Morning Wrap: ASX 200 futures flat, S&P 500 falls on hot inflation + Pro Medicus, Orora, South32 earnings

ASX 200 futures are up 4pts (0.04%) as of 8:30 am AEDT.

In a nutshell:

• US inflation was very hot, with headline CPI up 0.5% month-on-month vs. consensus for a 0.3% increase, marking the highest print since April 2023

• Markets finished lower but managed to rally off worst levels

• A massive avalanche of results from names including Northern Star, Origin Energy, IAG, Downer and more

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower, finished off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished lower but off worst levels, with the S&P 500 down 0.27% from session lows of -1.08%

• Today’s big story – Hotter-than-expected January US CPI print drove a hawkish repricing of Fed rate cut expectations

• Bond yields jumped 7-9 bps to a one-month high, driving the underperformance of rate sensitive sectors like Real Estate  

• Nvidia shares continue to struggle post-DeepSeek rout (BBG)

• Traders piling into wagers for higher US yields ever since last week's jobs report to be tested with today's inflation report (BBG)

• US companies may be beating Q4 profit estimates, but investors more worried about tariffs and high interest rates (BBG)

• China tech stocks enter bull market after DeepSeek's breakthrough (FT)

STOCKS

• JPMorgan begins layoffs for ~1,000 staff (RT)

• Chevron to cut up to 20% of its workforce by end of 2026 in plan to shave costs by up to US$3bn (CNBC)

• Airlines seeing pricing power on tighter capacity, strong consumer demand (Reuters)

• Super Micro's longer-term revenue guidance well ahead of expectations, still anticipates it will meet filings deadline (BBG)

• Lyft bookings guidance underwhelms as cold weather weighs on demand for ride hailing, announces $500M buyback (BBG)

• Baidu shares rallied after a source revealed its plans to release the next generation of its AI model later this year (CNBC)

CENTRAL BANKS

• Powell says January CPI report show Fed has more work left to do on inflation (BBG)

• Traders now pricing in just one rate cut in 2025 after hotter CPI (BBG)

• Bank of England's Green says caution is needed on future rate cuts amid supply issues (BBG)

TRUMP

• Trump refuses to budge on Gaza ownership plan as Jordanian King reiterates opposition to Gaza displacement (RT)

• Trump trade advisers finalising plans for reciprocal tariffs the President has vowed to impose (RT)

• EU, Canada and Mexico criticise Trump's metals tariffs, but stop short of threatening direct retaliation (RT)

• US corporate executives scramble to offset cost of Trump's move to slap 25% tariffs on key metals (FT)

• Trump's tariffs will flow through to car buyers, beer drinkers, home builders, oil drillers and other users of metal goods (NYT)

US INFLATION

• US January core CPI increased 0.4% month-on-month vs. 0.3% consensus, accelerating from a 0.2% rise in December and the highest monthly print since April 2023

• US January headline CPI up 0.5% month-on-month vs. 0.3% consensus and up from December’s 0.4% increase

• Annualised headline CPI up 3.0% vs. 2.9% consensus

• Shelter continued to be a sticky inflation point, with the sub-index up 0.4% and accounting for almost 30% of monthly increase, other inflation drivers include airfares (+1.2%), car insurance (+2.0% and used vehicles (2.2%)

ASX TODAY

• Alliance Aviation Services reports 1H25 EBITDA $101.2m vs. $91.8m consensus (10.2% beat), reaffirms full-year guidance (AQZ)

• Amcor CEO Peter Konieczny discloses purchase of 100,000 shares, beneficially owns 459k shares after the transaction (AMC)

• Arcadium Lithium receives Canadian approval for acquisition by Rio Tinto (RIO)

• Downer EDI reports 1H25 underlying NPATA up 67.1% to $127.1m vs. $110.4m consensus (15.2% beat) (DOW)

• Insurance Australia reports 1H25 NPAT down 13% to $778m, cash NPAT 6.5% ahead of estimates, guides towards lower end of mid-to-high single digit growth for FY25 (IAG)

• Mineral Resources provides update on roll out of new governance processes, including eliminating the use of company resources by key management (MIN)

• Northern Star reports 1H25 cash earnings of $1.14bn, in-line with guidance and reaffirms FY25 production guidance (NST)

• Origin Energy reports underlying profit growth of 23% to $924m, interim dividend up 9% to 30 cents per share (ORG)

• Telstra considering selling its data centre assets (AFR)

• Temple & Webster reports 1H25 net profit up 117% to $9.0m vs. $5.6m estimates (60.7% beat), February growth rates accelerated to 19% year-on-year, reiterates FY25 EBITDA margin guidance (TPW)

• Treasury Wine reports 1H25 NPAT up 31.5% to $239.6m vs. $246.6m consensus (2.8% miss), downgrades FY25 EBITS guidance to $780m from prior guidance of $780-810m (TWE)

WHAT TO WATCH TODAY

• Market resilience: US inflation was hot but markets were surprisingly resilient. The equal-weight S&P 500 finished down 0.58% from session lows of -1.16% and a yield sensitive commodity like gold closed 0.2% higher from lows of -1.14%.

• Avalanche of results: The above list is not an exhaustive list of today's results. There are still a few more to be announced before market open. At a glance, Downer reported a sizeable consensus beat and the stock been relatively range bound, Northern Star is printing cash (but not a surprise), Temple & Webster reported a massive beat and Treasury Wine could be under pressure after a slight 1H25 miss and guidance downgrade

BROKER MOVES

Lots of downgrades for stocks that surged after reporting better-than-expected results yesterday (BVS, CBA, CPU, EVN etc). The stocks are trading at expensive levels (relative to historical averages) but continue to deliver on earnings.

• Bravura Solutions downgraded to Underweight from Neutral; target up to $2.15 from $1.90 (JPM)

• Bravura Solutions upgraded to Outperform from Neutral; target up to $3.17 from $2.05 (MQG)

• CBA downgraded to Sell from Underweight; target cut to $110 from $113 (JARD)

• CBA downgraded to Underperform from Hold but target up to $142 from $131.30 (CLSA)

• Computershare downgraded to Hold from Buy but target up to $39.50 from $34 (JEF)

• Evolution Mining downgraded to Underweight from Neutral; target cut to $4.90 from $4.95 (JPM)

• Evolution Mining downgraded to Sell from Neutral but target up to $5.45 from $5.40 (UBS)

• Imdex downgraded to Neutral from Overweight but target up to $2.45 from $2.30 (JARD)

• Qantas downgraded to Neutral from Outperform but target up to $9.30 from $8.40 (MQG)

Stocks trading ex-dividend: 

• Wed 12 Feb: ResMed (RMD) – $0.06

• Thu 13 Feb: Dicker Data (DDR) – $0.11, Korvest (KOV) – $0.25, Plato Income Maximiser (PL8) – $0.006, Scentre Group (SCG) – $0.086

• Fri 14 Feb: Ansell (ANN) – $0.353

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None

• Earnings: ASX (ASX), Domain (DHG), Downer (DOW), EVT (EVT), Insurance Australia (IAG), Northern Star (NST), Orora (ORA), Origin Energy (ORG), Pro Medicus (PME), South32 (S32), Temple & Webster (TPW),  Treasury Wine (TWE), Viva Leisure

• AGMs: Graincorp (GNC)

Economic calendar (AEDT):

• 5:00 pm: UK GDP (Q4)

• 11:30 pm: US PPI (Jan)