Morning Wrap: ASX 200 to rally, S&P 500 nears record highs + AMP, Cochlear, GQG earnings

ASX 200 futures are up 82pts (+0.96%) as of 8:30 am AEDT.

In a nutshell:

• US stocks rallied despite Trump tariffs and slightly hotter-than-expected January PPI report

• Trump administration undertaking studies on reciprocal tariffs, will be rolled out on country-by-country basis

• Cochlear reports soft earnings, GQG slightly ahead, AMP highlights further momentum in wealth business

Let's dive in.

S&P 500 SESSION CHART

S&P 500 trended higher to finish at best levels  (Source: TradingView)

OVERNIGHT MARKETS

• US benchmarks finished higher and near best levels, with the S&P 500 within 0.2% of all-time highs 

• Today’s big story – US producer inflation also exceeded expectations on higher food and energy costs, this has pushed back the Fed’s first rate cut of the year to October

• Trump tariffs driving some volatility, Trump announced reciprocal tariff plans but nothing implemented just yet, studies underway to determine actions on a country-by-country basis, considering actions such as value-added taxes, subsidies, regulations and currency manipulation as tariff equivalents 

• Traders piling into VIX calls amid rising market unease (FT)

• Trump tariffs to weaken US dollar if nations strike back at the US (BBG)

STOCKS

• Robinhood (+14.1%) shares surge after reporting Q4 revenue more than doubled thanks to crypto trading (BBG)

• Sony (+5.4%) lifts annual earnings projections; Q3 net profit up thanks to game, music segments (RT)

• Cisco (+2.1%) revenue guidance tops expectations as companies boost spending on AI network infrastructure (BBG)

• Reddit (-5.3%) user growth falls short of estimates following Google algorithm change (BBG)

• Activist investor Elliott builds £4bn stake in BP and seeks big asset sales (FT)

CENTRAL BANKS

• Fed Chair Powell says January CPI report shows more work left to do on inflation (BBG)

• Atlanta Fed's Bostic says caution needed on rate cuts pending clarity on inflation, policies (BBG)

• ECB's Nagel advocates for more gradual approach to rate cuts as policy rate nears neutral (BBG)

• ECB's Vujcic says rate cut expectations not unreasonable, but hinges on inflation slowdown (RT)

TRUMP

• Trump signs executive memorandum to introduce reciprocal tariff plan, White House says these will be imposed on a country-by-country basis, starting with countries with the highest trade deficit (BBG)

• Trump pushes to begin Ukraine peace negotiations after speaking with Putin and Zelensky (NYT)

• US Defense Secretary Hegseth urges NATO allies to hike defense spending target to 5% (PT)

• Israeli security cabinet member says Hamas expected to stick to six-week ceasefire (BBG)

• Australia has increased aluminum exports to US with Washington's approval (RT)

• Indian PM Modi to offer Trump deals on trade, energy and defense (FT)

ECONOMY

• US January core PPI in-line with consensus at 0.3% month-on-month but annualised running hot at 3.6% vs. 3.3% consensus (BBG)

• US egg prices soar as bird flu rips across farms (FT )

• Eurozone industrial production shrank by more than expected in December, down 1.1% month-on-month (RT)

• UK GDP bounces back in Q4, up 0.1% vs. flat growth in the previous quarter (BBG)

• Japan wholesale inflation accelerates amid surging rice prices (RT)

• US budget deficit widened to record $840bn over first four months of current fiscal year (BBG)

ASX TODAY

• Arcadium Lithium expects acquisition by Rio Tinto to become effective on March 6 (LTM)

• Cochlear reports 1H25 underlying NPAT growth of 7% to $205.5m, interim dividend up 8% to $2.15, expects FY25 NPAT to hit lower end of prior guidance (COH)

• GQG Partners reports full-year (ended 31-Dec-24) distributable earnings up 50.4% to $447.9 million, final dividend up 50.2% to 13.6 cents (GQG)

• Healius and Australian Clinical Labs resumed talks over potential merger, the pair previously carried out discussions in December 2023 (The Aus)

WHAT TO WATCH TODAY

• Cochlear – 1H25 results soft, with revenue and NPAT both around 2.5% below consensus, guidance sees FY25 NPAT at the lower end of $410-430m range vs. $426.6m consensus

• GQG Partners – FY distributable earnings of $447.9m tracking 3.4% ahead of Morgans estimates, dividend largely in-line. GQG shares have struggled to trend higher following Adani allegations in early December. Will be interesting to see how this one moves

• Gold, copper miners – Gold hit another record high overnight, with spot up 0.85% to US$2,928 an ounce, but Aussie gold underperformed due to US dollar weakness, up just 0.27% to A$4,636. Should still see some strength follow through for local goldies. Copper prices also rallied 2.0% higher to US$4.82, driving the Copper Miners ETF (COPX) 2.99% higher.

BROKER MOVES

• Domain Holdings upgraded to Buy from Hold; target up to $3.30 from $3.20 (BP)

• Domain Holdings downgraded to Overweight from Buy but target up to $3.30 from $3.25 (JARD)

• Graincorp upgraded to Buy from Hold but target cut to $9 from $9.30 (JEF)

• Newmont upgraded to Hold from Underperform; target up to $66.55 from $57.40 (CLSA)

• Northern Star upgraded to Outperform from Hold; target up to $19.50 from $17.85 (CLSA)

• Origin Energy upgraded to Neutral from Underweight but target cut to $10.25 from $10.45 (JARD)

• Orora downgraded to Hold from Buy; target cut to $2.10 from $3 (JEF)

• Pro Medicus upgraded to Buy from Hold; target up to $330 from $260 (BP)

• Pro Medicus downgraded to Market-weight from Overweight but target up to $297 from $275 (WLS)

• South32 upgraded to Buy from Neutral; target of $4.00 (CITI)

Stocks trading ex-dividend: 

• Fri 14 Feb: Ansell (ANN) – $0.353

• Mon 17 Feb: None

• Tue 18 Feb: Computershare (CPU) – $0.45, Sandon Capital Investments (SNC) – $0.014

• Wed 19 Feb: Commonwealth Bank of Australia (CBA) – $2.25

• Thu 20 Feb: JB Hi-Fi (JBH) – $1.70, Teaminvest Private Group (TIP) – $0.015

• Fri 21 Feb: Amotiv (AOV) – $0.185

Other ASX corporate actions today: 

• Dividends paid: Charter Hall (CLW), Cromwell Property (CMW), Mayfield Group (MYG)

• Listing: None

• Earnings: AMP (AMP), Abacus Storage (ASK), Cochlear (COH), GQG Partners (GQG), Mirvac Group (MGR)

• AGMs: None

Economic calendar (AEDT):

• 11:30 pm: US Retail Sales (Jan)