Morning Wrap: ASX 200 to snap three-day losing streak, S&P 500 rallies, Trump touts Greenland 'framework' deal

ASX 200 futures are up 39 pts (+0.44%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks broadly higher, reversing most of Wednesday's selloff

• Russell 2000 (+2.00%) back at fresh all-time highs, solid breadth with all sectors positive and Equal-weight S&P 500 outperforming the cap-weighted index

• Trump touted a 'framework' for a future deal for Greenland, holds off on EU tariffs previously set for 1-Feb

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher but off best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks broadly higher but slightly off best levels

• Russell 2000 recoups Wednesday’s losses, now back at all-time highs

• S&P 500 (+1.16%) struggled to hold intraday highs of 1.67%

• All sectors higher, with Equal-weight S&P 500 (+1.67%) outperforming the official benchmark by 51 bps

• Cyclical and value outperformance, with Tech, defensives and yield-sensitive sectors underperforming 

• Gold finished the session higher but faded session highs of 2.6% (US$4,888)

• Stocks rally on Trump’s claim of a ‘framework’ for Greenland deal (BBG)

• TACO trade, which means "Trump Always Chickens Out," has been a winning one on Wall Street for nine months as investors tune out of extreme White House threats (BBG)

• Growing influence of foreign investors fueling volatility in JGBs as domestic participation shrinks (NK)

• Citigroup warns Japan bond volatility spillover could force risk parity funds to sell up to $130 billion in US bonds (BBG)

STOCKS

• Johnson & Johnson sees strong 2026 growth (US$100-101bn) despite deal to cut prices (BBG)

• Volkswagen reports higher-than-expected autos cash flow on lower spending (BBG)

• Ubisoft cancels six games, slashed guidance in restructuring (BBG)

• Netflix guidance underwhelms, guides for higher spending on programming amid intense competition for subscribers (BBG)

• United Airlines exceeds Q4 estimates, projects robust 2026 on premium and international travel strength (BBG)

• Berkshire Hathaway may reduce entire 27.5% stake in Kraft Heinz (RT)

• Amazon launches largest-ever physical megastore outside Chicago entering big-box retail competition (WSJ)

• Thoma Bravo eyes wave of software takeovers as AI fears trigger major selloff in valuations (FT)

• Trump executive order curbs large institutional investors from buying single-family homes to boost affordability (Reuters)

GEOPOLITICS

• Trump called Greenland core to national security, seeking immediate negotiations to acquire it (FT)

• Trump says he agrees with NATO Secretary General Rutte on framework for potential Greenland and broader Arctic deal, prompting US to hold off on imposing new tariffs on select EU countries on 1-Feb (CNBC)

• Trump confident Europe will keep investing in US despite Greenland tariffs while EU calls threats a 'mistake' (BBG)

• Germany joins France in pushing 'trade bazooka' readiness against Trump's Greenland threats (POL)

• Russia cheers Trump's Greenland push as blow to NATO unity, likens it to Crimea annexation (WSJ)

• Trump pushes for 'decisive' military strikes on Iran amid protest crackdown and US force buildup (WSJ)

• China slams US-Taiwan trade deal as economic drain, accusing Washington of hollowing out island's industries (CNBC)

ECONOMY

• UK inflation rises to 3.4% in December, likely delaying Bank of England rate cut (GD)

• Argentina GDP shrunk 0.3% in November, first monthly contraction of 2025, five core sectors all posted annual declines including fishing, manufacturing, construction, wholesale and retail commerce (RT)

• South Korea exports surge 14.9% in early January led by semiconductors despite US tariff pressures (YH)

• China signals more room for fiscal expansion in 2026, focusing on prompting services consumption (RT)

ASX TODAY

• Newsflow is getting busy – with updates from NWL, NST, S32, LYC and more this morning. Will take a closer look at these on the blog

• Amplitude Energy reports Q2 production volume of 7.03PJe vs. 6.88PJe ests, realised gas price of A$10.32/GJ (AEL)

• St Barbara releases PFS for 15-Mile Processing Hub project, post-tax NPV of A$1.4bn at US$3,000/oz gold price (SBM) 

• Wyloo Metals exercises option to buy Newmont’s remaining 9.9% stake in Greatland Resources, increases Wyloo’s stake to 18.1% (GGP)

WHAT TO WATCH TODAY

• Operational excellence: Saw some pretty massive share price moves for Paladin Energy, Rio Tinto and Evolution Mining on Wednesday. All three miners reported better-than-expected December quarter production numbers, notably a big copper beat from Rio and production guidance upgrade from Paladin. What’s interesting is that these stocks all opened slightly higher, and rallied intraday (e.g. PDN opened 2.8% higher vs. 13.1% close). We highlighted all of this pre-market on the blog yesterday. Operational beats and strong guidance could be something to look out for against this bullish commodity price backdrop.

• Choppy resources: Fairly dicey overnight session for commodity prices, with Trump-Greenland de-escalation driving an intraday pullback for gold and silver, while other commodities like copper and aluminium also flat/slightly lower. Despite volatile prices, broker risk-on move buoyed resource-related equities, with most overnight resource ETFs up 1-3%.

BROKER MOVES

• Bank of Queensland upgraded to Buy from Sell; target up to $7.50 from $6.75 (UBS)

• Premier Investments upgraded to Outperform from Neutral; target remains $16.20 (MQG)

• Macquarie Group upgraded to Buy from Neutral; target up to $235 from $225 (UBS)

• NAB upgraded to Buy from Neutral; target up to $47 from $42.50 (UBS)

• Paladin Energy downgraded to Underweight from Neutral; target remains $9.50 (JPM)

• Sigma Healthcare initiated Buy with $3.50 target (GS)

Stocks trading ex-dividend: 

• Thu 22 Jan: Plato Income Maximiser (PL8) – $0.006

• Fri 23 Jan: Mirrabooka Investments (MIR) – $0.045

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 11:30 am: Australia Unemployment Rate (Ests: 4.4% vs. 4.3% prior)

• 12:30 am: US GDP (Q3)

• 2:00 am: US Core PCE Price Index (NOV)