Morning Wrap: ASX 200 to rise, S&P 500 attempts to bounce, Gold soars despite rising yields

Major US benchmarks tried to bounce on Friday but finished the week lower, gold marked its best week since last October and pushed above US$2,300 for the first time, copper had another strong week and near its highest levels since mid-2022, oil continues to trade around six month highs after adding 4.5% last week, March US payrolls beat expectations while the unemployment rate remained unchanged and the ASX continues to be bombarded with M&A activity.

Let's dive in.

S&P 500 SESSION CHART

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

MARKETS

• S&P 500 higher in Friday trading, led by tech and energy stocks

• Major US benchmarks lower for the week: Russell 2000 (-2.87%), Dow (-2.27%), S&P 500 (-0.95%) and Nasdaq (-0.80%)

• Bond yields snapped a three-day losing streak on Friday after better-than-expected nonfarm payrolls data, the US 10-year closed at the highest level since Nov-23 

• Gold logged another record close and finished the week up 4.8%, marking its best week since October and pushing through US$2,300

• Copper prices finished near breakeven, up from session lows of -1.9% and logged a weekly gain of 5.7% to near two-year highs

• US CPI out on Thursday, consensus is looking for a 0.3% month-on-month increase in both headline and core inflation – which would push core CPI down 0.1 percentage points to 3.7% year-on-year

• S&P 500 earnings expected to increase for third straight quarter in Q1; big tech concentration, cracks in consumer resilience key areas of focus (MSN)

• Strong margins from big tech expected to be big driver of Q1 earnings growth (Bloomberg)

• Money market assets hit new all-time peak as weekly inflows rise to highest in three months (Bloomberg)

• Yen volatility dictated by US data (Bloomberg)

• After plunging to multi-year lows in Q1, demand for equity market protection picking up (Bloomberg)

• Oil prices up for second week on tensions in Europe and Middle East, limited supply, and strong global demand (Reuters)

ASX TODAY

• Ansell prepares $400m equity raise for M&A (AFR)

• APM Human Services largest shareholder Madison Dearborn submits revised non-binding indicative offer (AFR) 

• Macquarie pulls out of UK’s Heathrow Airport bid (The Telegraph)

• Macquarie, Westpac and Bendigo Bank potential buyers of Judo (The Australian)

• Netwealth Chairman Tim Antonie discloses sale of 45,000 shares, beneficially owns 55,000 shares following the transaction (NWL) 

• Perseus Mining declares offer from OreCorp unconditional (PRU)

• Perpetual turns into two-horse race as bidders team up (AFR)

• Qoria expected to receive takeover proposal from K1 on Monday (AFR)

BROKER NOTES

• Boss Energy initiated Equal-weight with $4.60 target (JPMorgan)

• Capricorn Metals downgraded to Underperform from Neutral; target remains $4.80 (Macquarie)

• Endeavour Group initiated Neutral with $5.94 target (Citi) 

• Orica reinstated Overweight with $19.0 target (JPMorgan)

• Paladin Energy initiated Overweight with $1.75 target (Morgan Stanley)

INTERNATIONAL STOCKS

• Samsung Electronics expects tenfold increase in Q1 profit on chip demand (Bloomberg)

• Apple lays off over 600 California employees after shutting car project (CNBC)

• Nvidia plans US$200m AI centre in Indonesia and targeting broader expansion across South-East Asia (CNBC)

• Musk says Tesla will reveal robotaxi product on 8 August (CNBC)

CENTRAL BANKS

• BOJ Governor Ueda signals chance of another rate hike (Bloomberg)

• Central banks ramping up use of Fed's foreign reverse repo facility amid FX intervention warnings (Bloomberg)

• Economists eyeing RBNZ rate cuts in third or fourth quarter of 2024 (Reuters)

• Pressure on yuan may complicate PBOC easing plans (SCMP)

GEOPOLITICS

• Israel announces new measures to allow more aid into Gaza, including opening Erez border crossing (Washington Post)

• Biden says further support for Israel contingent on lowering civilian toll and potential ceasefire (FT)

• Yellen says US-China relations more stable and China reportedly willing to have further discussions on excess industrial capacity and government support (Reuters)

ECONOMY

• US March non-farm payrolls of 303,000 ahead of consensus 205,000 while unemployment rate was in-line and unchanged at 3.8% (Reuters)

• German industrial orders continue to decline (Reuters)

• UK economy shows signs of a strong rebound in all major sectors for the first time in nearly two years (Bloomberg)

• UK retail sales have been declining for 6 straight months (London Times)

• Japan household spending contracts further as inflation weighs (Bloomberg)

Sectors to Watch: Gold

The ASX 200 is set to open higher following a solid bounce for overnight markets. However, the bond yields (e.g. US 10-year yield at 4.40%, highest since late Nov-23) are starting to push towards uncomfortable levels – this will eventually matter for risk assets.

M&A: Can we just take a momentum to appreciate how it's Monday morning and there's already heaps of M&A headlines/speculation (e.g. Ansell's $400m cap raise for acquisitions, APM Human Services and Perpetual bids continue, major banks eye Judo Capital and US private equity firm K1 builds a stake in Qoria)

Gold kicks on: Gold up 1.77% last Friday and managed to finish at best levels (and up from session lows of -0.92%). This drew a strong response for the VanEck Gold Miners ETF, up 3.2% to levels not seen since May 2023. A lot of local gold names reversed early losses last Friday (e.g. Evolution up 2.36% from session lows of -1.05% and Northern Star up 0.5% from session low of -1.8%). Let's see if they can start the week on a strong note.

Companies trading ex-dividend: 

• Mon 8 April: None

• Tue 9 April: Brickworks (BKW) – $0.24

• Wed 10 April:

• Thu 11 April:  Cosol (COS) – $0.01, Duxton Water (D20) – $0.036

• Fri 12 April: Kogan (KGN) – $0.075 

Other ASX corporate actions today: 

• Dividends paid: Perpetual (PPT) – $0.65, Fleetwood (FWD) – $0.025, Austin Engineering (ANG) – $0.004, Cleanaway Management (CWY) – $0.02, Atlas Arteria (ALX) – $0.20, Endeavour Group (EDV) – $0.14 

• Listing: None

Economic calendar (AEST):

• 12:30 pm: Australia Home Loans (Feb)

• 5:00 pm: Germany Balance of Trade (Feb)