The firm highlighted large inflows into U.S. tech funds over the past year, largely fueled by optimism surrounding AI advancements. Goldman also reported that S&P 500 futures positioning remains near record highs, with no significant signs of de-risking in the market.

Key Stocks to Watch 

In Australia, several key events are anticipated. On Thursday, job vacancies and wealth data will be released. Brickworks Ltd. (ASX:BKW) and Washington H Soul Pattinson & Co. Ltd. (ASX:SOL) are scheduled to issue earnings updates, while Air New Zealand Ltd. (ASX:AIZ) will host its annual general meeting.

Meanwhile, Star Entertainment Group Ltd. (ASX:SGR) has finalized a significant funding deal, marking an important step for the casino operator in its strategic initiatives.

Market Highlights

- ASX Futures: Up 17 points or 0.2% around 7am AEST 

- AUD: -1% to 68.23 US cents 

- Bitcoin: -1.1% to $US63,441 

- Wall Street Closing Figures: 

  - Dow Jones: -0.7% 

  - S&P 500: -0.2% 

  - Nasdaq: +0.04% 

- New York-listed stocks: 

  - BHP Group Ltd. (ASX:BHP): +0.7% 

  - Rio Tinto Ltd. (ASX:RIO): +0.4% 

  - Atlassian Corp. (NASDAQ:TEAM): -0.4% 

  - Tesla Inc. (NASDAQ:TSLA): +1.1% 

  - Apple Inc. (NASDAQ:AAPL): -0.4% 

  - Microsoft Corporation (NASDAQ:MSFT): +0.7% 

  - Nvidia Corporation (NASDAQ:NVDA): +2.2% 

  - Alphabet Inc. (NASDAQ:GOOGL): -0.4% 

  - Amazon.com Inc. (NASDAQ:AMZN): -0.7% 

  - Meta Platforms Inc. (NASDAQ:META): +0.9% 

- Commodities: 

  - Spot Gold: +0.2% to $US2661.64/oz 

  - Brent Crude: -2.2% to $US73.49/barrel 

  - Iron Ore: +1.8% to $US97.40/tonne 

- Bonds: 

  - 10-year yield: 

    - US: 3.78% 

    - Australia: 3.90% 

    - Germany: 2.17% 

Market Drivers 

Chinese equities saw a significant surge in net buying activity on Tuesday, marking the largest inflow since March 2021. Goldman Sachs reported that this buying momentum was driven primarily by long positions in Chinese stocks, with a particular focus on A-shares.

In a related development, Wells Fargo & Co. (NYSE:WFC) revised its economic growth forecast for China downward, now expecting growth of 4.6% in 2024, below the government’s target of 5%. The bank attributed this revision to ongoing challenges in the property sector, weak consumer confidence, and persistent deflationary pressures. Wells Fargo noted that policy measures introduced to support growth have been inadequate to address deeper structural issues.

Meta’s Augmented Reality Push 

Shares in Meta Platforms Inc. (NASDAQ:META) hit a record high after the company unveiled its first pair of augmented reality (AR) glasses. The new device aims to blend the digital and physical worlds, marking a significant step in Meta’s broader metaverse strategy.

Upcoming Events 

- Local (Australia): 

  - Reserve Bank of Australia (RBA) Financial Stability Review at 11:30am 

  - August job vacancies at 11:30am 

- Overseas (US): 

  - August durable goods data and weekly jobless claims at 10:30pm 

  - Federal Reserve speakers: Collins, Kugler, and Williams 

  - Federal Reserve Chairman Jerome Powell to provide pre-recorded remarks at the US Treasury Market Conference

Fundstrat’s Equity Insights 

Tom Lee, head equity strategist at Fundstrat Global Advisors, recently highlighted a list of large-cap stocks showing strong potential. His top picks include Nvidia Corporation (NASDAQ:NVDA), Meta Platforms Inc. (NASDAQ:META), Uber Technologies Inc. (NYSE:UBER), Eli Lilly and Co. (NYSE:LLY), and Tesla Inc. (NASDAQ:TSLA). Lee emphasized that while September has shown volatility, the recovery of the S&P 500 index from its early-month declines signals strength in the broader market.

In contrast, Lee advised caution around certain large-cap stocks that have underperformed, including Pfizer Inc. (NYSE:PFE), Nike Inc. (NYSE:NKE), Intel Corporation (NASDAQ:INTC), Ford Motor Company (NYSE:F), and Boeing Company (NYSE:BA). Nvidia remains the only stock from the original selection to survive the recent market volatility.

Outlook 

Global markets are expected to remain volatile, with fluctuations driven by a mix of economic data releases, geopolitical tensions, and corporate earnings reports. Investors are closely watching developments in China’s economy and the tech-driven AI market, as well as ongoing policy measures by the Federal Reserve.