Morning Wrap: ASX 200 to rise, European stocks at record highs + BHP, Hub24 earnings

ASX 200 futures are up 21pts (+0.24%) as of 8:30 am AEDT.

In a nutshell:

• US market closed for Presidents Day (below data for S&P 500, Nasdaq etc. refer to the previous session, no US sector or ETF tables)

• European stocks soared to record levels, with Defence stocks logging the largest daily gain since the Russia invaded Ukraine

• Long list of 1H25 reporters today, including Baby Bunting, Challenger, Hub24, Judo Capital and more

Let's dive in.

S&P 500 SESSION CHART

S&P 500 daily chart (Source: TradingView)

OVERNIGHT MARKETS

• US market closed for Presidents Day, recognising Washington’s Birthday

• European shares marked a record close overnight, with the pan-European Stoxx 600 up 0.5%

• Other European benchmarks include the DAX (+1.26%), IBEX (+0.47%), FTSE 100 (+0.41%) and CAC 40 (+0.13%)

• Defence stocks soared as European leaders came to discuss regional efforts and appear willing to pledge more spending for the sector – Stoxx 600 Aerospace and Defence Index soared 4.2%

• Investors fearful some market gains are outpacing typical measures of underlying value in US stocks (WSJ)

• Trump's tariffs acting as notable overhang over upbeat European Q4 earnings season (BBG)

• Investors favor European currencies over dollar for yen bets amid trade tariff uncertainty (BBG)

• OPEC+ is mulls a delay in planned monthly supply increases (BBG)

• US and European energy firms face uranium supply risks amid rising nuclear demand (FT)

STOCKS

• Shein pressured to lower valuation to $30bn amid market volatility (BBG)

• Buffett's Berkshire Hathaway cuts stakes in BofA and Citi (FT)

• Bain concedes to KKR in $4bn fight for Japan's Fuji Soft (FT)

CENTRAL BANKS

• RBA poised to deliver first rate cut in four years (BBG)

• ECB's Panetta sees no need to delay rate cuts as inflation target approaches (BBG)

• Eurozone forecasters predict ECB will resume rate cuts below 2% by 2026 (BBG)

GEOPOLITICS 

• Trump believes he could meet Putin soon to discuss ending Ukraine conflict (RT)

• EU officials prepare new defense spending package as Trump pushes for quick end to Ukraine war (BBG)

• German chancellor Scholz calls for changes to borrowing rules for increased defense funding (BBG)

• EU prepares new sanctions against Russian shadow fleet, awaiting Trump administration's stance (WSJ)

• China urges US to correct mistakes after state department updates Taiwan policy wording (RT)

• Beijing will have to hit back at any further unilateral US sanctions (BBG)

ECONOMY

• China bank lending in January hits record high (RT)

• Japan Q4 GDP up 2.8% vs. 1.0% consensus, driven by improved business spending and a surprise increase in consumption (RT)

ASX TODAY

• Adriatic Metals intends to undertake a two tranche institutional placement to raise $80m at $3.90 per share (ADT)

• Baby Bunting reports 1H25 sales up 2.4% to $254.4m, NPAT up 37% to $4.8m, no interim dividend, first 7 week comp sales up 2.8% (BBN)

• BHP reports 1H25 revenue down 8% to $25.1bn, interim dividend of 50 US cents per share at a 50% payout ratio (BHP)

• Challenger reports 1H25 normalised NPAT up 12% to $225m, interim dividend up 12% to 14.5 cps, on track to achieve FY25 earnings guidance (CGF)

• Hub24 1H25 platform inflows up 31% to $9.5bn, NPAT up 40% to $42.6m, interim dividend up 30% to 24 cps, FY26 platform FUA target upgraded to $123-135bn vs. prior $115-123bn guidance (HUB)

• Judo Capital reports 1H25 statutory NPAT up 70% to $40.9m, net interest margin of 2.81%, upgrades FY25 NIM guidance to top end of prior guidance 2.80-2.90% (JDO)

• Monadelphous 1H25 NPAT up 41.3% to $42.5m, in-line with $40-43m guidance, interim dividend of 33 cps, guides to high single digit revenue growth for FY25 (MND)

• Qualitas Real Estate Income Fund shortfall book close date moved forward to today as they have already received offers beyond the $151m total offer size (AFR)

• Reliance Worldwide 1H25 12.3% adj NPAT growth to US$76m, expects group external sales to be up mid-single digit percentage points in FY25 (RWC)

• Worley could look to acquire parts of rival John Wood Group (The Aus)

WHAT TO WATCH TODAY

• Baby Bunting – 1H25 numbers mostly in-line with estimates. However, the market was expecting a dividend (Morgans 2.3 cps). Management plan to use proceeds to support capex program and growth initiatives 

• Hub24 – Broad beat, with revenue, adj EBITDA and NPAT 2.9%, 7.6% and 13.3% ahead of consensus respectively. FY26 platform FUA upgrade represents a 7.0% upgrade at the midpoint vs. prior guidance. The only challenge here is that Hub is trading at record highs and up 25% since its 1Q25 update on 20 Jan

• Judo Capital – A bit of a mixed result, with 1H25 NIM of 2.81% below 2.83% consensus but cash NPAT 13% beat. The NIM upgrade sounds nice but consensus is already sitting at 2.90%. JDO shares are up 61% in the past twelve months 

• Reliance Worldwide – 1H25 Revenue, adjusted EBITDA and adj NPAT beat consensus by 1.5%, 1.3% and 3.4% respectively. Interim dividend of 2.5 US cents per share is a sizeable miss but compensated by a $19.5m on-market buyback (equivalent to 2.5 US cents per share) 

BROKER MOVES

• A2 Milk upgraded to Outperform from Neutral; target up to $7.85 from $5.70 (MQG)

• Audinate upgraded to Buy from Hold; target up to $12 from $9 (JEF)

• Bluescope Steel downgraded to Underweight from Neutral but target up to $23.20 from $21.80 (JARD)

• Northern Star downgraded to Hold from Buy; target remains $20 (BP)

• Judo Capital upgraded to Positive from Neutral; target is $2.23 (E&P)

• Westpac downgraded to Underweight from Neutral; target remains $31.20 (JARD)

Stocks trading ex-dividend: 

• Tue 18 Feb: Computershare (CPU) – $0.45, Insurance Australia (IAG) – $0.12, Sandon Capital Investments (SNC) – $0.014

• Wed 19 Feb: Commonwealth Bank of Australia (CBA) – $2.25, Domain Holdings (DHG) – $0.02, GQG Partners (GQG) – $0.042

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

• Fri 21 Feb: Amotiv (AOV) – $0.185, ASX (ASX) – $1.112

Other ASX corporate actions today: 

• Dividends paid: Midway (MWY)

• Listing: None

• Earnings: ARB Corp (ARB), BHP (BHP), Challenger (CGF), Dexus (DXS), Hub24 (HUB), Humm Group (HUM), Infomedia (IFM), Judo Capital (JDO), James Hardie (JHX), Macmahon Holdings (MAH), MinRes (MIN), Monadelphous Group (MND), Reliance Worldwide (RWC), Siteminder (SDR), SG Fleet Group (SGF), SRG Global (SRG)

• AGMs: None

Economic calendar (AEDT):

• 1:30 pm: RBA Interest Rate Decision (Consensus: 25 bp cut)

• 5:00 pm: UK Unemployment Rate (Dec)

• 11:30 pm: Canada Inflation (Jan)