Morning Wrap: ASX 200 to fall, S&P 500 dips on Trump tariff jitters + JB Hi-Fi, Ansell results

ASX 200 futures are down 64pts (-0.76%) as of 8:30 am AEDT.

In a nutshell:

• US stocks struggled amid Trump tariff concerns and a spike in bond yields, with all major benchmarks and sectors lower

• Trump said he plans reciprocal tariffs on other countries next week, warns duties on US-made goods will be met with the exact same tariff

• Ansell tops 1H25 earnings expectations and upgrades full-year guidance, JB Hi-Fi numbers appear relatively in-line or slight beat (but the stock has rallied 69% in the past twelve months)

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks tumbled and finished near worst levels

• Today’s big story – Big reversal in risk appetite after yield spike on hot average US hourly earnings (up 4.1% in Jan vs. 3.8% consensus) and spike in inflation expectations in US consumer sentiment survey (up 4.3% from prior 3.3%) as well as Trump tariffs back in the headlines 

• US weekly recap – Dow (-0.54%), Nasdaq (-0.53%), Russell 2000 (-0.35%), S&P 500 (-0.24%)

• US M&A deals down almost 30% year-on-year in January to lowest since 2015 amid Trump tariff fallout (FT)

• US dollar up almost 7% since September, a growing headwind to Big Tech, threatening valuations and profit growth (BBG)

• Global equities faced outflows after Trump's tariff salvo (RT)

• US equity funds witness 4th weekly outflow in five weeks (RT)

• Yen on track for its fourth straight weekly gain against US dollar, underscoring growing case for another BOJ rate hike (BBG)

• Japan borrowing costs hit rise to highest since 2011 (FT)

• China tech stocks on cusp of bull market amid DeepSeek hype (BBG)

STOCKS

• Affirm (+21.8%) shares topped Q2 earnings expectations (EPS of 23 cents vs. estimates for a loss of 15 cents) amid broad gains across key metrics such as transaction volumes and margins (CNBC)

• Expedia (+17.2%) shares surged on Q4 earnings beat (EPS $2.39 vs. $2.04 estimates), boosted by robust travel demand in Asia Pacific and the lifting of some visa restrictions in the region (RT)

• Amazon (-4.0%) Q4 income 11% ahead of consensus and AWS grew ~19% for a third straight quarter but guidance missed, with operating income nearly 13% below at midpoint and >US$100bn capex for 2025, largely focused on AWS infrastructure (BBG)

• Meta, Amazon, Alphabet, Microsoft set to invest as much as US$320bn in AI technology this year (CNBC)

• Apple plans to unveil a long-anticipated overhaul of the iPhone SE in the coming days (BBG)

• Tesla raises prices of Model X cars in US by $5,000, sales of China-made EVs fall in January (RT)

• Shein set to cut its valuation in a potential London listing to ~$50bn (RT)

CENTRAL BANKS

• Dallas Fed President Logan says rates may already be near neutral, negating need for further easing in near-term (BBG)

• India cuts interest rates by 25 bp as focus shifts more to growth, policy stance kept at neutral (FT)

TRUMP

• Trump says he plans reciprocal tariffs on other countries next week, did not offer any details, but warns duties on US-made goods will be met with the exact same tariff (BBG)

ECONOMY

• China January CPI accelerates to fastest in five months, up 0.5% year-on-year but PPI deflation persists amid weak factory demand (Reuters)

• US January nonfarm payrolls grew by 143k vs. 170k consensus, partly restrained by LA wildfires and cold weather (Reuters)

• Japan household spending rises for first time in five months, recording quickest pace growth since Aug-2022 (RT)

ASX TODAY

• Ansell reports double-digit top-and-bottom line growth, upgrades full-year outlook (ANN)

• Car Group reports 5% NPAT growth to $123m, guides to "good" growth for FY25 (CAR)

• Generation Development Group to launch capital raising today, seeking to raise $287.9 million at $4.15 per share or a 10.7% discount (AFR)

• JB Hi-Fi reports 1H25 net profit growth of 8.0% to $285m, interim dividend up 7.6% to 170 cents per share (JBH)

• Wisetech board examining fresh claims of inappropriate behaviour from former employees and contractors regarding former CEO Richard White (AFR)

WHAT TO WATCH TODAY

• Sector moves: ASX 200 set for a relatively heavy session after a weak lead from Wall Street amid tariff concerns and higher yields. Copper prices surged 3.0% last Friday to a fresh five-month high but the Copper Miners ETF (COPX) struggled to hold on to gains, up just 1.7% from session highs of 3.7%. Uranium also showed some strength but faded early gains, up 2.6% from highs of 4.7%. BNPL could be another sub-sector to look out for after US-listed rival Affirm soared 21% after smashing quarterly earnings expectations.

• Ansell: Strong result with revenue up 29.9% to $1.01bn or 13% ahead of Morgans estimates, adjusted NPAT up 57.3% (7.3% beat) and interim dividend up 34.5% (1.4% beat). Upgraded full-year guidance to 118-128 US cents from prior 110-127 US cents, representing a 3.8% upgrade at the midpoint and 1.9% ahead of Morgans estimates of 116.3 cents. Kimberly-Clark performance also "ahead of expectations" and productivity program on-track to deliver $45m of savings in FY25.

BROKER MOVES

Plenty of brokers are downgrading ratings while raising target prices today. This suggests the company is performing well fundamentally and the share price is trending higher, above what their models can justify.

• Aristocrat Leisure initiated Buy with $83 target (BP)

• Brambles downgraded to Neutral from Overweight but target up to $19.45 from $17.90 (JARD)

• Cleanaway upgraded to Overweight from Neutral; target up to $3.10 from $3.05 (JARD)

• Domino's Pizza upgraded to Neutral from Underperform; target up to $35.10 from $28.20 (MQG)

• Evolution initiated Buy with $6.65 target (BP)

• Ingenia Communities downgraded to Neutral from Buy but target up to $6.15 from $5.79 (UBS)

• Liontown upgraded to Neutral from Sell; target up to $0.75 from $0.50 (UBS)

• Nick Scali downgraded to Hold but target up to $16.50 from $15.50 (CLSA)

• Nick Scali downgraded to Overweight from Buy but target up to $18.50 from $15.88 (JARD)

• Scentre Group upgraded to Neutral from Sell; target up to $3.74 from $3.53 (UBS)

• Select Harvests downgraded to market-weight from Overweight but target up to $4.70 from $4.46 (WAM)

Stocks trading ex-dividend: 

• Mon 10 Feb: Euroz Hartleys Group (EZL) – $0.02

• Tue 11 Feb: None

• Wed 12 Feb: ResMed (RMD) – $0.06

• Thu 13 Feb: Korvest (KOV) – $0.25, Plato Income Maximiser (PL8) – $0.006

• Fri 14 Feb: None

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None

• Earnings: Ansell (ANN), Car Group (CAR), Centuria Industrial REIT (CIP), JB Hi-Fi (JBH)

• AGMs: None

Economic calendar (AEDT):

No major economic announcements.