Morning Wrap: ASX 200 to fall, Nasdaq re-enters bear market territory, Gold surges past US$3,400

In a nutshell:

• A heavy day on Wall Street, with heavy selling across the board and the Nasdaq re-entering bear market territory

• Broad range of downward drivers, including concerns about the Fed's independence (vs. Trump's pressures to cut rates), unraveling of US safe-haven status, negative earnings guidance and analyst revisions, escalation in US-China trade tensions and VIX spike

• Gold was pretty much the only sub-sector to show strength, with spot prices up 2.9% overnight to a record US$3,430 an ounce

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks finished sharply lower but off worst levels

• S&P 500 marked its third decline in the last four sessions, Nasdaq down for a fourth-straight day and re-entered bear-market territory 

• Every sector finished lower, and breadth was heavily negative – even Staples couldn’t buck the trend 

• Gold spot surged another 2.9% to another all-time high of US$3,430

• Overnight weakness driven by concerns about Fed’s independence vs. Trump pressures to cut rates, scrutiny around US exceptionalism and safe-haven status, negative Q1 earnings season outlook and analyst revisions, escalation in US-China trade tensions and VIX resurgence 

• 'Sell America' trade initially driven by Trump's tariffs, exacerbated by his attacks on Fed Chair Powell (BBG)

• US Dollar falls to three-year low, down 10% from Jan-25 high  (FT)

US EARNINGS

• 24% of S&P 500 companies have reported first quarter earnings, with blended EPS growth of 7.2% (in-line with market expectations), according to FactSet

• Only eight of the S&P 500 companies that have reported offered earnings guidance and none were above consensus, according to BofA

• Earnings and revenue beats have led to just 0.5 percentage points in share price outperformance vs. 1.5 pp averages

STOCKS

• Nike's struggles with large-scale automated production (WSJ)

• Huawei readies new AI chip for mass shipments as China seeks Nvidia alternatives, driving Nvidia shares sharply lower (RT)

• Netflix shares edged higher after reporting 13% revenue growth in the first quarter of 2025, slightly ahead of market expectations (CNBC)

CENTRAL BANKS

• Trump administration continues to push against Fed Chair Powell, considering the possibility of firing him (BBG)

TARIFFS

• China sharply reduced imports of many US commodities last month, in some cases to zero (BBG)

• China warned other countries against making trade deals with the US, says it may respond with reciprocal countermeasures (AP)

• South Korea's top trade official to visit Washington this week to to start trade negotiations (BBG)

• Mexico's President Sheinbaum said there's no agreement yet with President Trump (BBG)

• Trade war with China putting pending M&A transactions at risk and used as bargaining chips, notably TikTok, Shein and US Steel (AX)

• Brazil and Argentina emerge as trade war winners, increasing their agricultural exports, particularly meat and grains (BBG)

ECONOMY

No major economic announcements

ASX TODAY

• Long list of quarterly updates from names including DRO, DYL,

• Macquarie to sell three North American and European public investments business to Nomura for A$2.8bn in all-cash transaction (MQG)

• Tower upgrades FY25 guidance, NPAT expected to be $70-80m vs. prior range of $60-70m (TWR)

• US Federal Permitting Improvement Steering Council grants fast-track status to ten mineral production projects including Resolution Copper Project owned by Rio Tinto and BHP, and Jindalee Lithium's McDermitt Project (JLL)

WHAT TO WATCH TODAY

• Here comes more weakness: The ASX should fair much better than Wall Street but still not a whole lot to be positive about. Expect sectors like Tech, Discretionary and Energy to lead to the downside, while defensive sectors such as Consumer Staples and Real Estate should hold up better on a relative basis.

• Gold: This was arguably the only bright spot overnight, with prices cruising past US$3,400 an ounce. However, market jitters were evident, with the Gold Miners ETF (GDX) managing only a modest 1.45% gain, underperforming the broader gold rally.

BROKER MOVES

• AMP upgraded to Buy from Neutral but target cut to $1.40 from $1.54 (GS)

• AMP upgraded to Overweight from Neutral but target cut to $1.35 from $1.50 (JPM)

• Transurban downgraded to Neutral from Buy; target cut to $14.60 from $14.80 (UBS)

Stocks trading ex-dividend: 

• Tue 22 Apr: Gullewa (GUL) – $0.007, MFF Capital Investments (MFF) – $0.08

• Wed 23 Apr: Steamships Trading Company (SST) – $0.104

• Thu 24 Apr: Spheria Emerging Companies (SEC) – $0.035

• Fri 25 Apr: None

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None 

• Earnings: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements