Morning Wrap: ASX 200 to fall, S&P 500 near record highs, Market breadth flips negative

ASX 200 futures are down 36pts (-0.42%) as of 8:30 am AEDT.

In a nutshell:

• S&P 500 closed within 0.1% of all-time highs

• Breadth was extremely poor, with 9 out of 11 sectors lower and megacap names like Nvidia (+4.4%) propping benchmarks higher

• Quarterly updates from Alcoa, Mount Gibson, Regis Resources and more

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gapped up but finished off best levels (Source: TradingView)

OVERNIGHT MARKETS

• US benchmarks mostly higher but off best levels

• S&P 500 briefly traded above 6,100 but failed to hold on for a fresh record close (previously 6,090 set 6-Dec

• Breadth was extremely poor, with the Equal-weight S&P 500 underperforming the official benchmark by 97 bps

• Broad-based weakness for all sectors outside of Tech, which received a boost from Trump’s US$500bn investment in AI infrastructure

• US stock market “kind of inflated”, risks from deficit spending, inflation and geopolitical upheaval, says JPMorgan CEO Jamie Dimon (CNBC)

• 'Robust' IPO activity in 2025 says top NYSE exchange official (RT)

• China rolled out basket of measures to stabilise its stock markets, including easing rules for long-term funds (BBG)

STOCKS

• Netflix shares soar 9% after Q4 result topped all metrics, including a record 19m paid net adds vs. 8.9m consensus, raises 2025 revenue and margin outlook (RT)

• Amazon exiting its operations in Quebec, leading to the loss of about 1,700 jobs (RT)

• Salesforce CEO sees thousands of deals this quarter from AI-driven Agentforce product (BBG)

• Google agrees to new investment of more than US$1bn in Anthropic, building on 10% stake (CNBC)

• Puma announces cost-cutting plan amid falling profits (RT)

CENTRAL BANKS

• ECB's Knot says investor bets for interest-rate cuts in January and March are reasonable (BBG)

TRUMP

• Trump flags 10% tariff on China from 1-Feb, repeats threat to hit Mexico, Canada and EU with tariffs (RT)

• Trump threatens to ramp up sanctions and tariffs on Russia if the Ukraine war does not end (CNBC)

• Trump orders federal agencies to speed up permits in bid to shrink project timelines (BBG)

• Trump meets House, Senate Republican leaders to discuss GOP legislative agenda (WSJ)

• Trump adopts light touch approach to AI in aim to make US AI superpower (BBG)

• China sees room to avert trade war despite US tariff threat (FT)

ECONOMY

• New Zealand inflation unexpectedly held at 2.2% in the December quarter vs. expectations of further easing to 2.1% (BBG)

• Deflation risks push China provinces to cut CPI targets (SCMP)

ASX TODAY

• Alcoa reports Q4 EPS of $1.04 vs. $0.95 consensus, NYSE-listed shares up around 2.2% in after hours, provides 2025 production outlook (AAI)

• Lotus Resources advances Kayelekera Project, targeting first uranium production for September quarter 2025 (LOT)

• Mount Gibson reports Q2 production report, holds A$431m cash (vs. $384m market cap), operations tracking in-line with FY25 guidance (MGX)

• Regis Resources reports Q2 AISC of A$2,317/oz vs. A$2,495/oz a quarter ago, quarterly gold revenue of $482m, reaffirms FY guidance (RRL)

• Rio Tinto expects Resolution copper mine in Arizona to be given green light under new  Trump administration, previously delayed for 12 months over permits (FT)

• Star Entertainment lenders discuss with advisors over how a voluntary administration might go (AFR)

WHAT TO WATCH TODAY

• Sector weakness: All US sectors (ex-Tech) finished lower. We're seeing big breadth reversal after a solid ~6 days of good breadth. On a side note, most of the above resource-related ETFs finished 1-3% lower after a decent run. Let's see how the dust settles.

• Uranium: Another sizeable rally overnight for the Global X Uranium ETF (URA), up 4.0% but off session highs of 5.8%. It's now up 10.2% in the last two sessions. Most ASX-listed names like BOE, DYL and PDN opened 2-5% higher on Wednesday but finished up 7-14%. It appears that local names were front-running that overnight move, which could result in a rather choppy session today. Nevertheless, a big momentum thrust for the sector.

BROKER MOVES

• 29Metals resumed Outperform with $0.30 target; prior rating was Neutral (MQG)

• Evolution Mining downgraded to Underperform from Neutral; but target up to $5.50 from $5.20 (EVN)

• Lottery Corp upgraded to Overweight from Neutral; target up to $5.05 from $5.0 (JARD)

• Paladin Energy downgraded to Neutral from Buy; but target up to $10 from $9.90 (UBS)

Stocks trading ex-dividend: 

• Thu 23 Jan: Mirrabooka Investments (MIR) – $0.045

• Fri 24 Jan: None

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None

• Earnings: None

• AGMs: Myer (MYR), Premier Investments (PMV)

Economic calendar (AEDT):

No major economic announcements.