Morning Wrap: ASX 200 to rise, S&P 500 higher on US-China trade hopes, Newmont Q1 earnings surge

In a nutshell:

• US stocks rallied after Trump said tariffs on China could be reduced significantly if the two countries can reach an agreement

• Tesla shares gained 5.3% despite reporting a sharp 20% drop in auto revenues and 40% tumble in earnings

• ResMed reports an unexpectedly strong improvement in Q3 gross margins, Newmont Q1 earnings come in well-above analyst forecasts

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher but well off opening levels (Source: TradingView)

OVERNIGHT MARKETS

• US stocks log second-straight day of gains but finished off best levels

• S&P 500 up 1.67% but well-off the 3.44% rally it hit in early trade

• Global equity markets boosted by comments from Trump – no intention of firing Fed Chair Powell also signalled easing China tariffs if the two sides reach an agreement

• Markets continue to look favourably at any trade off-ramps, albeit most are very light on details 

• Short covering helped accelerate gains in the last two sessions (CNBC)

STOCKS

• Tesla Q1 results miss but widely expected, auto revenues down 20% year-on-year and earnings down 40% amid softer vehicle delivers, lower selling prices and foreign exchange drags (BBG)

• Kering reports larger-than-expected 14% sales drop in Q1 as Gucci sales slide further (YF)

• Intel set to announce it will reduce headcount by more than 20% in bid to eliminate bureaucracy (BBG)

• ByteDance, Alibaba and Tencent rushed to stockpile billions of dollars of Nvidia chips before US export controls (NK)

• SAP Q1 operating income jumped 58%, fuelled by its pivot to cloud services, reaffirmed cloud revenue guidance (BBG)

CENTRAL BANKS

• Trump says he has no intention of firing Fed Chair Powell (BBG)

• Fed Governor Kugler warns of inflationary impact from tariffs, sees larger effect on economy than previously expected (BBG)

• Richmond Fed's Barkin says economy stable but consumer spending a worry amid pickup in inflation concerns (BBG)

TARIFFS

• Trump signals tariffs on China could come down significantly if two sides reach an agreement (BBG)

• No unilateral offer to cut China tariffs, agreement must be mutual, says Bessent (BBG)

• Beijing willing to discuss tariffs with the US but not under duress, says China foreign minister (WSJ)

• UK is in no hurry to secure US deal on tariffs, says Chancellor of the Exchequer Reeves (NYT)

• CEOs of Walmart, Target and Home Depot privately warned Trump his trade policy could quickly disrupt supply chains, raise prices and empty shelves (AX)

ECONOMY

• US April Composite PMI at 51.2, a 16-month low and below 51.5 consensus, business year ahead expectations dropped to lowest level since the pandemic and new business inflows into services showed second smallest gain over the past 11 months (RT)

• Eurozone April Composite PMI at 50.1, down from 50.9 in March, largely due to weakness in surprise weakness from Germany and France services sector (BBG)

ASX TODAY

• BHP prepares search for its next CEO in coming months (BBG)

• Leo Lithium strategic update highlights focus to acquire a lithium asset and seek re-quotation on the ASX (LLL)

• Newmont reports Q1 EPS of $1.25 ex-items vs. $0.92 consensus (35.8% beat), attributable gold production of 1.54moz in-line, on-track to meet full-year production and cost guidance (NEM)

• Praemium reports Q3 funds under administration of $62.33bn, up 0.5% quarter-on-quarter (PPS)

• ResMed reports Q3 EPS up 11.2% to $2.37 vs. $2.40 consensus, non-GAAP gross margin of 59.9% vs. 59.4% consensus (RMD)

• Vicinity CEO Peter Huddle discloses sale of ~625,000 shares to finance tax obligations, beneficially owns 1.2m shares after the transaction (VCX)

WHAT TO WATCH TODAY

• ResMed: Q3 numbers largely in-line with market expectations but sizeable gross margin beat (50 bps ahead of consensus). Quarterly dividend of 53 US cents per share a slight miss vs. 54 cents consensus. Overall, the margin beat should offset any areas of weakness.

• Newmont: Crushed Q1 earnings expectations by ~35%, showcasing how gold miners are in their money-printing era (although this is largely priced in following recent share price run). The beat suggests analyst gold price and earnings assumptions may be too low. No news of accelerated buyback.

BROKER MOVES

• AMP upgraded to Outperform from Neutral but target cut to $1.34 from $1.64 (MQG)

Stocks trading ex-dividend: 

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

• Fri 25 Apr: Market closed

• Mon 28 Apr: None

• 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: 360 Capital REIT (TOT), Clover Corp (CLV), Comms Group (CCG), Horizon Oil (HZN), Nine Entertainment Co. (NEC), Ridley Corp (RIC), and Shine Justice (SHJ)

• Listing: None 

• Earnings: Coronado Global (CRN)

• AGMs: None

Economic calendar (AEST):

• 10:30 pm: US Durable Goods Orders (MAR)