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Wall Street extended gains across the major averages on Wednesday as investors assessed their holdings in the final trading sessions of a very strong first half driven by AI and semiconductor stocks. The S&P500 rose 0.16% at the end of the midweek session, the Nasdaq rose just under half a percent and the Dow Jones ended the day up just 0.04%, recovering from a red start to the final trading week of June. Amazon shares rose 3.9% on Wednesday to reach a record high and tipped the tech giant’s market cap over US$2tn for the first time. Investors in the US now await the release of key PCE data out on Friday which will provide a key insight into how well the Fed’s rate strategy is working to achieve the target inflation of 2%.

European markets closed lower across the board on Wednesday, extending the negative trading sentiment of the week into another session. The STOXX600 fell 0.5% as auto and leisure stocks weighed on the index, while Germany’s DAX lost 0.12%, the French CAC fell 0.69% and, in the UK, the FTSE100 ended the day down 0.27%. Shares of German auto-making giant Volkswagen fell 1.64% after the company announced a $5bn investment in US-listed EV startup, Rivian.

Asia markets mostly rose on Wednesday, taking lead from the tech-rally in the US on Tuesday. Japan’s Nikkei gained 1.26% to close at a 2-month high, South Korea’s Kospi index rose 0.64% and China’s CSI index recovered some of this week’s losses to end the day up 0.65%. Singapore’s May factory output rose 2.9% in data out yesterday which beat economists’ expectations of a 2% rise, indicating strength in the Singaporean economy.

What to watch today:

• Locally on Wednesday investors reacted negatively to the latest inflation print out in Australia indicating the annual CPI or inflation rate rose to an annual rate of 4% in May, up from the 3.6% reported in April and well exceeding economists’ forecasts of a 3.8% reading in May. Investors naturally hit the sell-button on equities across the board in afternoon trade on Wednesday leading to a close of 0.71% lower for the ASX200, amid fears of the RBA potentially handing down another rate hike in months to come as inflation and key drivers remain sticky and stubborn. The reading weighs into RBA governor Michele Bullocks hawkish outlook for rates in Australia and will throw a curveball at for the RBA’s next rate decision.
• Lithium miners felt further pain yesterday with a widespread sell-off in the sector as the price of the commodity fell 5%, extending the month’s losses to 15%.
• Harvey Norman (ASX:HVN) shares fell over 8% on Wednesday as analysts’ at Barrenjoey predict weaker macro-economic conditions will hurt earnings for the retail giant.
• Collins Foods rally on Tuesday was short lived as investors hit the sell button yesterday sending shares in the restaurant operator down 7% on Wednesday after Citi retained its sell rating post the release of the results, with analysts at the broker citing they were disappointed to see management no longer expects margin improvements in FY25 against challenging market conditions.
• On the commodities front this morning oil is trading 0.07% lower at US$80.78/barrel, gold is down 0.92% at US$2298.48/ounce and iron ore is down 0.08% at US$106.46/tonne.
• The Aussie dollar has slightly weakened overnight against the greenback to buy 66 US cents, but is showing strength against other currencies with 1 AUD buying 106.85 Japanese Yen, 52.61 British Pence and 1 New Zealand dollar and 9 cents.
• Ahead of the second last trading session for June, the SPI futures are expecting the ASX to open the day down 1.09%, extending on yesterday’s inflation driven sell-off.

 Trading Ideas:

• Bell Potter has increased the rating on Paladin Energy (ASX:PDN) from a hold to a buy and have increased the 12-month price target on the uranium miner from $15.70 to $16.10 after the company announced it will acquire Fission Uranium in a scrip deal for a valuation of $1.14 billion. To compensate for the around 30% dilution in PDN shares, investors will gain exposure to one of the pre-eminent uranium assets in the Athabasca Basin for what the Bell Potter analyst sees as an attractive price.
• Trading Central has identified a bullish signal on Grange Resources (ASX:GRR) following the formation of a pattern over a period of 26-days which is roughly the same amount of time the share price may rise from the close of $0.37 to the range of $0.41 to $0.43 according to standard principles of technical analysis.