Morning Wrap: ASX 200 futures flat, S&P 500 gains for 4th straight day, Flight Centre downgrades guidance

ASX 200 futures are up 2pts (+0.02%) as of 8:30 am AEST.

In a nutshell:

• US markets continued to gain on trade-deal optimism as well as solid corporate earnings, falling bond yields and easing volatility

• Local sharemarket set to open relatively flat from the lack of upside for heavyweight financials and materials sectors

• Flight Centre cuts growth expectations, guides to flat year-on-year growth

Let's dive in.

S&P 500 SESSION CHART

S&P 500 intraday chart for the last two sessions (24-25 Apr) (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks higher, finished near best levels

• US weekly recap: Nasdaq (+6.73%), S&P 500 (+4.59%), Russell 2000 (+4.09%), Dow (+2.48%) 

• Constructive trade headlines support ongoing bounce, with China potentially exempting some US products from its 125% tariff, Bessent signalling progress in trade talks with South Korea

• US 10-year yield down ~33 bps since its brief 11-Apr spike to 4.59%, VIX also easing towards low-20s vs. 33 a week ago and 7-Apr peak of 60

• Markets buoyed by strong first-quarter earnings – of the ~36% of S&P 500 constituents that have reported, ~73% of reporters have topped consensus earnings expectations (below one-and-five year averages of 77%),  beating expectations by 10.0%, with a blended growth rate of 10.1% vs. 7.2% consensus

• Consumer-facing stocks see first spillover effects from tariff uncertainty – P&G flagged deterioration in consumer spending and $1-1.5bn tariff impacts for the next year, Pepsi lowered EPS guidance to flat vs. prior mid-single digits to reflect higher supply chain costs, Sketchers withdrew its FY25 guidance and more

• Market's ability to withstand tariffs seen as fragile, with nearly all margin growth in the S&P 500 coming from tech sector (BBG)

• Investors should sell into rallies in US equities and dollar, conditions for sustained gains are missing, says BofA (BBG)

STOCKS

• Alphabet beats revenue and earnings expectations, search ad revenue topping forecasts, announces $70bn buyback (BBG)

• Intel Q2 revenue forecast underwhelms due to trade and regulatory-related risks (BBG)

• Apple preparing to shift all US iPhone production to India due to US-China trade war (FT)

• Skechers pulls guidance on tariff uncertainty (RT)

• T-Mobile added fewer subscribers than expected in Q1 due to increased competition (RT)

• Hasbro forecasts as much as $300 million impact if China tariffs don't come down (CNBC)

• Walmart increasing focus on discounts to drive demand, introducing "manager's special" signs to highlight price cuts (BBG)

• IBM earnings top forecasts but flags near-term uncertainty from client pause (BBG)

• Chipotle sees slowdown in consumer spending as comps unexpectedly go negative in Q1 (CNBC )

• Southwest Airlines pulls guidance due to uncertainties from Trump's trade war (RT)

• Adidas almost doubles operating profit due to strong demand for classic shoe models (BBG)

• Nestle reports better-than-expected Q1 sales growth, maintains 2025 outlook (FT )

CENTRAL BANKS

• Trump says he might call Fed's Powell to press for a rate cut but has not as of yet (Axios)

• Fed's Kashkari says US trade policy uncertainty could lead to layoffs, with businesses starting to plan for it (RT)

• BOJ Governor Ueda reiterates rate hikes will continue if underlying inflation tracks towards 2% target (RT)

• PBOC Governor Pan reiterates intent to conduct moderately loose monetary policy (BBG)

• Fed's Hammack notes high bar for market intervention and supports ongoing balance sheet reductions (RT)

TARIFFS

• China weighs exempting some US goods from 125% tariffs, including chip-related equipment, medical products and aviation parts (BBG)

• China denies talks with US are ongoing, says Washington misleading public (RT)

