Morning Wrap: ASX 200 to rally, S&P 500 logs best session since November, gold crosses US$3,000

ASX 200 futures are up 85pts (+1.08%) as of 8:30 am AEDT.

In a nutshell:

• The S&P 500 logged its best session since Nov-24, largely due to oversold conditions

• Gold prices briefly cross US$3,000 an once for the first time on record

• Spartan Resources and SmartPay potentially M&A plays today

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, finished at best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks bounced and finished near best levels

• S&P 500 logged its best session since November but still down for a fourth straight week

• US weekly recap: Dow (-3.07%), Nasdaq (-2.43%), S&P 500 (-2.27%), Russell 2000 (-1.51%)

• Bullish focus points: US February core CPI cooler-than-expected, US-Canada trade tensions seemed dialed back, Visa and Mastercard both highlighted steady spending trades in Q1, BofA says this is a correction and not a bear market for US stocks, strong contrarian buy signal with AAII bulls below 19% and bears above 57% (first time since 1990) 

• Bearish focus points: Trump declined to rule out recession and downplayed market weakness, no letup in trade tensions as US tariffs on steel and aluminium went into effect and quickly met with retaliatory measures from Canada and EU, US retailers continue to guide down for Q1, largest weekly outflow in US equities last week

• Trump's tariffs hurt US stocks more than other markets (BBG)

• China stocks hit highest level this year (BBG)

• Growth fears hit junk bonds as cost to protect against default hits Aug-2024 high (BBG)

STOCKS

• Hon Hai Precision Industry misses estimates, due to weak Chinese iPhone sales that eroded margins (BBG)

• BMW posts 37% drop in annual net profit, warns of 'subdued' Chinese demand (FT)

CENTRAL BANKS

• ECB President Lagarde warns trade would have severe consequences for global economy, inflation (BBG)

TRADE WAR

• Trade wars with US allies could spiral as Trump tries to get trading partners to back down from retaliation with new threats (NYT)

• Lutnick and Canadian officials have "extremely productive" meeting on tariffs (GN)

• US importers of European wines say they would have to foot the bill of Trump's tariff, warn of closure and layoffs (RT)

ECONOMY

• Trump and Senate GOP make no headway in whether to include debt ceiling increase in tax-and-spending package (Bloomberg)

• UK GDP unexpectedly contracts 0.1% in January amid manufacturing decline (FT)

• German inflation eases to 2.6% in February, down from initial estimates of 2.8% in positive sign for ECB (Bloomberg )

• China activity data forecast to show signs of economic stabilisation in January (BBG)

ASX TODAY

• Carnarvon Energy proposes capital return of 7 cents per share (approx 6.3% yield) (CVN)

• National Australia Bank CFO Nathan Goonan resigns after meeting his contractual obligations (NAB)

• Regal Partners CEO Brendan O’Connor discloses sale of 1.2m shares, beneficially owns 8.9m shares after the transaction (RPL)

• Spartan Resources in advanced talks to merge with Ramelius Resources, a low-premium deal could be announced this week (AFR)

• Tyro Payments offering NZ$1 per share for SmartPay, offer comprises mostly scrip consideration (AFR)

  • SmartPay confirms Tyro takeover offer, but has also received a second non-binding offer from an international strategic party (SMP)

• Webjet holder Mitsubishi UFJ Financial Group discloses purchase of 4.5m shares, beneficially owns 45.4m shares after the transaction or 11.6% of the company (WJL)

• Westpac settles auto finance class action filed in July 2020 for $130m, this was largely provided for as at 31-Dec-24 (WBC)

WHAT TO WATCH TODAY

• Oversold bounce or genuine bottom: Markets have been struggling to find a bottom, but today's session — if it closes green — will be the first daily higher high since 14 February. In other words, the market hasn’t posted back-to-back gains in over a month. While US stocks bounced strongly overnight, some of the market's best sessions often follow the worst. This rebound is noteworthy, but sustained follow-through and stabilisation are needed to signal a true bottom.

• Sectors to bounce: Several overnight ETFs bounced more than 3%, including Steel (+4.0%), Rare Earths (+3.6%), Cloud (+3.2%) and Semis (+3.0%). Steel stocks rallied on Trump's 25% tariffs on Canadian steel, which may see positive flow for a name like Bluescope. The Rare Earths/Strategic Metals ETF hit a two-month high, signally further bottoming action.

• Tin stocks: Tin prices spiked on Friday after one of the world's largest miners (Alphamin) announced a temporary shutdown of its Bisie mine in the DRC (~6% of global supply). This drove Metals X shares 22% higher. I wonder if a supply shock of this magnitude could drive a sustained short-term spike for tin-related stocks (similar to what happened to manganese markets last year)

BROKER MOVES

• Ramsay Healthcare upgraded to Outperform from Neutral but target cut to $37.70 from $38.65 (MQG)

Stocks trading ex-dividend: 

• Mon 17 Mar: Austin Engineering (ANG) – $0.006, Chorus (CNU) – $0.177, HUB24 (HUB) – $0.24, L1 Long Short Fund (LSF) – $0.063, Ramelius Resources (RMS) – $0.03, Saunders International (SND) – $0.02, SKS Technologies Group (SKS) – $0.01

• Tue 18 Mar: Credit Corp Group (CCP) – $0.32, Nido Education (NDO) – $0.058, NZME (NZM) – $0.054, Reece (REH) – $0.065, Seek (SEK) – $0.24

• Wed 19 Mar: Auckland International Airport (AIA) – $0.056, Brisbane Broncos (BBL) – $0.02, Briscoe Group Australasia (BGP) – $0.091, CTI Logistics (CLX) – $0.05, Enero Group (EGG) – $0.015, Genesis Energy (GNE) – $0.064, Helia Group (HLI) – $0.69, LGI (LGI) – $0.012, Macmahon (MAH) – $0.006, Peet (PPC) – $0.028, Pepper Money (PPM) – $0.071, Perenti (PRN) – $0.03, Shriro (SHM) – $0.02

• Thu 20 Mar: a2 Milk Company (A2M) – $0.065, Cochlear (COH) – $2.15, Earlypay (EPY) – $0.001, K&S Corporation (KSC) – $0.08, Kelsian Group (KLS) – $0.08, Service Stream (SSM) – $0.025, Spark New Zealand (SPK) – $0.108, Supply Network (SNL) – $0.32, Tourism Holdings Rentals (THL) – $0.023

• Fri 21 Mar: a2 Milk Company (A2M) – $0.065, Cochlear (COH) – $2.15, Earlypay (EPY) – $0.001, K&S Corporation (KSC) – $0.08, Kelsian Group (KLS) – $0.08, Service Stream (SSM) – $0.025, Spark New Zealand (SPK) – $0.108, Supply Network (SNL) – $0.32, Tourism Holdings Rentals (THL) – $0.023

Other ASX corporate actions today: 

• Dividends paid: APA Group (APA), Centrepoint Alliance (CAF), Codan (CDA), Fiducian Group (FID), Objective Corp (OCL), Regal Partners (RPL)

• Listing: None

• Earnings: None

• AGMs: None

Economic calendar (AEDT):

• 1:00 pm: China Industrial Production, Retail Sales, Fixed Asset Investment (JAN-FEB)

• 11:30 pm: US Retail Sales (FEB)