Morning Wrap: ASX 200 to rise, S&P 500 bounces on trade negotiations

In a nutshell:

• US stocks recouped yesterday's losses, with a broad-based bounce

• No major drivers for the bounce, some believe yesterday's selloff was exacerbated by thin liquidity following the long weekend

• Expect a strong session for growth-oriented sectors, and a pullback in soaring gold names

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks recouped most of yesterday’s losses and finished near session highs

• No major drivers behind the bounce attempt, potential drivers include yield stabilisation at the long end and hopes of a near-term trade deal with Japan or India

• Monday’s selloff exacerbated (S&P 500 down 2.36% with more than 90% of constituents red) by thin liquidity due to long Easter weekend

• ‘Sell America’ trade back in the headlines, with various reports highlighting nearly US$5tn in value erased from the S&P 500 since April tariff announcement, Dow headed for worst April since Great Depression, three-year lows for dollar index, worst ever start for stocks under new Presidential term and over 20 fresh highs for gold so far this year

• US bond funds suffer fifth straight week of outflows amid tariff, stagflation concerns (RT)

• Bearish US dollar bets move to levels that could trigger a rebound (BBG)

• China’s patriots are buying stocks, with 'national team' and private investors in sync to support market (RT)

STOCKS

• 3M topped first-quarter revenue and earnings expectations, reaffirmed its full-year guidance despite acknowledging potential 40 cents per share impact from tariffs (BBG)

• RTX flags potential $850m hit from tariffs (FP)

• Swiss pharma giant Roche pledges to invest €47 billion in the US (EN)

• Anthropic expects AI-powered virtual employees to begin running corporate networks in the next year (AX)

• Novo Nordisk stock slumps due to concerns Eli Lilly weight-loss pill will eat into its market share (BBG)

CENTRAL BANKS

• Kashkari says Fed's independence 'foundational' to better economic outcomes (RT)

• BoE's Greene suggests that quantitative easing could be used in a smaller and more tailored way in the future (BBG)

• BoE's Greene says US tariffs likely to put downward pressure on UK inflation (BBG)

• Trump's campaign against Powell signals he will pin blame on Fed for any downturn as a result of tariffs (AX)

TARIFFS

• Treasury Secretary Bessent says a tariff standoff with China is unsustainable and expects the situation with Beijing to de-escalate (BBG)

• White House closing in on general agreements with Japan and India, but full details could take months to hammer out (PO)

• Citi expects higher effect of tariffs on growth in second half, puts recession odds close to 45% (RT)

• VP Vance greets PM Modi in India as White House hails significant progress in trade talks (BBG)

• US imposes new tariffs on solar imports from SE Asian nations (BBG)

ECONOMY

• IMF’s April World Economic Outlook cuts US growth forecasts by 0.9pp to 1.8% for 2025 and marked down 2026 growth by 0.4pp to 1.7% (FT)

ASX TODAY

• Quarterly production reports from names including Paladin Energy, Aurelia Metals, Metals X and more

• De Grey Mining shares to be suspended close of trading 23-Apr after court approval of Northern Star takeover (DEG)

• EnviroSuite receives revised non-bonding offer price of $0.10 (previously $0.09) from Ideagen (EVS)

• SelfWealth shareholders vote 88.46% in favour of scheme to be acquired by Svava at $0.28 cash-per share (SWF)

• Telix Pharma reports 1Q25 revenue growth of 62% to $186m, reaffirms full-year revenue guidance of $779-800m (TLX)

WHAT TO WATCH TODAY

• Big bounce: A strong overnight session, with pretty much all sectors higher except gold (GDX down 2.7%). Some of the best performing overnight sectoral ETFs include Fintech (+4.1%), Homebuilders (+3.8%) and Biotech (+2.8%). A name like Zip sold off sharply yesterday (-9.0%) and likely to see some bounce-like action today.

• Commonwealth Bank: CBA experienced some extraordinary price action yesterday after closing 4.1% higher from a -0.9% open. Its V-shaped move from $$140 to $168 has pushed its PE ratio back to ~28x. It'll be interesting to see where it goes from here.

BROKER MOVES

No major overnight broker moves.

Stocks trading ex-dividend: 

• Wed 23 Apr: Steamships Trading Company (SST) – $0.104

• Thu 24 Apr: Spheria Emerging Companies (SEC) – $0.035

• Fri 25 Apr: None

Other ASX corporate actions today: 

• Dividends paid: Latitude Group (LFS), Kelsian Group (KLS), Woolworths (WOW)

• Listing: None 

• Earnings: None

• AGMs: None

Economic calendar (AEST):

• 9:00 am: Australia Manufacturing and Services PMI (APR)

• 5:30 pm: German Manufacturing and Services PMI (APR)

• 6:30 pm: UK Manufacturing and Services PMI (APR)

• 11:45 pm: US Manufacturing and Services PMI (APR)