Morning Wrap: ASX 200 to open flat, S&P 500 loses steam + Suncorp, Lynas results

ASX 200 futures are trading 4 points higher, up 0.05% as of 8:30 am AEDT.

Major US benchmarks gave back early gains on Friday but still logged weekly gains of more than 1%, Nvidia dropped back to breakeven levels from a session high of 4.9%, Fed policymakers continue to push back against cutting rates too early, the ASX is rife with M&A speculation across tech, mining and banks plus more results set to be released from names including Lynas Rare Earths, TPG and Suncorp.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 fades from best levels, closes slightly higher (Source: TradingView)

ASX TODAY

• Companies reporting today include Suncorp, TPG Telecom, Summerset Group, Michael Hill International, Lynas Rare Earths, Liberty Financial Group, Lindsay Australia and more

• Megaport on M&A watchlists as Slattery heads for exit (AFR)

• Charter Hall expected to pass on option to acquire remaining 50% of Paradice Investment Management (AFR)

• Transurban drops out of bidding for Denver’s Northwest Parkway Toll (AFR)

• Evolution Mining, Northern Star, Gold Road and Regis Resources tipped as ‘most likely’ buyers of Newmont’s Telfer mine stake (The Australian)

• Speculation around Bendigo Bank acquisition of Judo Bank (The Australian)

• Accent Group upgraded to Underperform from Sell at CLSA, target increased to $2.00 from $1.75  

• Brambles downgraded to Underperform from Hold at Jefferies but target increased to $13.22 from $12.92

• QUBE Holdings downgraded to Accumulate from Buy at Ord Minnett but target increased to $3.59 from $3.34

MARKETS

• S&P 500 finished slightly higher, down from session highs of 0.47%

• S&P 500, Dow and Nasdaq all rallied more than 1% for the week

• Nvidia opens 2.9% higher, rallies to a session high of 4.9% but fades to finish just above breakeven – Does this mark the beginning of a pullback

• Over the past decade, whenever Nvidia gapped up at least 2% from open to close (while trading at a multi-year high), it dropped every time over the next few weeks, according to SentimenTrader

• Nvidia is now worth more than the GDP of Russia, South Korea, Australia, Spain, Indonesia, Turkey, Netherlands and Saudi Arabia

• Bullish focus points for the week – Nvidia beat a very high bar and raised guidance, Fedspeak remains supportive of an eventual pivot, M&A activity in the financial services space, solid earnings from economic bellwether names like Walmart and Toll, Goldman Sachs raising S&P 500 2024 price targets and China cutting 5-year LPR by 25 bps

• Bearish focus points for the week – FOMC minutes flagged risk of premature easing, megacap concentration concerns, negative earnings/guidance reactions to many US large cap results, EV space continues to lag

• Money market funds experienced another week of outflows amid easing Fed rate cut expectations (Bloomberg)

• Strategists anticipate equities continuing their march higher but expect to see a correction over the next three months (Reuters)

• Cool Stat – It's been 309 trading days since ChatGPT was released and the Nasdaq is up around 46%. In the 309 trading days after Netscape (the first web browser) was released in December 1994, the Nasdaq was up 45.9%. By day 700, the Nasdaq was up as much as 130%.

STOCKS

• Nvidia market cap swells by record $277bn in a single day on results (Reuters)

• Nvidia's earnings spark surge in demand for call options in other AI stocks (Bloomberg)

• Reddit files for IPO, reveals narrowing losses for 2023 (Reuters)

• Buffett's Berkshire Hathaway reports operating earnings of just under US$8.5bn in Q4, up 28% year-on-year on insurance segment tailwind (CNBC)

• Berkshire Hathaway cash pile jumps to record US$167.6bn as Buffett says lack of meaningful deals means no chance of 'eye-popping performance' (Bloomberg)

• EV startups Rivian and Lucid struggling to sell cars (MSN)

CENTRAL BANKS

• Fed Governor Waller says there’s no urgency to ease given the strong economy, delaying rate cuts by a few months shouldn’t have a substantial impact on the economy (Bloomberg)

• Goldman Sachs economists push back view on when Fed will begin cutting interest rates to June from May (Bloomberg)

• PBOC shifting preference to surprise rate moves to revive confidence (Bloomberg)

• ECB's Holzmann says does not see rate cuts coming before the Fed (Bloomberg)

• RBI minutes show no signals from board of lower interest rates (Reuters)

GEOPOLITICS

• US says won't extend China semiconductor curbs to legacy chips (Nikkei)

• Israeli PM Netanyahu unveils postwar plan including complete security control of Gaza (FT)

• US plans sanctions against Russia to target 500 people and entities following Navalny death (Bloomberg)

ECONOMY

• German Ifo business climate survey edges up in February (Bloomberg)

• GfK UK consumer confidence falls amid concern over persistent inflation (FT)

• New Zealand retail sales fall sharply, fuels recession concerns (Bloomberg)

• China home prices shrink again, though at a slightly narrower pace (Reuters)

• China recovery bets ramp up on growing confidence policy officials can stem stock rout (Bloomberg)

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ASX corporate actions occurring today:

• Trading ex-div: Domino’s Pizza (DMP) – $0.55, HMC Capital (HMC) – $0.06, Winton (WTN) – $0.005, Annsell (ANN) – $0.252, Humm Group (HUM) – $0.007, Infomedia (IFM) – $0.02, Contract Energy (CEN) – $0.128, McGrath (MEA) – $0.03, Aurizon (AZJ) – $0.097, Codan (CDA) – $0.105, Santos (STO – $0.268, Hansen Technologies (HSN) – $0.05

• Dividends paid: Waypoint REIT (WPR) – $0.04

• Listing: None

Economic calendar (AEDT):

No major economic events.