Morning Wrap: ASX 200 to fall, S&P 500 books seventh straight gain, US GDP dips on import surge

ASX 200 futures are down 28pts (-0.34%) as of 8:30 am AEST.

In a nutshell:

• S&P 500 experienced a last minute rally to mark its seventh straight gain, marking one of the largest streaks on record

• US GDP unexpectedly declined 0.3%, but this was largely due to surging imports (which is a headwind)

• Oil prices dip back below US$60 a barrel as Saudis signal willingness to live with lower prices

Let's dive in.

S&P 500 SESSION CHART

S&P 500 slightly higher after a last minute rally (Source: TradingView)

OVERNIGHT MARKETS

• US stocks finished mixed but well above session lows after experiencing a sharp rally in the last minute of trade

• S&P 500 logged its seventh straight gain, tying with the record seven streaks in 1969 and 1980

• US monthly recap – Nasdaq (+0.85%), S&P 500 (-0.76%), Russell 2000 (-2.38%), Dow (-3.17%)

• Today’s big story – US Q1 GDP was unexpectedly negative due to outsized headwind from importers front-running Trump tariffs, strong earnings from Meta and Microsoft after market close pushed Nasdaq futures sharply higher

• While the GDP figures were volatile, it still reiterates ongoing growth and stagflation concerns, with the market now pricing for almost ~100 bps of rate cuts by year-end

• Hedge funds continue to favor shorting US equities, raising bets to Japan and Europe (BBG)

• Capital flight from Wall Street hits Europe via surging Euro as investors seek new tariff proof pockets (RT)

• US dealmaking down under Trump 2.0 so far but accelerating in other parts of the world (YF)

• Saudi Arabia signals it is unwilling to prop up the oil market with more cuts, can withstand a prolonged period of low prices (RT)

STOCKS

• Meta Q1 revenue up 16% to $42.3bn (2.2% beat vs. $41.4bn ests), AI supporting ad targeting and personalisation, Meta AI chatbot surpassed 700 million monthly active users (BBG)

• Microsoft Q1 revenue up 13% to $70.0bn (2.4% beat vs. $68.4bn ests), EPS of $3.46 (7.4% beat vs. $3.22 ests) on strong Azure growth, significant AI contributions (BBG)

• Starbucks same-store sales down 1% in Q1, with revenue and earnings below market expectations (BBG)

• Visa Q1 EPS of $2.76 beat estimates by 3% on strong consumer spending resilience (payments volume up 8%), management reiterate resilient business model in current environment (BBG)

• Rivian built a stockpile of lithium-ion batteries from China ahead of Trump's tariffs (BBG)

• Huawei has begun delivering its AI chip to Chinese clients cut off from Nvidia (FT)

• Volkswagen reports 37% drop in first quarter profit, says Trump tariff could further weigh on outlook (CNBC)

• Mercedes-Benz and Stellantis scrap guidance as tariff chaos spreads (BBG)

CENTRAL BANKS

• Trump resumes criticisms of Fed Chair Powell's performance at Michigan rally (BBG)

TARIFFS

• Trump says Canada's Carney plans to visit next week and called him up to say "let's make a deal" (BBG)

• Trump signs orders to ease impact of auto tariffs through credits and relief on material levies (AX)

• China creates list of US products exempt from its 125% tariffs (RT)

• Trump says China will absorb tariffs, lessening US impact (BBG)

• Lutnick says trade deal agreed to with unnamed county, announcement to follow parliamentary approval (CNBC)

• US toy retailers warn of Christmas shortages with orders on pause as tariffs work through supply chains (NYT)

• Bessent talks up prospects of agreements with India and South Korea, notes substantial talks held with Japan (CNBC)

• Trump plans to hold call with Australia after Canberra raised objections to tariffs (BBG)

ECONOMY

• US Q1 GDP contracted at a 0.3% annualised pace in the first quarter vs. consensus for a 0.3% increase and the lowest since 1Q22 (BBG)

  • GDP is calculated by adding exports and subtracting imports, therefore the surge in post-Liberation day stockpiling from importers resulted in a volatile quarterly figure

• US March core PCE was unchanged month-on-month vs. consensus for a 0.1% increase, up 2.6% on an annualised basis (BBG)

• China manufacturing PMI slipped to 49 in March from 50.5 in the previous month, new export orders fell to the lowest since December 2022 (BBG)

• Eurozone Q1 GDP unexpectedly up 0.4% on the upside due to stockpiling of goods (BBG)

• Australia Q1 core inflation up 0.7% from 0.5% in the previous quarter, but May rate cut expectations intact (BBG)

ASX TODAY

• Aeris Resources seeking support for ~$70m equity raise, to launch as early as this week to support working capital and replace ~$40m debt (AFR)

• AMA Group reports Q3 normalised EBITDA of $21.2m, up 97% year-on-year, full-year normalised EBITDA guidance of $58-62m (unclear if comparable to $99.3m consensus) (AMA)

• Amcor reports Q3 EPS $0.18 (in-line with consensus), downgrades full-year EPS guidance to $0.72-0.74 vs. prior guidance of $0.72–0.76 (AMC)

• SiteMinder reports 5.01% interest from KKR entities (SDR)

• Woolworths reports Q3 sales of $17.31bn vs. $17.33bn consensus (WOW)

WHAT TO WATCH TODAY

• Last minute quarterlies – Yesterday was the last day of quarterly reporting season. Lots of companies report these after market close – many of which will flag <1 quarter of funding available.

• Tech tailwinds: Lots of strong read throughs from Meta and Microsoft earnings. Both stocks are up 4-7% in after hours. This should see some positive flow for the local tech sector, notably names related to AI and cloud.

• Commodity weakness: A relatively weak overnight session for resource sectors. Oil prices tumbled back below US$60 a barrel after a Reuters reported said Saudi was willing to live with lower prices. US GDP also had some shock value, placing downward pressure on prices. NYSE-listed BHP shares finished 2.1% lower (but off worst levels).

BROKER MOVES

• Coronado Global downgraded to Hold from Buy; target cut to $0.23 from $0.50 (BP)

• Regis Resources downgraded to Neutral from Outperform; target remains $4.30 (MQG)

 Stocks trading ex-dividend: 

• 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: Brickworks (BKW), Harvey Norman (HVN), The Reject Shop (TRS), US Masters Residential Property Fund (URF)

• Earnings: None

• Listings: None

• AGMs: GPT Group (GPT), Rio Tinto (RIO)

Economic calendar (AEST):

• 11:30 am: Australia Balance of Trade (MAR)

• 1:00 pm: Japan Interest Rate Decision (Ests: Hold at 0.50%)

• 12:00 am: US ISM Manufacturing PMI (APR)