Morning Wrap: ASX 200 to rise, S&P 500 sets fresh all-time high

ASX 200 futures are up 29pts (+0.34%) as of 8:30 am AEDT.

In a nutshell:

• A last minute rally pushed the S&P 500 to record levels and above 6,100 for the first time on record

• Breath was positive, all US sectors finished green and more than two-thirds of S&P constituents were higher

• Relatively quiet morning so far for the ASX, strong breadth likely a theme today as well as small cap quarterlies

Let's dive in.

S&P 500 SESSION CHART

S&P 500 at all-time highs after a last minute rally (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks higher, finished at best levels after a late rally

• S&P 500 set its first fresh all-time high since 6-Dec, closing above 6,100 for the first time on record

• Breadth was positive after breaking a six-session streak of days where more than two-thirds of S&P constituents were higher

• Overall, a relatively uneventful session ahead of Big Tech results next week and market seeking further clarification on Trump tariffs

• US equities to see US$1tn of corporate demand in 2025, representing the largest year on record for buybacks, according to Goldman Sachs

• Mag-7 earnings due next week,with analysts expecting Q4 earnings to rise 21.7% year-on-year vs. 9.7% growth for the remaining 493 S&P 500 companies

• CTAs cut long positions to lowest since August, aggregate positioning at two-month low (BBG)

• Japan retail investors' appetite for foreign equities keeping yen gains in check (BBG)

STOCKS

• American Airlines shares dip 8% after the company issued a disappointing Q1 outlook (CNBC)

• US firms in China increasingly worried about deteriorating bilateral relations (RT)

• CNN announces job cuts to 6% of workforce as it pivots its focus to streaming (BBG)

• Red Bull reports record profit for 2024 but revenue growth slowed to lowest since 2020 (BBG)

• Fortescue iron ore exports rise 1%, fueling supply glut concerns amid waning China demand (BBG)

• Honda and Nissan exploring merger to address rapidly declining performance in China market (RT)

CENTRAL BANKS

• Fed signals extended rate pause as Trump's policies loom, PIMCO says (FT)

• ECB rate cut bets surge, traders eye potential 50 bp cut by June (BBG)

• Norway Central bank holds rates steady, signals March cut despite global uncertainties (BBG)

• BOJ expected to hike interest rates by 25 bp Friday, Ueda's comments on rate path another focus (BBG)

TRUMP

• Trump threatens Russia and other countries with tariffs and sanctions if Putin doesn't agree to Ukraine deal (RT)

• Trump calls on OPEC+ and Saudi Arabia to lower oil prices; demands US interest rates drop immediately (BBG)

• Trump speaks virtually to the 2025 World Economic Forum in Davos but added little substance to help clarify current tariff issue (RT)

• Saudi Arabia pledges US$600bn investment in US, eyeing Trump's economic reforms (BBG)

• Republican leaders considering big debt-and-funding deal with Democrats (PL)

• US military preparing to send 1,500 troops to assist with border security (RT)

ECONOMY

• UK consumer confidence hits new low, nearly half of Britons expect economy to worsen (BBG)

• South Korea GDP growth up just 0.1% in Q4, with consumption weakening amid political turmoil (BBG)

• Japan export and import growth slows amid weak yen and Trump policy uncertainty (BBG)

ASX TODAY

• Earlypay aware that 21.4% shareholder COG Financial Services intends to sell its stake, hires corporate adviser to seek bids for the entire company (AFR)

• KMD Brands reports 2.5% drop in Group sales for the first five months of FY25, expects 1H25 EBITDA between $1-3m vs. $15.1m a year ago (KMD)

• Michael Hill guides to 1H25 comparable EBIT of $22.5-24m vs. $31.3m a year ago and $31.9m consensus, gross margin of 61-61.5% vs. 61.5% a year ago (MHJ)

WHAT TO WATCH TODAY

Relatively quiet overnight session and morning so far. Solid lead in (especially after the last minute rally for US stocks), with strong breadth a likely theme for us today. Most of the above overnight ETFs were up/down 1%. Uranium was once again, another bright spot, with the Global X Uranium ETF up 2.0% (now up 13% in the last four sessions).

BROKER MOVES

• Ampol upgraded to Buy from Neutral; but target cut to $32 from $32.30 (GS)

Stocks trading ex-dividend: 

• Fri 24 Jan: Alternative Investment Trust (AIQ) – $0.042, Myer (MYR) – $0.025

• Mon 27 Jan: None

• Tue 28 Jan: None

• Wed 29 Jan: None

• Thu 30 Jan: Djerriwarrh Investments (DJW) – $0.072

Other ASX corporate actions today: 

• Dividends paid: 360 Capital Group (TGP), 360 Capital REIT (TOT), Elders (ELD)

• Listing: None

• Earnings: None

• AGMs: None

Economic calendar (AEDT):

• 9:30 am: Japan Inflation Rate (DEC)

• 1:00 pm: BoJ Interest Rate Decision

• 6:30 pm: Germany Manufacturing and Services PMI (JAN)

• 7:30 pm: UK Manufacturing and Services PMI (JAN)