Morning Wrap: ASX 200 to fall, S&P 500 gives back gains, Gold surges to all-time high

ASX 200 futures are down 116pts (-1.52%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks gave back a chuck of yesterday's gain, although the S&P 500 is still ~9.5% higher

• Gold prices are up almost 6.5% in the last two sessions, cracking a fresh all-time high overnight

• Markets are pulling back, with investors pivoting back to defensive sectors like Staples and Utilities, while Tech and Energy bore the brunt of the selling

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks lower but off worst levels, this follows yesterday’s mega-bounce which saw the S&P 500 and Nasdaq log the biggest one-day gain since October 2008 and the Dot-com bubble respectively

• S&P 500 still up 9.5% since the rally but trade policy volatility and US-China trade tensions remain an overhang

• Renewed selling driven by US dollar weakness and rising US 10-year yield. Both raise questions about the traditional safe-haven status to both assets

• China stocks rally on stimulus hopes, yuan falls to lowest level since 2007 (BBG) 

• Corporate credit under pressure with junk spreads widening by most since Mar-2023 regional banking crisis (RT)

• EIA cuts global oil demand forecast by 400,000 bpd a month due to tariffs (BBG)

STOCKS

• Prada strikes ~$1.4 billion deal to buy rival Versace (RT)

• Novartis plans to invest $23bn in US plants as Trump renews drug tariff threats (RT)

• Apple has airlifted 600 tons of iPhones from India to get ahead of Trump tariffs (RT)

• TSMC quarterly sales soared 42%, reflecting strengthening demand for AI serves and smartphones before US tariffs kicked in (BBG)

• Microsoft confirms it is slowing and/or pausing some AI data center projects (AP)

• Dell has reduced or eliminated US discounts on many of its computers, possibility due to tariff volatility (BBG)

• Constellation forecasts fiscal 2026 profit below analyst estimates, expecting steep levies imposed by Trump (RT)

• Volkswagen warns Q1 earnings fell short of expectations due to one-off items, including early impacts from US tariffs (WSJ)

CENTRAL BANKS

• Fed increasingly likely to slow further cuts amid tariff uncertainty, with focus on inflationary pressures rather than weakening labor market (BBG)

• Cleveland Fed's Hammack says US financial markets functioning well despite recent Tariff volatility (BBG)

• Traders now expecting fewer rate cuts by year-end after Trump pauses higher reciprocal tariffs (RT)

TARIFFS

• China's leaders will meet to discuss stimulus to counter US; potential stimulus will focus on housing, consumer spending, and innovation (BBG)

• White House clarifies China tariffs now 145%, Trump sees 'transition problems' but believes it will ultimately be 'a beautiful thing' (BBG)

• EU and China to set minimum prices on electric vehicles (RT)

• Chinese exporters have raised prices, canceled shipments, and rerouted goods in tariff response (FT)

• EU President welcomes Trump's pause on reciprocal tariffs, weighs buying up more US gas and advocates for a zero-for-zero tariff agreement (FT)

ECONOMY

• US March headline CPI down 0.1% MoM vs. consensus for a 0.1% increase, annualised headline at 2.4% vs. 2.6% consensus, core CPI up 0.1% MoM vs. 0.3% ests (BBG)

• US inflation drivers including deceleration in shelter index (+0.2% MoM vs. Feb’s 0.3% increase), air fares plummeted 5.3% MoM and energy index down 2.4%

ASX TODAY

• Endeavour Group recently subject to interest from private equity, however volatile market conditions may have put the deal on ice (The Aus)

• Santos looking at M&A targets in the LNG sector in the US, has yet to find an appealing target (The Aus)

WHAT TO WATCH TODAY

• Pullback dynamics: A sizeable pullback overnight, although most indices and ETFs are still up 2-9% since yesterday's rally. The broad overnight theme is a return to defensive sectors like Staples (the only sector to finish positive) and utilities. While Energy (Brent crude down 3.5% to US$63/lb) and Tech led to the downside. The market continues to remain in a volatile state as it awaits further tariff clarity. Some of the market's best and worst sessions occur during such downturns (and the best/worst days often occur right next to each other).

• Gold strength: Gold is unstoppable right now. Prices are up almost 6.5% in the last two sessions alone and closed at all-time highs overnight. The VanEck Gold Miners ETF (GDX) rallied 4.85% overnight to close at the highest level since 2012.

BROKER MOVES

• Lynas Rare Earths downgraded to Sell from Hold; target cut to $6.50 from $7.30 (BP)

• Pantoro upgraded to Hold from Sell; target up to $2.40 (BP)

Stocks trading ex-dividend: 

• Fri 11 Apr: WAM Leaders (WLE) – $0.047

• Mon 14 April: WAM Active (WAA) – $0.03, WAM Microcap (WMI) – $0.053

• Tue 15 Apr: SDI (SDI) – $0.015, WAM Research (WAX) – $0.05, Washington H Soul Pattinson & Company (SOL) – $0.44, Waterco (WAT) – $0.07

• Wed 16 Apr: Horizon Oil (HZN) – $0.015, The Reject Shop (TRS) – $0.12, WAM Capital (WAM) – $0.077

• Thu 17 Apr: None

• Fri 18 Apr: None

Other ASX corporate actions today: 

• Dividends paid: APE Eagers Automotive (APE), CCV Cash Converters International (CCV), COG Financial Services (COG), CVL Civmec (CVL), EGG Enero Group (EGG), EMB Embelton (EMB), MGH MAAS Group (MGH), MVF Monash IVF Group (MVF), Peet (PPC), QBE Insurance Group (QBE), SRG Global (SRG), Vita Life Sciences (VLS), WiseTech Global (WTC), Wiseway Group (WWG)

• Listing: None 

• Earnings: None

• AGMs: AMP (AMP)

Economic calendar (AEST):

• 4:00 pm: UK GDP (FEB)

• 10:30 pm: US PPI (MAR)