Morning Wrap: ASX 200 to rise, S&P 500 snaps six-day win streak + Catapult, James Hardie earnings

ASX 200 futures are up 52pts (+0.62%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks traded broadly lower in a relatively quiet and uneventful session

• Closely watched Home Depot earnings provided mixed takeaways, with reaffirmed guidance easing tariff and consumer concerns

• The market is now expecting a ~66% likelihood three RBA rate cuts by year end

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower but off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly lower in a relatively quiet and somewhat rangebound session

• No major directional drivers in play, with mixed Home Depot results and no new trade deal developments ahead of this week’s G7 meeting

• Investors see no major threat from Moody's downgrade, citing strong earnings, Fed Model, US-China tariff truce (BBG)

• Option traders boost bearish US dollar bets, pessimism levels at the most negative level on record (BBG)

• Dip-buying lifted US stocks on Tuesday, but options market signaling uncertainty about Big Tech (BBG)

• Longer-term Japan bonds plunge, highlighting structural challenges in Japan's debt market and concerns over rising government spending (BBG)

• US fund managers rotated out of China tech in the March quarter (NK)

STOCKS

• Home Depot reports revenue beat but EPS soft, reaffirmed FY26 guidance – easing tariff and consumer concerns – blamed weak February performance on weather, says homeowners continue to face rate headwinds, deferring larger projects for now (BBG) 

• Google launches Google AI Ultra tier priced at $249.99 a month (CNBC)

• Alphabet investors hope this week's developer conference will help restore confidence in its web search dominance (BBG)

• Chinese shipments of Apple's iPhone and other mobile devices to US plunge to lowest levels since 2011 (BBG)

• General Motors will cease shipping vehicles to China from the US (CNBC)

CENTRAL BANKS

• Fed officials continues to stress patience, some officials see holding rates until September (BBG)

• RBA cuts rates by 25 bps to 3.85%, a two-year low (BBG)

• China banks cut key deposit rates by 15-25 bps, affecting over 300 trillion yuan of deposits (BBG)

TARIFFS

• LA port head predicts no surge in imports post-tariff truce between the US and China (SCMP)

• US Treasury does not expect trade deal announcements at G7 finance leaders meeting unless aligns with US interests (RT)

• India discussing multi-phase trade deal with US, interim agreement expected before July (BBG)

• China is enhancing ties with EU business groups, offering access to policymakers amid US tariff pressures (BBG)

ECONOMY

• Canadian inflation eased to 1.7% in April, the lowest since Sep-24 but above market expectations of 1.6%; core inflation accelerated to 3.2%, up from 2.9% in March (BBG)

ASX TODAY

• Adriatic Metals in early takeover talks with Dundee Precious Metals, a Toronto-listed silver producer (ADT) 

• Catapult reports full-year net loss of $8.8m vs. consensus expectations of a $13m loss, management note strong ACV, low churn and improvement in margins for FY26 (CAT)

• James Hardie reports full-year results, with revenues down 1% to $3.87bn and EPS down 7% to $1.49, both broadly in-line with UBS estimates (JHX)

• MinRes updates Onslow Iron Project mineral resource estimate, up 89% to 744m tonnes at 56.3% Fe (MIN)

• Santos likely to move ahead with Narrabri gas development as Native Title Tribunal ruling notes ‘net public benefit’ outweighed climate concerns, if supply goes entirely to the domestic market (AFR) 

• SGH reaffirms FY25 EBIT guidance for high single-digit year-on-year growth, consensus is currently sitting at 13.2% and Macquarie sees room for a potential upgrade later on (SGH)

WHAT TO WATCH TODAY

• Gold: Gold spot prices rallied 1.87% overnight to US$3,295, driving a strong response for miners (GDX +3.11%).

• Aussie yields: The local 10-year yield eased 8 bps on Tuesday, down to 4.39%. Traders are now pricing in a ~66% chance of a third rate cut by year end. "We expect the RBA to cut again in August, November, and February next year taking the cash rate to 3.1%. There is now close to a 50% probability of another cut as early as July though,” noted AMP’s Shane Oliver.

BROKER MOVES

• Charter Hall Long WALE REIT upgraded to Buy from Neutral; target up to $4.40 from $4.0 (CITI)

Stocks trading ex-dividend: 

• Wed 21 May: Amcor (AMC) – $0.20

• Thu 22 May: Aristocrat Leisure (ALL) – $0.44, Orica (ORI) – $0.25

• Fri 23 May: None

Other ASX corporate actions today: 

• Dividends paid: None

• Earnings: Catapult (CAT), Nufarm (NUF), Web Travel Group (WEB)

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 9:50 am: Japan Balance of Trade (Apr)

• 4:00 pm: UK Inflation (Apr)