Morning Wrap: ASX 200 to slip, S&P 500 struggles despite strong bank earnings, Oil prices tumble

ASX 200 futures are down 15pts (-0.18%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks higher, but struggled to hold on to intraday highs

• Russell 2000 (+0.86%) closed at fresh all-time highs

• Oil prices dipped ~3% as Trump comments eased concerns of a near-term US strike on Iran

• Solid earnings from TSMC (Q4 beat and 1Q26 guidance beat), Goldman Sachs and Morgan Stanley both rallied on strong investment banking and market revenues

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher but faded early gains (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks higher but off best levels

• S&P 500 (+0.26%) struggled to hold on to intraday highs of 0.76%, closed at session lows

• Russell 2000 logged a second consecutive all-time high

• Breadth still relatively positive, with strength seen across select defensives and Equal-weight S&P 500

• Oil prices dip and end a five-day streak of gains as Trump comment eases fears of near-term US strike on Tehran (RT)

• Bessent offers support for Korean won after currency fell towards lowest since 2009 (BBG)

• China tightens margin financing to curb tech-sector speculation (BBG)

STOCKS

• TSMC Q4 profit up 35%, operating margins 300 bps ahead of consensus, annual revenue above US$100bn for the first time, Q1 guidance ahead of consensus (RT)

• ASML shares hit all-time highs, market cap tops US$500bn thanks to stronger‑than‑expected TSMC outlook (BBG)

• Goldman Sachs shares rally ~4% to all-time highs on broad Q4 earnings beat, global banking and market revenues at record highs, investment banking backlog at four-year high (BBG)

• Morgan Stanley shares rally ~6% to record highs, Q4 revenue and EPS beat thanks to investment banking fees (BBG)

• BlackRock reports record quarterly inflows, assets rise above $14tn (FT)

• Apple takes the sidelines of AI chip arms race, instead partnering with Google Gemini and OpenAI (FT )

• OpenAI signs agreement with Cerebras for supply of 750MW of computing power, in deal worth more than US$10bn (BBG)

• Intel and AMD hike CPU prices amid shortages, server processor capacity nearly sold out (UDN)

TARIFFS

• Trump's against tariffs on critical minerals, orders officials to negotiate agreements with foreign nations instead (BBG)

• Taiwan to invest at least $250bn in US production under new trade deal (CNBC)

• China and Canada push to expand energy deal (BBG)

• Trump imposes 25% tariffs on imports of certain advanced chips, including Nvidia's H200 and AMD's MI325X (BBG)

• China bans cybersecurity products from companies like Palo Alto Networks, Fortinet, Check Point Software Technologies (BBG)

CENTRAL BANKS

• Trump says he has no plans to fire Powell, too early to say whether DOJ probe gives him grounds to remove him (RT)

• Fed officials defend central bank independence, stress importance of setting rates without political interference (BBG)

• PBOC cuts rates on structural policy tools and raises re-lending quotas to support agriculture and tech (WSJ)

• BOJ forecast o raise rates to 1.0% or higher by end‑September, possible hike as early as July (RT)

• BOK on hold as expected, dials back easing stance further (BBG)

GEOPOLITICS

• Trump advisers unable to guarantee quick regime collapse following any military strike (NBC)

• Trump remains intent on Greenland pursuit after White House talks (RT)

• US planning more Taiwan arms sale, with four deals pending congressional notification after $11bn package (RT)

• European nations deploy troops to Greenland to deter potential US takeover (FT)

ECONOMY

• UK GDP up 0.3% month-on-month in November to five‑month high, led by car manufacturing rebound (CNBC)

• Germany full-year GDP grew 0.2% in 2025 after two years of contraction (FT )

• China's 2025 new bank loans hit 16.27tn yuan-the lowest since 2018, signaling weak credit demand (RT)

ASX TODAY

• Another very quiet morning, with the ASX 200 set to snap a four-day winning streak (though futures were negative yesterday but we managed to close 0.47% higher)

• James Hardie to closer several facilities in the US, representing ~6% of YTD North American volume, which will be absorbed by other facilities, annualised cost savings of ~$25 from 1Q27 (JHX)

• Rio Tinto could look to carve out its coal assets if a merger with Glencore eventuates (AFR)

WHAT TO WATCH TODAY

• Not a whole lot: Fairly quiet overnight session, a slight pullback for most commodities (e.g. aluminium down 0.4%, nickel down 1.0%, copper down 1.7%) and most resource-related ETFs finished down less than 1.0%. Oil prices lower (WTI down 3pc to US$59.1) but S&P 500 Energy sector held up relatively well, down just 0.91%. A lot of tech stocks looking very, very ugly (e.g. XRO down 4.1% yesterday to lowest since Dec-23, Life360 down 5.1% to lowest since May-25). It's been a very aggressive and broad-based selloff for all things software. Though plenty of valuations still remain stretched and downside momentum/selling pressure is showing no signs of easing.

BROKER MOVES

• Boss Energy downgraded to Underperform from Neutral; target remains $1.25 (MQG)

• Paladin Energy downgraded to Neutral from Outperform; target remains $11.10 (MQG)

Stocks trading ex-dividend: 

• Fri 16 Jan: Whitefield Income (WHI) – $0.006

• Mon 19 Jan: WAM Income Maximiser (WMX) – $0.005

• Tue 20 Jan: Bluescope Steel (BSL) – $1.00

• Wed 21 Jan: None

• Thu 22 Jan: None

• Fri 23 Jan: None

Other ASX corporate actions today:       

• Dividends paid: FleetPartners Group (FPR), Garda Property Group (GDF)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

No major economic announcements.