Morning Wrap: ASX 200 to rise, Nasdaq bounces + Pilbara Minerals, Perseus quarterlies

ASX 200 futures are up 36pts (+0.43%) as of 8:30 am AEDT.

In a nutshell:

• S&P 500 and Nasdaq recouped some of yesterday's Nvidia-led losses

• Mixed overnight corporate earnings including Lockheed Martin, General Motors and SAP

• Several miners reported December quarter results including Pilbara Minerals, Boss Energy and Vault Minerals

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks finished higher and near best levels

• Overnight rally followed yesterday's big decline for the US market, which saw the Nasdaq down 3% amid a broad selloff within the AI complex

• S&P 500 still down 0.55% in the last two sessions, while Dow is up 0.96% to a near two-month high

• Breadth was negative as Equal-weight S&P 500 trailed the cap-weighted index by ~140 bps, reversing most of yesterday's outperformance

• Multiple themes emerging from DeepSeek news, including favourable demand implications due to more efficient computing and thoughts the near-term threat to AI capex ramp may be overblown

• Retail investors set a new record by purchasing US$562m worth of Nvidia stock during yesterday's selloff

STOCKS

• LVMH sales ticked slightly higher in Q4 as wealthy holiday customers remain cautious on spending (BBG)

• Lockheed Martin shares dip 8% on softer-than-expected Q4 revenue and disappointing forward guidance (RT)

• General Motors shares sink 10% despite better-than-expected Q4 earnings (EPS of $1.92 vs. $1.89 ests) (RT)

• Pork producer Smithfield shares slip after US$522m IPO (BBG)

• Microsoft in talks to acquire TikTok US (BBG)

• SAP Q4 results beat and raised FY25 operating profit (RT)

• Mercedes-Benz confident in Q4 margin performance despite challenging market conditions (RT)

CENTRAL BANKS

• Bank of Canada to make downshift pace of rate cuts amid threat of trade war with US (BBG)

AI

• Nvidia suffers record drop by market cap, leveraged NVDA ETFs experience massive losses (BBG)

• Nvidia praises DeepSeek, says it complied with US export controls (BBG)

• Trump sees DeepSeek breakthrough, says it should be a ‘wake up’ call to US industry, AI efficiency potential as positive (RT)

• DeepSeek challenges AI cost assumptions and may spur efficiency drive (BBG)

• Industry experts pick holes in DeepSeek; say it likely spent more than widely reported $6m figure (RT)

• DeepSeek systems strained amid cyberattack, company limits signups to mainland China phone numbers (BBG)

ECONOMY

• US December durable goods orders down 2.2% MoM vs. consensus for a 0.6% increase, marking the weakest reading since June and the fourth decline in the past five months (RT)

• Trump flags tariffs on chips, commodities; starting tariff rate "much bigger" than 2.5% (FT)

• Japan corporate services inflation remains elevated with pricing pressures persisting (RT)

• Australia business conditions strengthen amid retail sector rebound (BBG)

ASX TODAY

• Accent Group guides 1H25 EBIT of $80m vs. Citi ests of $74m (22-Nov-24) but gross margins down 100 bps due to ongoing promotional trading environment (AX1)

• Boss Energy reports Q2 uranium production of 137,084 lbs, on track to meet FY25 production guidance (BOE)

• Perseus Mining reports Q2 gold production of 132.4koz vs. 121.3koz a quarter ago, production for 1H25 and CY24 was towards the upper end of guidance ranges in each case while AISC were below the bottom end (PRU)

• Pilbara Minerals reports Q2 spodumene production of 188.2kdmt or 1.5% ahead of 185.3kdmt consensus, 204.1kdmt shipments or 9.3% beat and US$700/dmt realised price vs. $673.1/dmt consensus (PLS)

• Star Entertainment to divest The Star Sydney Event Centre and other additional spaces within The Star Sydney complex to Foundation Theaters for A$60m (SGR)

• Vault Minerals reports Q2 gold production, tweaks FY gold sales guidance down to 390-410koz from 390-430koz (VAU)

WHAT TO WATCH TODAY

• Lots of quarterlies and preliminary earnings: At a glance, Accent looks like a mixed bag as solid EBIT is offset by a much larger-than-expected deterioration in margins, Perseus looks solid on strong production and cost control, Pilbara continues to crush expectations (operationally speaking) and Vault might see some pressure on the slight guidance downgrade

• Tech bounce: Local tech stocks experienced a selective bounce on Wednesday (e.g. Xero opened -1.4%, closed +1.7%). While data centre names like NextDC finished 7.2% lower, up from session lows of -9.2% but off highs of -5.1%.

• Gold strength: Gold has recouped almost the entirety of Wednesday's 1.1% selloff. The strength of the US dollar (DXY +0.43% overnight) has pushed Aussie gold prices up 1.4% overnight to a record $4,420 an ounce.

• Copper weakness: Not too much movement in copper prices overnight but heavy selling across most major copper mines like Lundin (-4.1%), Antofagasta (-2.2%) and First Quantum (-2.2%). This dragged the Global X Copper Miners ETF down to near one year low.

BROKER MOVES

• AGL Energy upgraded to Outperform from Neutral; target up to $12.08 from $11.67 (MQG)

• Liontown upgraded to Neutral from Underweight; target cut to $0.63 from $0.68 (JARD)

Stocks trading ex-dividend: 

• Mon 27 Jan: None

• Tue 28 Jan: None

• Wed 29 Jan: None

• Thu 30 Jan: Djerriwarrh Investments (DJW) – $0.072, 360 Capital Mortgage REIT (TCF) – $0.052, Perpetual Credit Income Trust (PCI) – $0.007, KKR Credit Income Fund (KKC) – $0.017, Gryphon Capital Income Trust (GCI) – $0.014

Other ASX corporate actions today: 

• Dividends paid: Metcash (MTS), Turners Automotive (TRA) 

• Listing: None

• Earnings: Atlas Arteria (ALX)

• AGMs: Sigma Healthcare (SIG)

Economic calendar (AEDT):

• 10:30 am: Australia Inflation (Dec)

• 5:00 pm: Germany Consumer Confidence (Feb)

• 12:45 am: Canada Interest Rate Decision (Consensus: 25 bp cut)