ASX 200 to extend bounce, strong US earnings lift the S&P 500 and Nasdaq

ASX 200 futures are trading 27 points higher, up 0.35% as of 8:30 am AEST.

S&P 500 SESSION CHART

MARKETS

• S&P 500 extends bounce and finished near best levels overnight
• Bounce supported by weakening US dollar and slight easing of bond yields in wake of softer-than-expected PMI data (perhaps the ‘bad news is good news’ theme is back)
• Major bounce beneficiaries include growth, long duration, small caps and lower quality
• Earnings ramping up with SAP (+5.5%) boosted by cloud backlog growth, Pepsi (-2.9%) earnings in-line though North American sales lagged, GE (+8.3%) beat and raised full-year view, UPS (+2.4%) beat and showed improved volumes and more
• Citi strategists say buy the dip as global equities more attractive after the recent rout (Bloomberg)
• Big Tech under increasing pressure to deliver on AI contribution to revenues and profits, BofA says (Bloomberg)
• UBS upgrades China stocks to overweight, citing earnings resilience and capital return (Bloomberg)

INTERNATIONAL STOCKS

• Tesla misses first quarter revenue and earnings expectations, announces plan to accelerate launch of new affordable models (Reuters)
• Apple's first quarter phone sales in China fall 19.1%, while rival Huawei's recorded 70% gain (Bloomberg, Reuters)
• Microsoft announces cost-effective small language AI model (Reuters)
• SAP stock rallies most since January as AI adoption drives cloud demand (Bloomberg)
• Spotify profits up but lower marketing hits user growth (Reuters)
• Google Search head warns of intensifying competition and regulation (CNBC)
• Amazon launches US$9.99/month unlimited grocery delivery service (Reuters)
• Walmart launches BNPL product with One despite recent expansion of relationship with Affirm (CNBC)

CENTRAL BANKS

• Markets now pricing-in growing risk of Fed rate hike amid stronger US data and hawkish Fedspeak (FT)
• BOJ to leave policy unchanged Friday as economists eye October hike (Bloomberg)
• ECB VP de Guindos says June rate cut seems like a done deal (Bloomberg)

GEOPOLITICS

• US drafting sanctions against Chinese banks for aiding Russia's war effort (WSJ)
• Biden tells Kiev military aid is coming after delayed US$60bn funding approved by House of Representatives (FT)

ECONOMY

• US services and manufacturing PMI for April all miss consensus to hit 4-5 month lows amid signs of weaker demand, inflation measures mixed (Reuters)
• Eurozone PMI expansion gains momentum on services sector activity (Bloomberg)
• Japan flash PMIs show manufacturers stabilising as services strengthen (Reuters)
• Australian flash PMIs show stabilisation in manufacturing activity, with new orders declining at the softest pace since last August (S&P) 
  
  

ASX TODAY

We're moving the ASX-related sections lower to create a better separation of Wall Street/overnight and local/upcoming headlines and insights

• ASX 200 set to open higher for a third straight session but still down 2.8% from 2-Apr all-time highs
• ASX will be closed on Thursday for Anzac Day
• Australian inflation data at 11:30 am AEST – which could trigger a knee-jerk reaction to the upside/downside
• Several sectors starting to bottom after 10-15% pullback from mid-late March highs – including Homebuilders, Tech, Healthcare, Uranium and more
• Gold experienced a wild swing, down 0.2% on Tuesday, from session lows of -1.5%. Let's see if local gold names can stabilise after yesterday's selloff
• Bluescope Steel could face selling pressure after US peers Nucor (-8.8%) missed earnings expectations amid lower earnings from its steel mills segment
• Seven Group says talk of Cleanaway buyout ‘completely untrue’ (AFR)
• Nick Scali to launch $46-50m capital raise to fund acquisition of Fabb Furniture (AFR)

BROKER MOVES

• 29Metals downgraded to Sell from Underperform; target up to $0.35 from $0.28 (CSLA)
• Accent Group initiated Overweight with $2.20 target (JPMorgan)
• Aurelia Metals upgraded to Buy from Hold; target up to $0.23 from $0.16 (Jefferies)
• Chrysos downgraded to Neutral from Overweight; target cut to $7.25 from $8.05 (Barrenjoey)
• Lifestyle Communities upgraded to Neutral from Sell but target cut to $12.85 from $14.24 (UBS)
• Lovisa initiated Neutral with $29.00 target (JPMorgan)
• Northern Star downgraded to Underperform from Outperform; target up to $14.80 from $13.95 (CSLA)
• Universal Store initiated Overweight with $6.20 target (JPMorgan)

KEY EVENTS

• Wed 24 April None
• Thu 25 April: None
• Fri 26 April: None
• Mon 29 April: Acrow (ACF) – $0.029, 360 Capital Mortgage REIT (TCF) – $0.035
• Tue 30 April: None

• Dividends paid: Ridley Corp (RIC) – $0.044, 360 Capital REIT (TOT) – $0.015, Australian Unity office Fund (AOF) – $0.015
• Listing: None

• 11:30 am: Australia Inflation Rate (Mar)
• 10:30 pm: US Durable Goods Orders (Mar) 

This Morning Wrap was written by Kerry Sun.