Morning Wrap: ASX 200 to slip, S&P 500 logs 5-day win streak, Futures fall on US credit rating downgrade

ASX 200 futures are down 8pts (-0.08%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks finished broadly higher, closing out another strong weak of gains

• US futures opened 0.7-0.8% lower on Monday after Moody's downgraded the US' credit score from Aaa to Aa1

• Dicker Data Founder David Dicker announces plans to step down from CEO, Chairman and Director

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher and finished at best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished higher, closing out a third-straight week of gains, with the Nasdaq up more than 7% for the week

• Relatively quiet session, with few major headlines to drive any directional changes

• Markets still buoyed by de-escalation of US-China tariffs plus recent M&A revival (Charter and Cox agreed to US$34.5bn deal), VIX back to pre-Liberation Day levels and US 10-year yield below 4.5% 

• US weekly recap: Nasdaq (+7.15%), S&P 500 (+5.27%), Russell 2000 (+4.46%), Dow (+3.41%)

• Japan 30-year yield nearing record high as BOJ scales back purchases, shining spotlight on US$7.8tn of government debt (BBG)

• China's tech revival halted on weaker-than-expected Alibaba, JD.com and Tencent earnings (BBG)

• Tariffs are falling more quickly than Wall Street analysts expected (YF)

STOCKS

• Amazon's diversified revenues help protect it from trade war (WSJ)

• Nvidia CEO says no evidence of AI chip diversion into China (BBG)

• Applied Materials shares tumble after Q2 forecast fell short of market expectations, citing the potential cost of US-China trade war (BBG)

• Berkshire did not make any major purchases during market slump, instead selling or reducing its holdings in financial stocks (BBG)

CENTRAL BANKS

• Trump calls on Fed for rate cuts, criticises Powell in Truth post (RT)

• ECB's Wunsch says central bank may need to cut rates below 2% (USN)

• ECB's Kazaks says they are now 'relatively close' to terminal rate if the base case for inflation returning to 2% this year materialises (BBG)

• Fed's Bostic sees slower US growth, one Fed rate cut in 2025 (BBG)

• BoJ's Nakamura urges caution on rate hikes amid US tariff threats (RT)

• RBA set to cut rates as cooling inflation and trade tensions weigh on growth (RT)

• Markets dialing back Asia rate cut expectations following US-China trade de-escalation (BBG)

TARIFFS

• Trump says he will set tariff rates for US trading partners 'over the next two to three weeks' due to the lack of capacity to negotiate deals with all partners (BBG)

• US tariffs on China likely to hold at 30% until late 2025, reflecting low expectations for quick trade deal (BBG)

• US and EU have restarted serious trade talks, breaking former impasse to negotiations (FT)

• Trump told Walmart to 'eat the tariffs' after company warned it will have to raise prices (CNBC)

• Canada says most tariffs on US will remain, pushing back on recent Oxford report (BBG)

• Trump says India has offered to cut all its tariffs on US goods (BBG)

• Vietnam steps up talks with US amid impending US tariff of 46% (YF)

ECONOMY

• US credit rating downgraded from Aaa to Aa1 by Moody's, report cited concerns about ballooning debt and deficits that will damage America' standing as a global capital destination and increase borrowing costs (BBG)

• Bessent downplays Moody's downgrade, says its a "lagging indicator" of US fiscal health (BBG)

• Moody's US downgrade more of a warning sign than huge shock, says analysts (BBG)

• Japan Q1 GDP contracted by 0.7%, driven by weaker trade figures and stalling consumer spending (BBG)

ASX TODAY

• Deterra Royalties provides Thacker Pass Lithium Project update, major construction has begun and processing plant area commenced in early 2025 (DRR)

• Dicker Data Founder David Dicker steps down from position as CEO, Chairman and Director to pursue other interests, agreed to enter six-month consultancy agreement (DDR) 

• Gentrack reports 1H25 revenue up 9.8% to $112m, EBITDA up 5.1% to $13m due to investments in sales and technology, statutory NPAT up 34.7% to $7.2m, cash balance jumps to $70.7m vs. $39.3m a year ago (GTK)

• Lendlease sells UK developments assets in 50:50 JV, release of capital brings its total announced or complete capital recycling initiatives to $2.5bn in FY25 vs. target of $2.8bn (LLC)

• New Hope Corp reports Q3 saleable coal production of 2.76Mt, underlying EBITDA down 27% quarter-on-quarter to $155.2m, slightly downgrades FY25 saleable coal production and sales (~2% at the midpoint) due to challenges at the New Acland Mine (NHC)

• Northern Star completes $300m share buyback program, 27.2m shares purchased at average price of $11.04 a share (NST)

WHAT TO WATCH TODAY

• US credit rating downgrade: US futures opened around down 0.7-0.8% as the credit rating downgrade was announced after market close on Friday. Analysts warn that the move could see investors demand higher yields on Treasuries, which leads to inflationary scenarios.

• Gold: Gold spot opened sharply higher on Monday, up around 0.9% to US$3,230, erasing most of its 1.1% dip last Friday.

• Dicker Data: Mr Dicker's leadership transition is a pretty big deal as he owns approximately 47.47% of the company, as at 19 March 2025. This could place downward pressure on the stock today amid leadership and selldown concerns.

BROKER MOVES

• Praemium initiated Buy with $1.00 target (BP)

Stocks trading ex-dividend: 

• Mon 19 May: Alcoa Corporation (AAI) – $0.109, Macquarie Group (MQG) – $3.90, Wam Global (WGB) – $0.065

• Tue 20 May: Sandon Capital Investments (SNC) – $0.014

• 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: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 12:00 pm: China Industrial Production, Retail Sales and Fixed Asset Investment (APR)