Morning Wrap: ASX 200 to bounce, S&P 500 rallies after three-day selloff

ASX 200 futures are up 102pts (+1.18%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks sharply higher, with the S&P 500 reversing declines from the last two sessions and the Dow rallying to fresh all-time highs

• Sharp bounce in software stocks, a move largely tabbed to extreme oversold conditions

• Broad-bounce for commodities, with gold up ~4% and just shy of US$5,000, silver up 9.8% to US$77.9 and copper up 2.9% to US$5.93/lb

• A quite day for 1H26 results, with CAR reporting relatively in-line numbers and reaffirming its full-year guidance

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, closed slightly off best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks sharply higher and closed near best levels

• S&P 500 recouped losses from the last two sessions as Tech stocks bounced, with notable gains from Broadcom (+7.2%) and Nvidia (+7.9%)

• Dow and Equal-weight S&P 500 both logged fresh all-time highs

• US weekly recap: Dow (+2.50%), Russell 2000 (+2.17%), S&P 500 (-0.10%), Nasdaq (-1.84%)

• Software sentiment appears to have bottomed after seven-straight weeks of declines, a move largely driven by extreme oversold conditions and pushback against AI competition concerns

• AI driving investor anxiety, but analysts note little fundamental evidence of earnings deterioration (BBG)

• Investors hit with over $400bn of losses last week over fears of AI replacing entire businesses (AX)

• Investors turning to smaller companies, dividend payers, equal-weight indexes as AI caution grows (RT)

• Japanese stocks set to extend rally, yen and bonds see further declines after strong LDP performance (BBG)

• BofA's Hartnett says Trump approval rebound is crucial for reversing pressure in US markets (INVST)

• Investors purchased $5.58bn in US equity funds, down 48% week-on-week amid tech selloff (RT)

• CME hikes gold and silver margins again to curb risks from extreme volatility (BBG)

• Chinese speculators drive global metals prices up amid ample cash and limited investment options (BBG)

• Bitcoin rebounds from 16-month low to US$70,900 as tech selloff eases, risk sentiment stabilises (RT)

STOCKS

• Amazon slumps on massive $200bn AI capex spending plans and slower AWS growth (BBG)

• Big Tech's combined ~$650bn AI spending plan for 2026 raises execution and financing concerns, reignites bubble fears (BBG)

• Anthropic touts latest Claude model that can tackle complex financial research (BBG)

• Intel and AMD flag CPU supply shortages to Chinese customers, Intel warns six-month delivery delays (RT)

• SpaceX delays planned 2026 Mars mission, prioritises 2027 moon landing (RT)

• Prediction markets expected to take significant share of Super Bowl bets, adding further pressure to gambling stocks like Flutter and DraftKings (BBG)

• Stellantis books €22bn charges, resets EV strategy and cancels dividend (BBG)

• Reddit guidance tops expectations as ads drive surge in revenue, announces $1bn buyback, shares still tumble 7% to 9-month low (BBG)

• ConocoPhillips aims to cut costs by $1bn in 2026 after missing Q4 profit estimates (RT)

• Toyota raises profit forecast due to weak yen and cost cuts, CEO to resign after tariff pressures (RT)

TARIFFS & TRADE

• Trump signs executive order to cut tariffs on India over Russian oil purchases (POL)

• Argentina says it has signed trade and investment agreement with US (BBG)

CENTRAL BANKS

• Bessent does not expect Fed to move quickly to shrink balance sheet, even under Warsh (RT)

• China's PBoC extends gold purchases streak to 15 months despite recent selloff (BBG)

GEOPOLITICS

• Trump touts positive Iran talks, to continue next week, but cautions steep repercussions if no deal (FT)

• Iran sticks with refusal to end enrichment of nuclear fuel, rejecting core US demands (WSJ)

• Beijing warns US arms sale to Taiwan could jeopardise Trump's state visit to China in April (FT)

• EU considering fresh defense funding after initial €150bn loan program oversubscribed (BBG)

ECONOMY

• German industrial output drops sharply, marks first decline since August, with output falling 1.9% month-on-month in December (BBG)

ASX TODAY

• Block may cut 10% of its workforce (BBG)

• Bravura Solutions upgrades FY revenue guidance to $280-285m vs. prior $265-275m, adjusted EBITDA upgraded to $69-73m vs. prior $55-65m guidance (BVS)

• Car Group reports 1H26 revenue growth of 8% to $625m, NPAT up 16.1% to $143.3m, reaffirms FY guidance (CAR)

• Pepper Money in advanced talks to go private, deal between KKR-owned Global Atlantic Financial will still take weeks for finalise (AFR)

WHAT TO WATCH TODAY

• Resources bounce: XMJ down 2.6% on Friday, amid a relatively broad-based selloff that drove coal, copper, gold, lithium and uranium stocks sharply lower. Big overnight bounce with several resource-related ETFs up 4-6%, though some commodity prices still trading below last Thursday's levels. Volatility is still the name of the game here amid CME margin changes and how prices are still extended from 50-and-200 day moving averages. Nevertheless, this should see a solid bounce for the local resource sector on Monday.

• Tech bounce: US tech stocks finally bounce after falling in a rather vertical fashion. Overnight FinTech and Cloud ETFs up 4.3% and 2.0% respectively. This should offer a positive lead in for local names, most of which have suffered a similar fate.

BROKER MOVES

• Charter Hall Retail REIT upgraded to Outperform from Neutral; target up to $4.15 from $4.01 (MQG)

• GQG Partners downgraded to Equal-weight from Overweight; target cut to $1.75 from $2.65 (MS)

• Lotus Resources upgraded to Neutral from Underweight; target up to $2.10 from $2.06 (JPM)

• Paladin Energy downgraded to Neutral from Buy; target remains $12.25 (UBS)

Stocks trading ex-dividend: 

• Mon 9 Feb: BKI Investment Company (BKI) – $0.04

• Tue 10 Feb: Sandon Capital Investments (SNC) – $0.005

• Wed 11 Feb: ResMed (RMD) – $0.059

• Thu 12 Feb: Apiam Animal Health (AHX) – $0.10, Korvest (KOV) – $0.25

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: CAR Group (CAR)

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

No major economic announcements.