Morning Wrap: ASX 200 to rise, Dow bounces, Nasdaq lower as investors rotate out of tech

ASX 200 futures are up 31pts (+0.37%) as of 8:30 am AEDT.

In a nutshell:

• Nasdaq continued to ease as investors rotated out of major tech names

• S&P 500 and Dow positive, most US stocks finished higher, led by Materials, Tech and Healthcare sectors

• Yields and the US dollar remain a problem as both continued to tick higher overnight

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, well off session lows (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mixed but well off worst levels

• S&P 500 finished up 0.16%, rallying from session lows of -0.92%

• Strong breadth, with more than 70% of S&P 500 constituents closing higher

• Yields continue to dampen risk appetite, the US 10-year yield is up more than 115 bps since the Fed kicked off the current easing cycle

• S&P 500 earnings forecast to increase 11.7% year-on-year in Q4, the strongest growth in three years

• Investors hope corporate earnings growth can revive faltering stock market rally amid fading bets for quicker Fed rate cuts (WSJ)

• Hedge funds increased bearish bets ahead of Friday's strong US jobs report, says Goldman Sachs (Reuters)

• Stronger US dollar to boost domestically oriented sectors over those with global revenues, says Morgan Stanley's Wilson (BBG)

• Strong US jobs report reinforces expectations for higher for longer rates; some fear inflation rebound (RT)

• Global bond yield backup triggering a lot of worries about start to 2025 (BBG)

• BofA strategists see weaker demand for long-duration, investment grade bonds amid hawkish Fed repricing (BBG)

• Bitcoin briefly dips below $90,000 to lowest level since November (CNBC)

• Tougher US sanctions set to curb Russian oil supply to China and India sending crude to four-month high (BBG)

STOCKS

• Nvidia Blackwell customers delaying orders over overheating, glitches in how chips connect with each other (RT)

• Optimism over US banks set to be put to the test with earnings this week (YH)

• Airline bosses bullish over 2025 but industry remains vulnerable to unexpected problems like recession, inflation rebound (NYT)

• TSMC Q4 profit expected to surge 58% on strong AI chip demand (RT)

CENTRAL BANKS

• ECB's Vujcic says central bank unlikely to speed up rate cut pace (BBG)

• ECB's Rehn says more rate cuts will be needed irrespective of Fed moves (BBG)

• BoE faces inflation challenge as CPI set to remain elevated (BBG)

• China ramps up support for yuan with tweaks to its capital controls and vows to crack down on market disruption (BBG)

ECONOMY

• China export growth beats estimates ahead of potential tariff increase (BBG)

• PBOC chief says China will promote role of consumption in the economy, move away from investment focus (BBG)

ASX TODAY

• Bravura Solutions confirms 16.3 cents per share return of capital or a yield of approximately 7.4% (BVS)

• MAF Financial to raise ~$300m for listed private credit trust, sources say MA has begun contacting potential investors about the raise, as it targets managing $15bn by the end of 2026 (The Aus)

• Telix Pharmaceuticals reports preliminary Q4 revenue growth of 46% to $218m, upgrades FY revenue guidance to $783m vs. prior $745-776m and $771m consensus (TLX)

• Xingchun Wang discloses 5.5% stake in The Star, the mystery investor is Macau-based, listed address as the Windsor Arch high-rise project (AFR)  

WHAT TO WATCH TODAY

• Resource bounce: Energy (+2.2%) and Materials (+2.2%) were the best performing S&P 500 sectors. Continued strength across several commodities like oil (Brent up 1.5% to four-month high), copper (up 0.75% to three-month high) and a small bounce in iron ore prices (up 0.4% to US$99.35)

• Gold weakness: Bullion prices eased -1.0% overnight, snapping a four-day win streak.

• Retailers: Premier Investments (-15.9%) and Myer (23.1%) suffered steep selloffs yesterday after trading updates flagged weaker-than-expected earnings. PMV guided to 1H25 sales between $855-865m or 2.2% below Macquarie estimates (as of Nov-24). The result dragged most retail stocks lower (e.g. BRG -3.4%, WES -2.2%, LOV -1.8%). It will be interesting to see if PMV is hit with consensus downgrades today.

BROKER MOVES

• MA Financial upgraded to Neutral from Underperform; target up to $11 from $9 (BofA)

• Newmont initiated Buy with $76.20 target (GS)

• Northern Star Resources upgraded to Buy from Neutral; target up to $20 from $16.60 (GS)

Stocks trading ex-dividend: 

• Tue 14 Jan: None

• Wed 15 Jan: Tower (TWR) – 4.22%

• Thu 16 – Fri 17 Jan: None

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None

• Earnings: None

• AGMs: None

Economic calendar (AEDT):

• 9:30 am: Australia Consumer Confidence (Jan)

• 11:30 pm: US Producer Price Index (Dec)