ASX 200 to bounce, S&P 500 rallies on Microsoft and Alphabet earnings

ASX 200 futures are trading 28 points higher, up 0.40% as of 8:20 am AEST.

S&P 500 SESSION CHART

OVERNIGHT MARKETS

• S&P 500 higher in Friday trading, finished off best levels
• S&P 500 and Nasdaq snap a respective three and four week losing streak, marking their biggest weekly gain since early November
• Big tech was the main driver of upside, with well-received earnings from Tesla (+14.4%), Alphabet (+11.6%) and Microsoft (+1.8%)
• Bullish talking points for the week – More momentum behind AI growth theme, Microsoft and Alphabet cleared a high bar for earnings, US March core PCE inflation printed in-line with estimates, no meaningful escalation in the Middle East and China tech rally
• Bearish talking points for the week – Further hawkish repricing of Fed pivot expectations (first rate cut not priced in until December), sticky inflation, stagflation concerns and AI capex investment concerns
• Markets brace for 10-year Treasury yield to breach 16-year high of 5.0% on US inflation worries (Reuters)
• Latest EPFR flow data shows investors pile into bonds and stock for the week ending 25 April (Reuters)

INTERNATIONAL STOCKS

• Microsoft delivered against a high bar for Q3 – Azure revenue growth accelerated to 31% from 28% in Q2, three percentage points above guidance and at the higher end of analyst expectations (Bloomberg)
• Alphabet rallying on big earnings and revenue beat, growth accelerated across Search, Youtube and Cloud as well as a new US$70bn buyback and maiden dividend (Reuters)
• Intel revenue guidance underwhelms, reinforcing concerns over pace of turnaround strategy (Bloomberg)
• Snap shares jump ~30% after Q1 revenue beat (CNBC)

CENTRAL BANKS

• Fed rate cut hopes slip away following latest strong US economic activity data (WSJ)
• BOJ leaves policy settings unchanged as expected, yen falls to fresh 34-year low (FT)
• BOJ Governor Ueda sees limited impact from yen weakness on trend inflation (Reuters)
• ECB Panetta says no Fed rate cuts mean extra ECB rate cuts will be needed (FT)

GEOPOLITICS

• Blinken meets China's Xi in Beijing amid ongoing tensions (FT)
• China's investment overseas tracking for highest in eight years (Bloomberg)

ECONOMY

• US core PCE rose modestly in March, up 0.3% month-on-month and 2.8% year-on-year, largely in-line with consensus (Reuters)
• UK consumer confidence rises as inflation eases, tax cuts support spending but still far from pre-Brexit levels (Bloomberg)
• German unemployment rises to highest level in a decade due to weak economy (Reuters)
• Tokyo core inflation slows to weakest since March 2022 but partly due to education subsidies (Bloomberg)
  
  

ASX TODAY

• ASX 200 set for a small bounce after a 1.4% selloff on Friday, which was the largest single session decline of the year
• Copper and Tech set to extend gains on M&A activity, higher commodity prices and robust US earnings
• BHP considering improved proposal for Anglo American after its US$39bn was rejected by the London-listed miner (Reuters)
• CBA to lift bonus limits from 50% of base pay to 80% as it opens a new front in the mortgage war with Macquarie (AFR)
• CSR independent expert concludes Saint-Gobain scheme as fair and reasonable, within the best interest of shareholders (CSR)
• Experience Co to unveil E&P Corporate-led strategic review (AFR)
• HMC Capital discloses 5.1% stake in GrainCorp (HMC)
• PEXA and Iress back on radar for private equity (The Aus)
• Ramelius MD Mark Zeptner sold ~691,000 shares at $1.9-2.11 per share (RMS)

BROKER MOVES

• Arena REIT initiated Buy with $3.97 target (UBS)
• Alkane Resources downgraded to Hold from Accumulate; target cut to $0.65 from $0.75 (Ord Minnett)
• Car Group upgraded to Overweight from Neutral; target increased to $39 from $36 (Barrenjoey)
  
  

KEY EVENTS

• Mon 29 April: Acrow (ACF) – $0.029, 360 Capital Mortgage REIT (TCF) – $0.035
• Tue 30 April: None
• Wed 1 May: DRA Global (DRA) – $0.11
• Thu 2 May: WAM Strategic Value (WAR) – $0.022, Waterco (WAT) – $0.07, Acorn Capital (ACQ) – $0.028, Bank of Queensland (BOQ) – $0.17
• Fri 3 May: None

• Dividends paid: Cardno (CDD) – $0.27, Eureka Group (EGH) – $0.007
• Listing: Tasmea (TEA) – a skilled services provider for mining, industrial and commercial sectors – is set to list at 11:00 am

• 10:00 pm: Germany Inflation (Apr)

This Morning Wrap was written by Kerry Sun.