Morning Wrap: ASX 200 to fall, S&P 500 flat as tech strength cushions broader weakness

ASX 200 futures are down 36pts (-0.43%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks finished mixed, as tech and discretionary strength offset broader market weakness

• Gold prices continued to tumble, now down 7.5% in the last six sessions

• Watch out for Xero and Graincorp earnings

Let's dive in.

S&P 500 SESSION CHART

S&P 500 slightly higher (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mixed, trading within a narrow range

• S&P 500 still slightly positive year-to-date, while the Nasdaq logged its sixth straight gain

• Breadth was negative, with the Equal-weight S&P 500 underperforming the official benchmark by ~70 bps and only three sectors finished higher

• Relatively uneventful session with no major directional drivers, White House hinted another deal could be announced when Trump returns from overseas trip – likely Japan or South Korea

• Gold extended selloff, now down 7.5% since 6-May and trading below US$3,200 for the first time since 11-Apr

• US equity ETFs see big inflows in recent days (BBG)

• Traders cut back Fed rate easing bets as US-China trade tensions cool (BBG)

• Citi, JPMorgan are bullish on small caps, technology hardware, and homebuilders for quick, short-term profits (BBG)

STOCKS

• Boeing and GE Aerospace secure $96 billion agreement to sell Qatar Airways up to 210 aircraft (CNBC)

• Roche says Trump's drug price order threatens its $50 billion US investment plans (RT)

• Saudi Aramco signs deals worth up to $90 billion with US companies (USN)

• HSBC to cut 10% of its workforce in France (RT)

• Tesla plans to begin shipping components from China to the US for Cybercab and Semi truck production by end of month (RT)

• eToro makes Nasdaq debut, shares up 28% from IPO price (CNBC) 

CENTRAL BANKS

• Markets revive BOJ rate hike expectations after US-China tariff truce (NK)

• ECB's Villeroy says another rate cut is likely by summer (BBG)

TARIFFS & TRADE

• Canada suspended almost all retaliatory tariffs on US products (BBG)

• China suspends retaliatory US export controls and sanctions on more than a dozen US companies, including rare earths (BBG)

• South Korea and Japan reportedly close to a trade deal with US (WSJ)

• EU officials willing to take slow path to US trade deal over quick "unfair" win (RT)

• US-China deal pressures Mexico, Vietnam to secure deals with the US (RT)

• China criticises US-UK trade agreement for targeting Chinese products (FT)

• US cuts de minimis tariffs on China parcels to 30% (RT)

ECONOMY

• China growth forecasts revised higher but stimulus expectations ease, following US tariff cut (BBG)

• Australian wage growth reaccelerates to 3.4% in the first quarter, above analyst expectations, driven by a wave of public-sector hiring (BBG)

ASX TODAY

• Coronado Global could be under the eyes of Sev.en Global Investments (The Aus)

• Lendlease confirms negotiations are in late stages to release capital from its UK portfolio (LLC)

• Northern Star lifts Group Mineral Resource by 9.4Moz to 70.7Moz after mining depletion (NST)

• Xero reports FY25 NPAT of $227.8m and 4.41m subscribers, total operating expenses as a percentage of revenue to be around 71.5% in FY26 (XRO)

WHAT TO WATCH TODAY

• Pullback dynamics: ASX 200 set to snap a six-day win streak after a weak lead from Wall Street. The mostly red ETF watchlist highlights the session's poor breadth. One of the market's biggest concerns right now are yields, where the US 10-year is back above 4.5%. The trade deals are calming economic concerns and pricing rate cut outs, which may pressure risk assets.

• Gold weakness: Gold continues to get pummeled, down 7.5% over the last six sessions. Prices are now sitting just above the key 50-day moving average. The Gold Miners ETF (GDX) slumped another 2.1% overnight to a one-month low. Will be interesting to see where the dust settles.

• Aristocrat Leisure: Shares tumbled 8.8% yesterday (up from session lows of -15.2%) after 1H25 revenue and NPATA missed consensus by 5% and 8.9% respectively. You'd expect the stock to be hit by a fair few earnings downgrades today. However, most analysts will likely remain buy-rated for its defensive earnings and attractive growth outlook. The sharp intraday reversal does suggest some buying appetite despite the sizeable earnings miss.

• Xero: FY25 results are due today, here are some of the key numbers to look out for (from Citi) – 6% subs growth to 4.4m, ARPU growth 9% year-on-year, NPAT of $253m (pre-sig items) and core EPS of 164 cents.

BROKER MOVES

• Catapult Group downgraded to Hold from Buy; target up to $4.40 from $4.00 (BP)

Stocks trading ex-dividend: 

• Thu 15 May: Autosports Group Ltd (ASG) – $0.035, Plato Income Maximiser (PL8) – $0.006, United Overseas Australia Ltd (UOS) – $0.02, Tamawood Ltd (TWD) – $0.11, WAM Alternative Assets (WMA) – $0.027, Whitefield Income (WHI) – $0.006

• Fri 16 May: Clime Investment Management Ltd (CIW) – $0.003, Dicker Data (DDR) – $0.11, EZZ Life Science Holdings Ltd (EZZ) – $0.02

Other ASX corporate actions today: 

• Dividends paid: Charter Hall Long WALE REIT (CLW), Dexus Convenience Retail REIT (DXC), Dexus Industria REIT (DXI), Tasmea Ltd (TEA)

• Earnings: Graincorp (GNC), Xero (XRO)

• IPOs: None

• AGMs: Ampol (ALD), Atlas Arteria (ALX), Resolute Mining (RSG)

Economic calendar (AEST):

• 11:30 am: Australia Unemployment Rate (Apr)

• 4:00 pm: UK GDP Growth (Q1)

• 10:30 pm: US PPI (Apr)

• 10:30 pm: US Retail Sales (Apr)