Morning Wrap: ASX 200 to rise, S&P 500 higher on Mag-7 bounce, global PMIs gain momentum

In a nutshell:

• US stocks continued to march higher, with the S&P 500 and Nasdaq touching a fresh two-week high

• PMI data from Australia, Europe, the UK and US surprised to the upside as strong services offset mixed manufacturing activity

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, finished near session highs (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks broadly higher and finished near best levels

• S&P 500 now ~6% off February record high

• Breadth was better, with the Equal-weight S&P 500 up 1.06% (as opposed to Friday where it was -0.67% vs. official benchmark’s +0.37%)

• Market supported by wave of better-than-expected PMI data from Australia, Germany, UK and the US

• Trump’s 2-April tariff announcement remains an overhang but reportedly will be narrower than initially planned, excluding some nations and sectoral-specific tariffs

• Market positioning has normalised – Deutsche Bank says overall equity positioning is now modestly underweight after sliding sharply over the last three weeks, multiple firms have highlighted strong pace of retail buying with last week's inflow into US equities the highest of the year 

• Wall Street's "American exceptionalism" trade has been shattered in recent weeks on fallout of Trump's policies (FT )

• Falling stock markets and policy uncertainty hinder M&A and IPO activity, prompting a reassessment by dealmakers (FT )

STOCKS

• BYD 2024 sales hit $100bn, beating Tesla's revenue (BBG)

• Hyundai reportedly is set to invest US$20bn in US manufacturing (YH)

• Elliott builds significant stake in Sumitomo Realty & Development (BBG)

• Elliott discloses nearly 5% stake in RW, Germany's biggest utility company (RT)

CENTRAL BANKS

• BOJ's Ueda repeats rates hikes to continue, Finance Minister Kato says Japan yet to beat deflation (RT)

TRADE & GEOPOLITICS

• White House pursuing narrower tariff agenda for 2-Apr, omitting industry-specific tariffs and applying reciprocal tariffs on group of countries that account for bulk of foreign trade with US (link)

• Trump says he will seek 25% tariff on countries purchasing oil and gas from Venezuela (BBG)

• Trump says he will very soon announce tariffs on autos, pharmaceuticals, and aluminum (RT)

• Representatives from EU, India among those in talks this week with Trump administration ahead of 2-Apr tariff deadline (BBG)

• Significant gaps between Russia and Ukraine could delay a ceasefire agreement (BBG)

ECONOMY

• US March PMIs hit a three-month high of 53.5 ahead of 51.7 consensus, as strong services PMI offset weak manufacturing activity (RT)

• Eurozone March PMI expand at fastest pace in seven months at 50.4, showing economic resilience with manufacturing revival (RT)

• UK March PMIs hit six month high as strong services sector offset sharp drop in manufacturing activity (BBG)

• Japan flash PMIs weaken, service sector falls into contraction amid cost pressures (Reuters)

ASX TODAY

• Gold Road Resources rejects Gold Fields’ offer of $3.05 per share or a 24% premium to its last close (GOR)

  • Note: This was announced as the market closed on Monday

• Sovereign Metals confirms media speculation to raise $40m via a placement at 85 cents per share to fund Kasiya Rutile Graphite Project’s development costs (SVM)

WHAT TO WATCH TODAY

• Signs of life: Stocks continue to show signs of bottoming. Breadth was better overnight and the S&P 500 popped back up to a two-week high and traded above its 20-day moving average for the first time since 20-Feb. Most sectors were higher overnight, notably Airlines (3.3%), Semis (+2.9%), Fintech (+2.6%), Copper Miners (+1.8%) and Uranium (+1.5%). Let's see if the ASX 200 can follow, and reclaim some key levels like the 20-day and 8,000.

• Gold Road, Helia: GOR rejected a 24% premium bid right as the market closed on Monday. It will be interesting to see how the stock trades after such a swift rejection of a decent premium. HLI nosedived 25% on Monday after the company said CBA has entered into exclusive negotiations with an alternative provider of mortgage insurance. CBA accounted for 44% of the company's gross written premiums in FY24.

BROKER MOVES

• Helia Group upgraded to Neutral from Underperform but target cut to $3.55 from $4.20 (MQG)

• James Hardie downgraded to Neutral from Outperform; target cut to $44 from $65 (JHX)

• James Hardie upgraded to Overweight from Neutral but target cut to $45 from $53.50 (JARD)

Stocks trading ex-dividend: 

• Tue 25 Mar: Adrad (AHL) – $0.014, Cash Converters International (CCV) – $0.01, Civmec (CVL) – $0.025, Mader Group (MAD) – $0.04, Southern Cross Electrical Engineering (SXE) – $0.025

• Wed 26 Mar: Flight Centre (FLT) – $0.11

• Thu 27 Mar: Australian Clinical Labs (ACL) – $0.035, Eagers Automotive (APE) – $0.50, Ipd Group (IPG) – $0.064, Maas Group (MGH) – $0.035, Salter Brothers Emerging Companies (SB2) – $0.02, Wiseway Group (WWG) – $0.004

• Fri 28 Mar: Bravura Solutions (BVS) – $0.105, Centuria Industrial REIT (CIP) – $0.041, Centuria Office REIT (COF) – $0.025, Charter Hall Long Wale REIT (CLW) – $0.063, Comms Group (CCG) – $0.001, Dexus Convenience Retail REIT (DXC) – $0.051, Dexus Industria REIT (DXI) – $0.041, Garda Property Group (GDF) – $0.018, Rural Funds Group (RFF) – $0.029

Other ASX corporate actions today: 

• Dividends paid: BlueScope Steel (BSL), Deterra Royalties (DRR), GR Engineering Services (GNG), Meridian Energy (MEZ), and Redox (RDX)

• Listing: None

• Earnings: None

• AGMs: None

Economic calendar (AEDT):

No major economic announcements.