Morning Wrap: ASX 200 to rise, S&P 500 bounces after CPI selloff+ Telstra, Wesfarmers results

Major US benchmarks recovered some of yesterday's inflation-triggered selloff, Bitcoin crosses the US$1 trillion market cap level for the first time in more than two years, markets expect only four Fed rate cuts this year (from six just a few weeks ago), Nvidia briefly overtakes Apple as the third-largest company in the world, UK inflation unexpectedly held steady in January and a long list of companies are due to report today, including Telstra and Wesfarmers.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher and finished at best levels (Source: TradingView)

ASX TODAY

Note: There was an error in overnight data tables. They will be back tomorrow.

• ASX 200 set to bounce after a strong lead from Wall Street

• Companies due to report today include Corporate Travel, Goodman Group, Origin Energy, South32, Telstra, Treasury Wines, Wesfarmers and more

• Telstra 1H24 consensus numbers include $11.72bn revenue and $4.02bn EBITDA

• Wesfarmers 1H24 consensus numbers include $2.2bn EBITDA and $1.36bn NPAT

• Magellan may announce new CEO with today’s earnings release (The Australian)

• Fletcher Building downgraded to Neutral from Buy at Goldman Sachs, target price cut to $3.70 from $4.65

• IDP Education downgraded to Neutral from Overweight at JPMorgan, target price cut to $23.00 from $25.00 

• Graincorp upgraded to Add from Hold at Morgans, target price increased to $8.55 from $8.08

• Evolution Mining upgraded to Buy from Outperform at CLSA, target price increased to $3.75 from $3.50 

MARKETS

• S&P 500 +0.96%, Dow +0.40%, Nasdaq +1.30%, Russell 2000 +2.44%

• S&P 500 higher, finished near best levels but still down 0.4% since last Friday’s inflation report

• Russell 2000 bounces but likewise, still down 1.6% since the CPI selloff

• Selloff into overnight bounce suggests an orderly drawdown/no signs of panic selling

• Market repricing toward higher-for-longer Fed policy stance, now expecting only 4 rate cuts by year-end, down from 6 a few weeks ago

• Economists argue that pieces of the disinflation narrative remain in place such as softening wage growth, rising productivity, ongoing goods disinflation and falling inflation expectations 

• Nvidia briefly overtakes Apple as third-largest company after overtaking Amazon earlier this week (Reuters)

• Global bond rally sparked by Powell's December pivot evaporates (Bloomberg)

• Credit risk metrics remain suppressed despite repricing of Fed rate cuts Bloomberg)

• Oil falls after US crude stockpiles rose last week more than expected (Reuters)

STOCKS

• Walmart considering acquiring Vizio for over US$2bn (Reuters)

• Jeff Bezos unloads another US$4bn of Amazon stock (Bloomberg)

• Airbnb posts revenue gain, sees strong demand ahead (AP)

• Lyft soars more than 60% before correction to margin growth outlook (FT)

• Instacart to lay off 250 employees or 7% of workers, as part of restructuring (CNBC)

• Softbank and Nvidia to establish industry group to commercialise new AI technology (NHK)

• Siemens to make transformers in US to meet rising power demand (Bloomberg)

• China's BYD plans new electric vehicle plant in Mexico (Reuters)

• German manufacturer Continental to cut 7,150 jobs (DW)

• Morgan Stanley to lay off several hundred in wealth-management division (WSJ)

CENTRAL BANKS

• ECB's de Guindos says wage growth, corporate margins and geopolitical situation warrant caution before easing rates (Bloomberg)

• BoJ's anticipated end to negative rates faces little political opposition (Bloomberg)

GEOPOLITICS

• Head of the US House China committee will visit Taipei in a show of support for Lai Ching-te (FT)

• Germany ups international pressure on Israel not to attack Rafah (Bloomberg)

• Putin's suggestion of Ukraine ceasefire rejected by United States (Reuters)

• NATO defense chiefs gather to talk Ukraine (Politico)

• Trump adviser proposes new tiered system for NATO members who don't pay up (Reuters)

CHINA

• Developer China South City shares tumble 37% to record low after warning of multiple bond defaults (SCMP)

• Fund managers want Beijing to do more to keep the US$380bn rally in Chinese and Hong Kong stocks going (SCMP)

• MSCI cuts 66 companies from China Index as equities slump (Nikkei)

ECONOMY

• UK inflation unexpectedly held steady in January (Bloomberg)

ASX corporate actions occurring today:

• Trading ex-div: Korvest (KOV) – $0.25, Scentre Group (SCG) – $0.08

• Dividends paid: None

• Listing: None

Economic calendar (AEDT):

• 10:50 am: Japan GDP (Q4)

• 11:30 am: Australia Unemployment Rate (Jan)

• 6:00 pm: UK GDP (Q4)

• 12:30 am: US Retail Sales (Jan)