Morning Wrap: ASX 200 to rise, S&P 500 bounces + CSL, SGH and Breville earnings

In a nutshell:

• Major US benchmarks bounced after Friday's selloff, no major drivers for the session

• SGH and Breville Group report decent earnings, CSL misses NPATA and dividend estimates

• Brokers downgrade Ansell and JB Hi-Fi on valuation concerns, despite both companies report clean earnings beats on Monday

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, the gains come after last Friday’s selloff that capped off a second-straight down week for the S&P 500, Nasdaq and Russell 

• No major drivers behind today’s bounce – Slight pullback in bond yields, better inflation data from NY Fed survey

• Market sentiment – AAII bull-bear spread back into negative territory at -9.5% compared to +6.7% average over the life of the survey

• Record retail buying last week, JPMorgan says this typically leads to short-term market outperformance

• Profit projections for Magnificent 7 names continue to fall throughout the quarter (BBG)

• US copper, aluminum, steel prices premiums to London prices surge to highest level in five years (FT)

• Trump's steel and aluminum tariffs rattle metals producers, Australia seeks exemption (RT)

• US dollar strengthens on steel and aluminum tariffs, commodity-linked currencies under pressure (BBG)

STOCKS

• McDonald's (+4.7%) reported a slight revenue miss and in-line earnings, same-store sales growth of 0.4% topped the 1.0% decline expected, US sales see worst drop since pandemic (CNBC)

• US steel stocks including Cleveland Cliffs, Nucor, Alcoa and United State Steel Corp rally 2-12% after Trump tariff (CNBC)

• Lyft to launch robotaxi rides powered by Mobileye technology in Dallas in 2026 (BBG)

• GM, Ford, and Mercedes first to feel impact of China's 10% tariffs as they took effect today (BBG)

• Activist investor Elliott reported to have built stake in BP (FT)

• TSMC says Q1 sales are set to be at the lower end of its forecast range due to earthquakes (BBG)

TRUMP

• 25% tariffs on all steel and aluminum imports; more reciprocal levies to follow soon (BBG)

• Pledges to cut billions of dollars from US defense spending (FT)

• Trump's anti-immigration policies could shave US economic growth, according to Goldman Sachs (BBG)

• China levies retaliatory tariffs on US$14bn worth of US goods (FT)

ECONOMY

• NY Fed Survey of Consumer Expectations showed inflation expectations were unchanged at 3.0% on both 1-year and 3-year horizons – this comes after last Friday’s consumer sentiment report showed a big jump in year-ahead expectations (to 4.3% from prior 3.3%) (BBG)

ASX TODAY

• Breville Group reports 16.1% NPAT growth to $97.5m vs. consensus $97.3m (0.2% beat), macroeconomic uncertainties continue, expects to deliver FY25 EBIT growth between 5-10% (BRG)

• CSL reports 1H25 NPATA growth of 3% to $2.07bn vs. $2.16bn consensus (4.1% miss), interim dividend up 9.2% to $1.30 but below Morgan estimates of $1.35, reaffirms FY guidance (CSL)

• Macquarie says NPAT for nine months to 31 December 2024 broadly in-line with the prior corresponding period (MQG)

• SGH reports 1H25 NPAT up 7% to $508m vs. $466.8m consensus (8.8% beat), interim dividend up 30.4% to 30 cents, reaffirms full-year guidance of high single-digit EBIT growth (SGH)  

• Vulcan Steel reports 1H25 NPAT down 64.8% to NZ$9.2m, interim dividend down 79% to 2.5 cents, notes volumes in New Zealand are anticipated to recover in Q2-3 of CY25 (VSL)

WHAT TO WATCH TODAY

• Day twos: Will be interesting to see how Ansell, JB Hi-Fi and CAR Group trade after their results yesterday. Ansell reported a clean beat (5-10% beat on NPAT, dividend and guidance), shares soared 8.1% to all-time highs but analysts are downgrading on valuation concerns. JB Hi-Fi reported a similar beat (but softer-than-expected GMs), shares rallied as much as 5.5% but faded to a -4.5% close.

• At a glance: CSL 1H25 looks weak on most lines but guidance intact, SGH looks strong and interim dividend implies an above consensus full-year payout, Breville is a slight beat but outlook commentary filled with uncertainties

• Gold: Gold hit another fresh all-time high, crossing US$2,900 for the first time on record. Gold Miners ETF (GDX) soared 2.6% overnight.

BROKER MOVES

A few post results notes coming through – Ansell and JB Hi-Fi both reported solid earnings beats but downgraded due to valuation (hence why the target prices are still going up as analysts upgrade forward earnings expectations).

• Ansell downgraded to Hold from Outperform but target up to $39.20 from $38 (CLSA)

• Ansell downgraded to Neutral from Overweight but target up to $40 from $33 (JPM)

• Austal downgraded to Neutral from Overweight but target up to $3.75 from $3.50 (JPM)

• DigiCo Infrastructure REIT initiated Overweight with $5.20 target (JPM)

• CAR Group downgraded to Sector Perform from Outperform; target cut to $39 from $39.50 (RBC)

• Genesis Minerals downgraded to Neutral from Buy but target up to $3.40 from $3.20 (CITI)

• JB Hi-Fi downgraded to Hold from Buy but target up to $99 from $98 (BP)

Stocks trading ex-dividend: 

• Tue 11 Feb: None

• Wed 12 Feb: ResMed (RMD) – $0.06

• Thu 13 Feb: Korvest (KOV) – $0.25, Plato Income Maximiser (PL8) – $0.006

• Fri 14 Feb: None

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None

• Earnings: Breville Group (BRG), Computershare (CPU), CSL (CSL), Cettire (CTT), SGH (SGH), Seven West Media (SWM), Vulcan Steel (VSL)

• AGMs: None

Economic calendar (AEDT):

• 9:30 am: Westpac Consumer Confidence (Feb)

• 10:30 am: NAB Business Confidence (Jan)

• 1:00 am: Fed Powell Speech