Morning Wrap: ASX 200 futures slip, Swiss central bank cuts rates + S&P 500, Dow post record highs

The S&P 500, Dow and Nasdaq all hit fresh all-time highs overnight, gold briefly surges to a record US$2,222 an once but gives back all of those gains by session close, the Swiss Central Bank unexpectedly cuts interest rates by 25 bps, Reddit debuts and soars almost 70% and two charts that explain why the current run has more legs.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gaps up but finishes at worst levels (Source: TradingView)

ASX TODAY

• ASX 200 futures pointing to a relatively weak open despite all three major US benchmarks scoring fresh all-time highs

• US Dollar Index rallied overnight which may pressure commodity stocks (e.g. BHP ADRs finished 0.19% higher from session highs of 1.23% overnight)

• Peter Warren Automotive CEO Mark Weaver intends to step down by year end

• Activist Nick Bolton targeting Australian Unity Office Fund (AFR)

• Predictive Discovery could be a takeover target for Perseus Mining (The Australian)

MARKETS

• S&P 500, Dow and Nasdaq all hit fresh record closes but finished well off best levels

• Russell 2000 closed near its highest level since early 2022

• S&P 500 on track for its best weekly performance since December 2023

• Defensive sectors including Utilities, Staples and Healthcare underperformed and Apple (-4.1%) was a major drag on tech performance

• US dollar index up 0.6%, best session since mid-Feb and nears 1-month high

• Gold briefly surges 1.7% to US$2,222 before finishing the session lower at US$2,180 

• BofA latest Global Fund Manager Survey showed most optimistic outlook on global growth in over two years

• Short-sellers ramping bets against commercial real estate (Bloomberg)

INTERNATIONAL STOCKS

• Micron revenue guidance tops forecasts, underpinned by booming demand for AI hardware (Bloomberg)

• Reddit share price jumped nearly 70% in trading debut (CNBC)

• Target doubling bonuses for salaried employees on strong profits (Bloomberg)

• Hyundai and Kia to recall 147,000 US EVs for faulty charging units (Reuters)

• Citi cuts London investment banking jobs amid deal slump (Bloomberg)

CENTRAL BANKS

• Bank of England holds rates steady, lays groundwork for June cut (Bloomberg)

• Two more Bank of England hawks drop calls for more rate hikes (Bloomberg)

• Bank of Canada officials says QT will likely end in 2025 (Bloomberg)

• Powell says Fed looking at slowing pace of balance sheet runoff (Bloomberg)

• Inflation acceleration, yen weakness may prompt follow-up BOJ rate hike (Nikkei)

• Switzerland surprises with first rate cut in nine years (Bloomberg)

• Norway keeps rate unchanged, signalled plans a single rate cut this year (Reuters)

• ECB attempts to stifle bets on multiple rate cut scenario (Reuters)

• PBoC's deputy governor says China has ample policy room (Bloomberg)

ECONOMY

• Eurozone business activity close to stabilizing on services sector expansion and cooling inflation (Bloomberg)

• Japan manufacturer sentiment rebounds to three-month high (Reuters)

• Japan flash PMI improves on narrower declines in output and new orders (Reuters)

• Australian unemployment unexpectedly falls to 3.7% in February from 4.1% in the previous month (Bloomberg)

• Surprise GDP contraction tips New Zealand economy into recession (Bloomberg)

• South Korean exports continue to expand in March amid surge in semiconductor shipments (Bloomberg)

• Taiwan exports come below expectations in February (Reuters)

The Swiss Rate Cut

The Swiss National Bank is the first major central bank in the developed world to cut rates in this cycle. It unexpectedly cut rates by 25 bps to 1.50%.

"The easing of monetary policy has been made possible because the fight against inflation over the past two and a half years has been effective ... For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability." the central bank said in a statement.

It also revised its inflation forecasts notably lower to average 1.4% in 2024 (from 1.9% at its last meeting in December), 1.2% in 2025 and 1.1% in 2026.

Cool Charts

Bank of America's Global Fund Manager Survey says that fund managers are the most bulled up in two-and-a-half years. While pullbacks are pretty normal at such extreme levels of fund manager sentiment – The market has a tendency to continue running hot over the short-to-medium term.

Source: BofA, Jason Goepfert

The Fed's dot plot reaffirmed three rate cuts this year. There have been 20 instances where the Fed cut rates when the S&P 500 was within 2% of all-time highs, according to Carson Investment Group. Stocks were on average 13.9% higher a year later and positive 100% of the time.

Source: Carson Investment Group

Companies trading ex-dividend: 

• Friday, 22 March: Vita Life Sciences (VLS) – $0.06 

• Monday, 25 March: Perenti (PRN) – $0.02, Cash Converters (CCV) – $0.001, Naos Emerging Opportunities (NCC) – $0.037, Lycopodium (LYL) – $0.37, NRW Holdings (NWH) – $0.06, Cedar Woods (CWP) – $0.08

• Tuesday, 26 March: Civmec (CVL) – $0.025, New Zealand Oil & Gas (NZO) – $0.025, Flight Centre (FLT) – $0.10, Southern Cross Electrical (SXE) – $0.01 

• Wednesday, 27 March: Myer (MYR) – $0.03, Waypoint REIT (WPR) – $0.04, IPD Group (IPG) – $0.04, Garda Property (GDF) – $0.016, Rural Funds (RFF) – $0.02, Dexus Convenience Retail REIT (DXC) – $0.05, Reece (REH) – $0.08, Wiseway Group (WWG) – $0.002, 360 Capital REIT (TOT) – $0.015, 360 Capital Mortgage REIT (TCF) – $0.035, Centuria Office REIT (COF) – $0.03, Centuria Retail REIT (CIP) – $0.04, Australian Unity Office Fund (ARF) – $0.015, Arena REIT (ARF) – $0.04 

Other ASX corporate actions today: 

• Dividends paid: ARN Media (ARN) – $0.036, Helloworld Travel (HLO) – $0.05, Global International (GLB) – $0.09, McPherson’s (MCP) – $0.02, Pro Medicus (PME) – $0.18, Atlas Pearls (ATP) – $0.015, Auswide Bank (ABA) – $0.11, McMillan Shakespeare (MMS) – $0.76, AGL Energy (AGL) – $0.26 

• Listing: None

Economic calendar (AEDT):

• 10:30 am: Japan Inflation Rate (Feb)

• 6:00 pm: UK Retail Sales (Feb)

• 8:00 pm: Germany IFO Business Climate (Mar)