Morning Wrap: ASX 200 to fall, S&P 500 logs back-to-back losses, Gold prices surge

ASX 200 futures are down 31pts (-0.38%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks continued to pull back after the recent nine-day winning streak

• Defensive sectors continued to outperform amid macro uncertainty, the lack of trade deal progress and company guidance withdrawals

• Positive earnings updates from AUB, JB Hi-Fi and Temple & Webster

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks lower, finished near session lows

• Defensive tilt so far this week, with Utilities, Staples and Telcos outperforming on a relative basis

• Macro, earnings and trade headlines still relatively quiet, with some scrutiny surrounding trade de-escalation traction as Trump warns of pharma tariffs coming in the next couple of weeks

• Earnings front remains buoyant but macro headwinds resulting in names like Ford and Mattel withdrawing full-year guidance, Clorox also flagged softer consumption patterns and retailer destocking

• Market recovery is typical of bear market rallies, with sharp spikes and erratic swings, says Goldman Sachs (BBG)

• Global M&A falls to lowest level since 2005 amid tariff uncertainty and market volatility (RT)

• Companies ramping up buybacks, April estimate of US$234bn second highest on record (BBG)

• Tariff-immune stocks outperforming companies seen as more vulnerable to tariffs (NK)

STOCKS

• Palantir lifts full-year outlook after strong Q1 results, but shares tumble (YF)

• Ford withdraws guidance, flags US$1.5bn hit to operating profits due to tariffs, warns of supply chain disruptions (RT)

• Mattel scraps guidance and warns of higher prices due to tariffs, plans to speed up production shift away from China (FT)

• DoorDash acquiring Deliveroo for £2.9bn to expand internationally (RT)

• US shale producers to reduce capex due to falling oil prices, raising concerns about growing production (FT)

• Philips cut its 2025 profit margin forecast, citing a net impact from US tariffs of €250-300m (BBG)

• Tesla’s UK and Germany new car sales tumbled to a two-year low, down 62% and 46% year-on-year respectively (CNBC)

CENTRAL BANKS

• Fed faces trade-offs between navigating recession and managing stagflation risks (WSJ)

TARIFFS

• UK closes in on US trade deal by granting lower-tariff quotas for British car and steel exports (FT)

• Paul Tudor-Jones says he expects Trump to cut China tariffs by 50% (CNBC)

• Trump-Carney meeting taking place today, expectations are running low, viewed as a little more than a box-checking exercise (POL)

• Trump plans pharma tariffs within two weeks after signing EO to promote drug manufacturing in US (CNBC)

• Pharma industry says tariffs would hit supply chains, making medicines potentially unaffordable for some US patients (GD)

• China manufacturers look to work around US tariffs by fraudulently undervaluing cargo shipped to US (FT)

• China manufacturers begin planning substantial layoffs amid tariff headwinds (Nikkei)

• Trump to meet with Hollywood executives as industry figures struggle to interpret his tariff announcement (BBG)

ECONOMY

• China services activity falls to seven-month low with new work slowing sharply due to trade disruptions (BBG)

• UK business activity falls for the first time since October 2023 (RT)

ASX TODAY

• AUB guides FY25 underlying NPAT towards top end of $190-200m guidance (AUB)

• Auckland International Airport reaffirms FY25 underlying profit of NZ$290-320m and capex of NZ$1.0-1.3bn (AIA) 

• Aurizon issues trading update, notes appointment of administrators for Cenetrex and OneSteel Manufacturing (owed ~$50m), reaffirms full-year adjusted EBITDA guidance to the lower end of $1.66-1.74bn guidance (AZJ)

• Bega Cheese announces consolidation of Strathmerton operation into Ridge Street, requires capital investment of $50m and non-cash impairment of $30-40m, full implementation by mid-2026 to improve EPS by 2 cents (BGA)

• JB Hi-Fi provides Q3 sales update, with JB Australia sales up 6.5% year-on-year and comparable sales growth of 6.0% (JBH)

• NAB reports 1H25 cash earnings up 1.0% to $3.58bn, interim dividend of 85 cents per share and stable net interest margins of 1.7% (NAB)

• Wesfarmers seeking to sell portfolio of six Bunnings Warehouses valued at around $300 million (The Aus)

WHAT TO WATCH TODAY

• Gold: Gold prices surged 3.0% overnight to US$3,438 (but currently down 1.4%). This drove the Gold Miners ETF 4.2% higher. Despite a pullback this morning, the overall price move should be a net positive for local names.

• Defensive tilt: Defensive sectors continued to outperform overnight. Interestingly, local sectors are showing an odd mix of winners. In the past week, the top performing sectors are Tech (+5.6%), Real Estate (+3.8%), Discretionary (+2.4%) and Staples (+1.9%).

BROKER MOVES

• Computershare downgraded to Sell from Neutral; target price cut to $37.40 (GS)

Stocks trading ex-dividend: 

• Wed 7 May: Resmed (RMD) – $0.058

• Thu 8 May: Future Generation Australia (FGG) – $0.037

• Fri 9 May: Saferoads (SRH) – $0.10

Other ASX corporate actions today: 

• Dividends paid: Gullewa (GUL) 

• Earnings: National Australia Bank (NAB)

• IPOs: None

• AGMs: TPG Telecom (TPG)

Economic calendar (AEST):

• 9:00 am: Australia Ai Group Industry Index (APR)