Morning Wrap: ASX 200 to rise, S&P 500 flat as yields ease + Myer, Bendigo Bank trading updates

In a nutshell:

• Major US benchmarks finished around breakeven after last minute weakness erased gains

• Bond yields somewhat stabilised, with most yields down 3-6 bps after Thursday's weak 20-year note auction

• Trading updates from Bendigo Bank and Myer

Let's dive in.

S&P 500 SESSION CHART

S&P 500 flat after a last minute selloff (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished around breakeven, closing near session lows after a late selloff

• A relatively stabilisation session, with most US bond yields down 3-6 bps after a weak 20-year note auction on Thursday placed upward pressure on rates and a pullback in equities

• Bond yield backup hit by a myriad of factors including Trump policy uncertainty, deficit concerns, Moody’s US credit rating downgrade, still elevated inflation (hot UK and Canada print this week) plus the market has also priced out more than 50 bps of Fed rate cuts in the last few weeks

• AAII bulls ticked up to 37.7% last week, now exceeding bears (36.7%) for the first time since late January, but does this suggest the sentiment tailwind is now exhausted

• Bond market warns Trump, Congress on dangers that tax bill would add trillions of dollars to already bulging budget deficit (BBG)

• Bitcoin at record high on optimism around US stablecoin regulation (BBG)

• OPEC+ mulls a third straight oil production increase in July, of 411,000 barrels per day or triple the amount initially planned (BBG)

STOCKS

• Nike to raise prices on footwear, apparel and equipment, returning to Amazon after leaving in 2019 (BBG)

• Walmart eliminating ~1,500 jobs on its technology team (BBG)

• AT&T buys consumer fiber operations Lumen for $5.7bn (BBG)

• Amazon shareholders rejected climate-related resolutions at AGM (RT)

• Nestle refocusing on its core business as CEO signals strategic overhaul amid economic pressures (RT)

CENTRAL BANKS

• ECB likely to cut in June but higher euro, energy prices complicate forecasts (BBG)

TARIFFS

• Mexico's Sheinbaum says she discussed steel, aluminum tariffs with Trump (BBG)

• Lutnick predicts numerous trade deals by mid-summer, reiterates tariffs won't raise retail prices (AX)

• G7 ministers try to seek common ground on issues ranging from non-tariff barriers to China's non-market practices (RT)

• US to keep China chip curbs, despite calls from Nvidia CEO to ease restrictions (BBG)

• Trump's Apple threat impacts India's tariff negotiations, leveraging years of investment against China (NYT)

ECONOMY

• US May Manufacturing PMI rose to 52.3, a three-month high, and Services PMI rebounded to 52.1 from April’s 17-month low (RT)

• Trump's tax bill advances toward House vote after clearing a key hurdle (RT)

• Eurozone May Composite PMI contracted to 49.5, as Services PMI fell, despite Manufacturing PMI stabilising at 49.4 (BBG)

• Japan May Manufacturing PMI improved but remained below 50, while Services PMI slowed, signaling private sector contraction (RT)

• New Zealand budget projects wider deficits, unveils tax incentive for businesses (BBG)

• Singapore GDP growth tops expectations, though government flags recession risk amid tariff uncertainty (BBG)

ASX TODAY

• Austin Engineering holder Thorney International increases stake from 19.33% to 20.38% (ANG)

• Bendigo Bank reports Q3 cash NPAT down 8% to $122.2m, net interest margins flat QoQ at 1.87%, CET1 ratio down 34 bps QoQ to 10.83% (BEN)

• Myer issues 2H25 trading update (16 weeks), with total sales up 1.9% to $837.2m and comparable sales up 1.5%, apparel brands sales down 3.9% to $211m (MYR)

• Rio Tinto CEO Jakob Stausholm to step down from the Group later this year, ‘rigorous’ selection process is currently underway (RIO)

WHAT TO WATCH TODAY

• A quiet one: Expect a relatively quiet session as the market digests the recent bond yield backup, further oil weakness on OPEC production hikes and mixed PMIs from the US, UK and Eurozone. Futures are pointing towards a slight bounce after yesterday's -0.45% retreat (but off session lows of -0.95%).

• Bendigo Bank: Q3 at a glance does appear a little soft. Consensus (Feb-25) is forecasting NIMs of 1.92% in the second half and CET1 ratio to close out FY25 at 11.05%, though not sure if these figures are comparable to the Q3 numbers

BROKER MOVES

• Cromwell Property upgraded to Overweight; target remains $0.45 (JPM)

• Insurance Australia Group downgraded to Neutral from Outperform; target up to $8.70 from $8.50 (MQG)

• Wesfarmers retained Buy; target up to $87.3 from $80.40 (GS) 

Stocks trading ex-dividend: 

• Fri 23 May: None

• Mon 26 May: Dalrymple Bay Infrastructure (DBI) – $0.059, Embark Early Education (EVO) – $0.015, Newmont Corporation (NEM) – $0.274,

• Whitefield Industrials (WHF) – $0.105

• Tue 27 May: None

• Wed 28 May: None

• Thu 29 May: 360 Capital Mortgage REIT (TCF) – $0.06, Technology One (TNE) – $0.066

• Fri 30 May: Pengana International Equities (PIA) – $0.014

Other ASX corporate actions today: 

• Dividends paid: Bank of Queensland (BOQ), Healius (HLS), OM Holdings (OMH) 

• Earnings: None

• IPOs: None

• AGMs: Restaurant Brands NZ (RBD)

Economic calendar (AEST):

• 9:30 am: Japan Inflation (Apr)

• 4:00 pm: UK Retail Sales (Apr)