Morning Wrap: ASX 200 to rise, S&P 500 posts longest win streak in 20 years + Westpac 1H25 earnings

ASX 200 futures are up 32pts (+0.38%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks continued to trend higher, with the S&P 500 logging its 9th straight gain and recouping the entirety of its recent drawdown

• Stocks boosted by US-China trade optimism and a solid US jobs report

• Westpac reports its 1H25 results, with most key metrics falling short of analyst expectations

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gaps up, trends higher to close near best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks trended higher to finish near best levels

• S&P 500 recorded its 9th straight gain,up 10.2% over this period and now marginally above pre-Liberation Day levels

• US weekly recap: Nasdaq (+3.42%), Russell 2000 (+3.22%), Dow (+3.00%), S&P 500 (+2.92%)

• Markets broadly higher on better-than-expected US jobs data and China considering a response to recent US initiation of trade talks

• Apple and Amazon somewhat disappointed but results and guidance largely intact and still a fairly positive spin for Q1 earnings season

• Mag 7 earnings takeaways so far show AI powering cloud, but tariffs hitting consumer electronics (RT)

• Investors should expect more market-friendly Trump, with recession fears easing on solid jobs report, says BofA (BBG)

• Big tech earnings have so far dodged worst-case-scenario fears (BBG)

• Eight OPEC+ countries to accelerate easing voluntary cuts, will return ~411K bpd to the market in June (OPEC)

EARNINGS

• 72% of S&P 500 companies have reported for Q1

• Blended earnings growth rate of 12.8% vs. market expectations of 7.2%

• 72% have beaten consensus EPS expectations, below the 77% one-year and five-year averages of 77%

• 62% have topped consensus sales expectations, better than the 61% one-year average but below the five-year average of 69%

STOCKS

• Amazon Q1 revenue and EPS beat estimates by 0.4% and 16.9% respectively, AWS revenue up 17% but slightly softer than expected, solid advertising revenues, but weaker-than-expected Q2 guidance due to tariff concerns drove the stock lower (BBG)

• Apple Q1 revenue up 5% to $95.4bn (0.95% beat) and EPS up 8% to $1.65 (1.2% beat), iPhone sales ticked 2% higher to $46.8bn or slightly ahead of expectations, China sales were better-than-feared, announced $100bn share buyback (BBG)

• Berkshire Hathaway flags disaster, FX impacts on insurance business, sees cash position grow to US$348bn (RT)

• Warren Buffett to step down as Berkshire CEO at year's end (CNBC)

• Airbnb issues weak Q2 outlook, citing economic uncertainties affecting travel demand (BBG)

• Shell sticking to its plans for investor returns and capital spending despite oil price drop (BBG)

• Reddit Q1 revenue and earnings beat, guidance above forecasts due to increased advertising revenue (CNBC)

TARIFFS

• China considered trade talks with the US after US sent messages hoping to start trade talks (BBG)

• China has quietly exempted some US goods, likely to cover ~US$40bn of imports (or ~24% of Chinese imports from the US) (BBG)

• Third-party Amazon sellers build inventory to avoid tariff impact but likely have to hike prices soon (RT)

• Apple plans for most devices shipped to the US in June to come from India and Vietnam to mitigate tariff impacts (BBG)

• Japan aims to accelerate US trade talks from mid-May, Treasuries among cards it holds (BBG)

• EU's trade commissioner sees progress towards trade deal, offers to boost US imports by €50B (MS)

ECONOMY

• US nonfarm payrolls grew 177,000 month-on-month vs. ~130,000 consensus, unemployment rate unchanged at 4.2%, in-line with expectations (BBG)

• Eurozone inflation unchanged at 2.2% in April, missing expectations for a move lower (RT)

• South Korea inflation unchanged, leaving BOK rate cut expectations intact (BBG)

ASX TODAY

• Gold Road remains in active discussions with Gold Fields regarding a proposed transaction (GOR)

• Motorcycle Holdings COO Michael Poynton offloads ~891,000 shares, beneficially owns 5.8m shares after the transactions, sale undertaken for personal property purchase (MTO)

• SmartPay receives revised non-binding indicative proposal at NZ$1.20 (A$1.12) per share from an ‘international strategic party’, previous offer on 18-Mar was NZ$1.00 (SMP)

• Westpac reports 1H25 NPAT of $3.46bn (ex-items) vs. $3.51bn consensus, EPS of $1.01 vs. UBSe $1.03, interim dividend of 76 cps vs. UBSe 82 cps, Group NIM of 1.88% vs. UBSe 1.94% (WBC)

WHAT TO WATCH TODAY

• Westpac: At a glance, the numbers appear slightly softer-than-expected. The most important metrics – dividend and NIM – missed UBS estimates by 7.3% and 3.0% respectively. This could place some downward on Westpac and/or the broader banking sector.

• Buoyant markets: Yet another strong overnight session, with every US sector higher and strong breadth. Some of the best performing sector include Airlines (JETS ETF up 4.7% to a one-month high) Resources (BHP ADRs up 2.3%) and Uranium (URA ETF up 2.0% to a near three-month high).

BROKER MOVES

• Helia Group downgraded to Underperform from Neutral; target cut to $3.25 from $3.55 (MQG)

Stocks trading ex-dividend: 

• Mon 5 May: Acorn Capital Investment Fund (ACQ) – $0.028, Qualitas Real Estate Fund (QRI) – $0.01

• Tue 6 May: None

• Wed 7 May: Resmed (RMD) – $0.058

• Thu 8 May: Future Generation Australia (FGG) – $0.037

• Fri 9 May: None

Other ASX corporate actions today: 

• Dividends paid: Elanor Commercial Property Fund (ECF)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.