ASX 200 futures are up 104pts (+1.26%) as of 8:30 am AEDT.
In a nutshell:
US core inflation was slightly cooler-than-expected
Several major US banks smashed earnings expectations (earnings, margins and EPS beats across the board) and rallied 2-6%
Major US benchmarks soared on the inflation report
Let's dive in.
Thu 16 Jan 25, 8:22am (AEDT)
Thu 16 Jan 25, 8:22am (AEDT)
Major US benchmarks rallied, with the S&P 500, Nasdaq and Russell 2000 logging their best sessions since the day after Trump's election last November
Today’s big drivers– Cooler-than-expected US core inflation sent bond yields lower and stocks soaring, strength was further supported by better-than-expected earnings from JPMorgan, Citi, Wells Fargo etc. with NII, NIM and EPS beats across the board
US 10-year yield logged its largest one-day decline since 2 August 2024, but only scratching a one-week low
Fed rate cut expectations for January remain relatively unchanged (97.3% likelihood of a hold vs. 97.9% yesterday) but outlook for the rest of the year ticked higher (e.g. May hold likelihood now 54.7% vs. 63.4% yesterday)
Investors pour billions into S&P equal weight fund on growing concerns over Mag 7's dominance of US market (FT)
US midcap stocks are attractive right now on cheaper valuation vs larger peers, says Goldman Sachs (BBG)
Global oil markets face smaller surplus this year amid stronger demand, new supply risks, says IEA (BBG)
December core CPI up 0.2% MoM, slightly below consensus 0.3%
Annualised core was 3.2% vs. 3.3% consensus
Headline CPI up 0.4% MoM, slightly ahead of 0.3% consensus
Annualised headline at 2.9% vs. 2.8% consensus
Energy and food contributed the bulk of the upside, with energy index up 2.6% and accounting for 40% of all-items increase
Food rose 0.3% MoM, decelerating from 0.4% increase in the previous month
Shelter index up 0.3% MoM, same as last month
Car insurance and airfares both reaccelerated
Nvidia's stellar $3tn rally on edge as chipmaker's sales growth is slowing and competition is rising (BBG)
BlackRock shares added 5.1% after the world’s largest asset manager posted a Q4 earnings beat, with assets soaring to US$11.6tn (RT)
Citi gained 6.4% after Q4 earnings topped Wall Street expectations, with adjusted EPS 9.8% ahead of consensus (CNBC)
Goldman Sachs rallied 6% on Q4 earnings beat, with quarterly EPS 45% ahead of analyst expectations (CNBC)
JPMorgan shares tick 2% higher on stronger-than-expected Q4 earnings, led by fixed income and investment banking segments (CNBC)
Wells Fargo shares soar 6.6% on better-than-expected earnings and guidance (CNBC)
PBOC makes second-largest net liquidity injection via 7D reverse repos on record (BBG)
BoE easing bets pick up after softer UK inflation with money markets fully pricing two quarter-point cuts for 2025 (BBG)
BOK expected to cut rates by 25 bp Thursday amid growing concerns over economy (BBG)
Fed Williams says economy is in good shape, disinflationary trends remain but process has been choppy (FED)
Israel and Hamas agree to ceasefire, Israel to exchange Palestinian prisoners for hostages held by Hamas (RT)
US to tighten restrictions on sales of advanced chips to China produced by firms like TSMC, Samsung (BBG)
EU weighing new curbs on imports of Russian aluminum and LNG, banning more banks from SWIFT (BBG)
US imports from China finished 2024 strong after some companies stockpiled shipments ahead of Trump 2.0 (RT)
UK inflation unexpectedly slows to 2.5% in December, paving way for BoE easing (FT)
UK business confidence dips to two-year low after Labour's budget (RT)
German GDP posts second consecutive year of contraction, down 0.2% last year vs. 0.3% decline in the previous year (FT)
Thu 16 Jan 25, 8:21am (AEDT)
Genesis Minerals reports Q2 gold production of 57,055 oz, on-track to meet FY25 guidance of 190-210,000 oz (GMD)
Rio Tinto reports Q4 Pilbara iron ore production (100% basis) of 86.5Mt, in-line with market expectations, however, FY24 iron ore costs expected to be in the upper half of $21.75-23.50 per tonne guidance (RIO)
Big Risk On: Discretionary and Tech were among the best performing S&P 500 sectors overnight. The S&P/ASX 200 Info Tech sector is currently on a six-day losing streak, down 6.4%. Will local tech stocks experience a sharp rebound on Thursday?
Financials: A clean sweep of better-than-expected earnings from US banks. While they are fundamentally very different businesses, the biggest bright spot was the better-than-expected 2025 net interest income guidance as well as net interest margin beats and in-line expense guidances. Could this provide a positive lead in for local financials?
AUB Group initiated Hold with $32.80 target (CSLA)
Baby Bunting upgraded to Buy from Neutral; target is $2.01 (CITI)
Beach Energy downgraded to Sell from Neutral but target up to $1.30 from $1.20 (CITI)
Computershare downgraded to Neutral from Buy but target up to $35.50 from $31 (GS)
DigiCo Infrastructure REIT initiated Buy with $5.80 target (GS)
Origin Energy downgraded to Neutral from Buy but target up to $10.40 (GS)
Steadfast Group initiated Outperform with $6.60 target (CSLA)
Stocks trading ex-dividend:
Thu 16: None
Fri 17 Jan: None
Other ASX corporate actions today:
Dividends paid: Garda Property Group (GDF)
Listing: Southern Cross Gold Consolidated (SX2)
Earnings: None
AGMs: None
Economic calendar (AEDT):
10:30 am: Australia Unemployment Rate (Dec)
5:00 pm: UK GDP (Nov)
11:30 pm: US Retail Sales (Dec)
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