• US plans to use framework for tariff talks to establishes broad categories for negotiation, including tariffs and quotas, non-tariff barriers, digital trade, rules of origin and economic security (WSJ)

• US looking to negotiate within new framework with ~18 major trading partners on a rolling basis over next two months (WSJ)

• Trump miscalculated on China trade as hardball tactics did not bring Xi to the negotiating table (PO)

• Cargo shipments from China to US plunging and expected to hit a standstill (WSJ)

• Shein hiked US product prices by as much as 337% after Trump decision to end the 'de minimis' exemption for small packages from China (BBG)

• US-South Korea to reach "trade agreement of understanding" as soon as next week(BBG)

• US farmers flag significant drop in soybean and pork purchases from China, with pork imports down 72% this week (WSJ)

• US-India trade agreement under discussion covering 19 categories, including e-commerce, crops and data storage (BBG)

• EU on a mission to do trade deals with the rest of the world (PO)

ECONOMY

• US March durable goods orders surge 9.2% month-on-month vs. consensus for a 1.5% increase as businesses front-load ahead of tariffs (RT)

• Tokyo core inflation accelerates to two-year high, supporting BOJ rate hike stance (BBG)

• UK retail sales beats expectations due to warm weather boost (FT )

• South Korean economy contracts as consumers pullback on spending amid political turmoil (BBG)

ASX TODAY

• Ainsworth Gaming Technology enters into scheme with Novomatic for $1.00 per share or a 35% premium to last close (AGI)

• Alkane Resources to acquire Mandalay Resources at 7.875 ALK for each MND share, former Mandalay shareholders will own ~55% of the the company, with an implied market cap of ~$1.01bn and projected gold production of 160koz in FY25 (ALK)

• ALS guides to FY underlying NPAT of $310-313m (vs. $305m consensus), notes recent market volatility and uncertainty (ALQ)

• Brambles provides 9-month trading update, expects full-year revenue growth of 4-5% (vs. previous 4-6%) but free cash flow before dividends of $900-1,000m (vs. previous $850-950m) (BXB)

• Flight Centre says unlikely to deliver 14-26.5% YoY growth to achieve its initial FY25 target of $365-405m underlying profit before tax, now expecting $300-335m or broadly in-line with last year, launches on-market share buyback of up to $200m, to run from 12-May-25 to 28-Apr-26 (FLT)

WHAT TO WATCH TODAY

• Muted gains for resources and financials, tech to rise: Despite strong two-day gains in US markets, with the S&P 500 rising 2.78% over April 24–25, sectors such as resources and financials saw limited upside. The rally was primarily driven by growth-oriented segments like technology and discretionary. This divergence likely contributed to the subdued performance of S&P/ASX 200 futures this morning.

• Flight Centre: The trading update highlighted volatile market conditions, resulting in lower-than-expected transaction volumes for core brands. The revised UPBT figure indicates flat growth at the midpoint, falling approximately 13% below Macquarie's forecasts. Despite this disappointing outcome, FLT shares have already declined 30% since the half-year FY25 results on February 25, with weak updates also reported by peers, particularly US airlines. It remains to be seen whether these new figures will further depress the share price or if the market has already accounted for the downturn.

BROKER MOVES

• AMP upgraded to Outperform from Neutral but target cut to $1.34 from $1.64 (MQG)

• ANZ upgraded to Neutral from Sell; target up to $27.50 from $25.25 (CITI)

Stocks trading ex-dividend: 

• Mon 28 Apr: None

• Tue 29 Apr: Acrow (ACF) – $0.029, Red Hill Minerals (RHI) – $0.03, Tasmea (TEA) – $0.05

• Wed 30 Apr: Bank of Queensland (BOQ) – $0.18

• Thu 1 May: Om Holdings (OMH) – $0.004, Pengana Global Private Credit Trust (PCX) – $0.012, Wam Strategic Value (WAR) – $0.03

• Fri 2 May: None

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None 

• Earnings: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.