Morning Wrap: ASX 200 to rise, S&P 500 claws back early losses, Northern Star downgrades guidance

ASX 200 futures are up 17pts (+0.21%) as of 8:30 am AEST.

In a nutshell:

• A relatively uneventful overnight session but US benchmarks managed to close mostly higher after a wobbly start

• No major tariff/trade deal breakthroughs, but corporate commentary and analysts flag hefty repercussions

• Northern Star's March quarter report flags lower-than-expected production and a full-year guidance downgrade

Let's dive in.

S&P 500 SESSION CHART

S&P 500 flat but well off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• US benchmarks clawed back early losses to close around breakeven

• Decent breadth, with the Equal-weight S&P 500 outperforming the official benchmark by 22 bps and 8/11 sectors highers

• No major directional drivers for the overnight session, markets in waiting mode for key earnings and macro data later this week 

• Market sentiment remains extremely depressed – AAII bull-bear spread at -34% and below -30% for eight of the last nine weeks, with Jefferies noting this is the only time in history (going back to 1987) of such depressed and extended pessimism

• Most analysts expect S&P 500 to remain rangebound with little upside until a deal is struck with China

• Nvidia and other AI plays underperformed overnight, with the main downward driver being Huawei’s new AI processor that may displace some higher-end products (WSJ)

• Companies across the board ramp up cost-cutting measures to counter tariff impact but not resorting to job cuts yet (WSJ)

STOCKS

• Porsche expects its profit margin to fall as low as 6.5% due to US tariffs and higher costs from weak EV adoption (BBG)

• IBM says it will invest $150 billion in the U.S. over 5 years (QTZ)

• Deliveroo suspends share buyback after $3.6bn offer from US rival Doordash (RT)

CENTRAL BANKS

• BOJ to keep rates on hold at 0.5% this week, attention on economic forecast downgrades (BBG)

TARIFFS

• Bessent says it is up to China to de-escalate trade tension with US (CNBC)

• Bessent believes a China trade deal may take months, but a quicker de-escalation and agreements in principle are possible (AX)

• Demand plunge, supply shock expected as importers hold off on shipping goods to America amid US-China tensions (FT)

• Chinese manufacturers pausing production and turning to new markets (CNBC)

• Chinese retailer Temu passing on nearly all of Trump's new import taxes to US consumers, more than doubling prices (BBG)

• South Korea finance minister says tariff talks with US help ease uncertainties but will approach talks cautiously (RT)

ECONOMY

• Beijing announced policies to support exporters, including loan assistance and domestic consumption boosts (BBG)

• China's state planner expresses confidence in achieving a 5% GDP growth target for 2025 (RT)

• Cargo shipments from China to US have plummeted by as much as 60% since early April, and thousands of companies will soon need to replenish inventories (BBG)

ASX TODAY

• Betr Entertainment buys up 19.9% stake in PointsBet (PBH)

• Fortescue reports Q3 iron ore shipments of 46.1Mt, marginally ahead of 45.9Mt consensus, FY25 guidance unchanged (FMG)

• Mondaelphous to acquire High Energy Service for $21.5m (MND)

• Northern Star reports Q3 production of 388.4koz (vs. 415.3koz consensus or 6.5% miss), AISC of A$2,246/oz (vs. $2,089/oz consensus or 7.5% higher-than-expected), revised full-year guidance to 1,630-1,660koz or a 4.6% miss at the midpoint vs. 1,725koz consensus (NST)

• Stanmore Resources reports Q1 ROM coal production of 4.3Mt, in-line with consensus, reiterates FY25 saleable production guidance and lowers cost forecasts to $85-90 a tonne vs. prior $89-94 (SMR)

• Sayona Mining reports Q3 NAL production of 43.2kdmt and $31m revenue (vs. $70m a quarter ago), reaffirms FY25 guidance of 190-210kdmt (SYA)

• Woodside in talks with Kuwait firm to sell a stake in its proposed US LNG project (BBG)

WHAT TO WATCH TODAY

• Not a whole lot: Expect today to be a relatively quiet session. The positive breadth and sector performance overnight should favour the S&P/ASX 200 and buoy sectors like Utilities, Real Estate and Energy. Plenty of macro catalysts later this week, including Australia inflation (Wed), US and Europe GDP flash (Wed), US PCE (Thu) and US unemployment data (Fri).

• Northern Star: Pretty weak quarterly driven by a broad range of challenges including a delay in KCGM grade uplift, higher maintenance costs and higher royalties from elevated gold prices. You've got a broad miss for both production and costs for both the March quarter and full year guidance. This should place downward pressure on NST today, especially given the recent run up and how several analysts view the stock as their preferred gold exposure.

BROKER MOVES

• Amcor upgraded to Overweight from Equal-weight; target up to $20.31 from $16 (MS)

• Gold Road Resources downgraded to Hold from Buy but target up to $3.25 from $3.20 (BP)

• Pantoro downgraded to Sell from Hold; target cut to $2.30 from $2.40 (BP)

Stocks trading ex-dividend: 

• Tue 29 Apr: Acrow (ACF) – $0.029, Red Hill Minerals (RHI) – $0.03, Tasmea (TEA) – $0.05

• Wed 30 Apr: Bank of Queensland (BOQ) – $0.18

• Thu 1 May: Om Holdings (OMH) – $0.004, Pengana Global Private Credit Trust (PCX) – $0.012, Wam Strategic Value (WAR) – $0.03

• Fri 2 May: None

Other ASX corporate actions today: 

• Dividends paid: Gowing Bros (GOW), Turners Automotive (TRA)

• Listing: None 

• Earnings: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.