Morning Wrap: ASX 200 to fall, S&P 500 snaps nine-day win streak + APA, NHF, Austal reaffirm FY25 guidance

ASX 200 futures are down 21pts (-0.25%) as of 8:30 am AEST.

In a nutshell:

• S&P 500 snapped a nine-day win streak amid a relatively quiet and low volume session

• Q1 earnings season has so far showcased better-than-expected earnings, but BofA warns of potential weakness in Q2

• Several companies including NHF, APA and Austal reaffirm FY25 earnings guidance

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks lower but finished a little off worst levels

• S&P 500 snapped a 9-day winning streak, something that’s only happened 14 times since 1970 and the first since 2004

• Average returns after a 9-day win streak is +0.7% (1m), +2.0% (3m), +0.05% (6m), +3.3% (9m) and +3.6% (12m), according to Goldman Sachs

• Very quiet session with limited catalysts and low volume

• A slight defensive rotation, with sectors like Staples, Industrials, Telcos and Real Estate closing around breakeven

• Incremental updates on trade, with Trump suggesting he would lower tariffs on China “at some point” and some deals could come as soon as this week, but overall light on details

• Taiwan dollar soars to 30 year high as exporters and insurers rush to hedge, amid speculation authorities might allow it to appreciate to help reach a trade deal with the US (BBG)

• Berkshire Hathaway sees Japan trading houses as 'super long-term' investment (NK)

EARNINGS SEASON

• Blended growth rate for S&P 500 reporters sits at 12.8% vs market expectations of 7.2%

• Bullish themes include tariff mitigation strategies, robust AI capex plans, resilient consumer spending trends, and strong profit margins 

• 24% of the 375 S&P 500 reporters have mentioned the word “recession” in their conference calls, up from 2% last quarter, according to Goldman Sachs

• Corporate sentiment typically lagged earnings growth by a quarter, BofA suggests weakness ahead

STOCKS

• Berkshire Hathaway shares dip 5% after the 94-year old Buffett announced his intention to step down as CEO (CNBC)

• Shell eyes BP takeover amid BP valuation dip, awaits further market weakness before deciding (BBG)

• Netflix, Amazon, Paramount Global and Warner Bros shares slip after Trump announced a 100% tariff on movies produced outside of the US (BBG)

CENTRAL BANKS

• Trump ramps up pressure on Fed after jobs surge, but markets and Fed push back on rate cuts (BBG)

TARIFFS

• Trump suggests that some trade deals could come as soon as this week, but no plans to speak with China's Xi over the near term (BBG)

• Trump shows willingness to lower China tariffs 'at some point' (SCMP)

• EU revives push for strategic partnership with CPTPP as Trump's return jolts global trade order (FT)

• Tokyo says it won't threaten to sell Treasuries in trade negotiations with Washington (RT)

• China's Asia neighbors wary of becoming staging posts for trade destined for US (FT)

• Trump says he would consider another TikTok sale extension if it were needed (BBG)

ECONOMY

• US April ISM Services printed 51.6, ahead of consensus for 50.2 and the highest since February 2024, with an acceleration in new orders (BBG)

• Swiss inflation was 0% in April, down from 0.3% in March (BBG)

ASX TODAY

• Civmec awarded several new contract awards and extensions valued at $285m (~$430m market cap) (CVL)

• HMC Capital guides annualised FY25 operating EPS (pre-tax) of 66 cents vs. prior guidance of 70 cents due to fair value movement of carrying positions, reaffirmed 12 cents per share dividend (HMC)

• NextDC reports March quarter pro forma contracted utilisation of 228MW, up 29% quarter-on-quarter, raises full-year capex guidance to $1.6bn (vs. prior $1.4bn) to build and deploy capacity for new customer contract wins (NXT)

• Qube working to gain a credit rating this year, suggesting this may be used to secure debt for an acquisition (The Aus)

• Vicinity Centres Q3 total portfolio retail sales up 2.4% year-on-year, FY25 FFO and adjusted FFO guidance upgraded to the top end of guidance ranges 14.5-14.8c and 12.3-12.6c respectively (VCX)

WHAT TO WATCH TODAY

• Gold: Spot prices rallied 2.8% overnight (or around 2.1% since our market close). The Gold Miners ETF (GDX) has experienced a sharp pullback over the past two weeks, down ~11%. The bounce in gold helped the ETF bounce 3.48% overnight, which should see some positive flow for local names.

BROKER MOVES

Data is pending and will be available soon.

Stocks trading ex-dividend: 

• Tue 6 May: None

• 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: None

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 11:30 am: Australia Building Permits (MAR)