ASX 200 to fall, S&P 500 and Nasdaq sharply lower on Middle East tensions

ASX 200 futures are trading 50 points lower, down -0.64% as of 8:30 am AEST.

S&P 500 SESSION CHART

MARKETS

• Major US benchmarks lower in Friday trading, finished near worst levels
• Dow and S&P 500 down for a second straight week, while Nasdaq down for a third
• Risk-off tone attributed to Iran’s major missile attack on Israel and worries that this will spark a wider regional war
• Risk-off atmosphere drove a spike in VIX and US dollar, a selloff in cryptocurrency markets and volatile price action for gold and oil – both finished off session highs
• Global equity funds dumped for second consecutive week on hotter inflation worries and pushback against June Fed rate cut (Reuters)
• EPFR data shows US large cap stocks suffered largest weekly outflow since December 2022 (Reuters)
• Oil likely to rise after weekend's Iran strike but longer-term trends may depend on Israel's response (Bloomberg)
• US and UK launch crackdown on Russian metals trade and limit Moscow's export revenue (FT)

ASX TODAY

• ASX 200 set for a heavy session on Monday, broad-based weakness is to be expected
• Sub sectors that sold off heavily overnight include lithium/rare earths, biotech, airlines and fintech
• Ampol may be interested in EG Group’s Australian service stations (The Australian)
• Gold Road Resources weighing bid for Greenstone Gold Mines (The Australian)
• Incitec Pivot fertiliser deal catches political heat (AFR)
• News Corp plots major shake-up as Meta money ends, Google deal nears (AFR)

INTERNATIONAL STOCKS

• Apple's Mac line up being overhauled with a new M4 chips focused on AI (Bloomberg)
• US regulators probing Morgan Stanley's wealth management unit over money laundering prevention measures (FT)
• Big banks struggling to implement handful of AI products (Axios)
• Cathie Wood's Ark Investment Management discloses stake in OpenAI (Bloomberg)

EARNINGS

• Of the 6% of S&P 500 companies that have reported for Q1, 83% have beaten EPS expectations, better than the 77% five-year average of 77% and aggregate earnings have so far beaten expectations by 12.4%, above the five-year average of 8.5%
• Wells Fargo (-0.4%) earnings top estimates even as lower interest income cuts into profits (CNBC)
• BlackRock (-2.9%) assets hit record US$10.5tn but inflows miss expectations (Reuters)
• JPMorgan (-6.5%) shares slip as outlook overshadows profit rise (FT)

CENTRAL BANKS

• Weak yen complicates BoJ rate hike timing (Reuters)
• ECB likely to enact hawkish cut in June but a strong deviation from Fed path unlikely (Bloomberg)
• Two BoE rate cuts now priced in following hotter US CPI data (London Times)
• BoK unchanged as expected, tweaks guidance for possible 2H24 rate cut (Bloomberg)
• Singapore central bank keeps policy unchanged amid elevated inflation (Bloomberg)
• PBoC expected to leave policy rate unchanged, drain some liquidity (Reuters)

GEOPOLITICS

• Iran launches 300+ drones and missiles at Israel (AP)
• Israel's defence relied on allied cooperation and multi-layered anti-missile systems (FT)
• Biden cautions Netanyahu, US will not participate in counter-offensive on Iran (CNN)
• US pressing countries such as China, Turkey and Saudi Arabia to convince Iran against striking Israel (FT)

ECONOMY

• US consumer sentiment slips, inflation expectations increase up to 3.1% in April from 2.9% last month (Reuters)
• China exports fall in March and miss consensus by big margins in setback to recovery (Bloomberg)
• German inflation eases in March, helped by falling energy and food prices (Reuters)
• UK GDP up 0.1% in February, rebounding from technical recession (Bloomberg)
• New Zealand manufacturing in longest stretch of contraction since 2009 (Bloomberg)
  
  

KEY EVENTS

• Mon 15 April: WAM Active (WAA) – $0.03, Cadence Capital (CDM) – $0.03, SDI (SDI) – $0.015, New Hope (NHC) – $0.17
• Tue 16 April: WAM Global (WGB) – $0.06
• Wed 17 April: Washington H Soul Pattinson (SOL) – $0.40
• Thu 18 April: The Reject Shop (TRS) – $0.10, WAM Capital (WAM) – $0.077, Horizon Oil (HZN) – $0.015
• Fri 19 April: WAM Research (WAX) – $0.05

• Dividends paid: Car Group (CAR) – $0.345, Kina Securities (KSL) – $0.05, Cochlear (COH) – $2.0, Saunders International (SND) – $0.02, Civmec (CVL) – $0.02
• Listing: None

• 11:30 pm: US Retail Sales (Mar) 

This Morning Wrap was written by Kerry Sun.