Morning Wrap: ASX 200 to tick lower, S&P 500 enters correction territory

ASX 200 futures are down 12pts (-0.15%) as of 8:30 am AEDT.

In a nutshell:

• Markets continued to tumble overnight, with the S&P 500 now down more than 10% since all-time highs (and entering correction territory)

• Cooler-than-expected US producer price data failed to offer any support as Trump policy uncertainty is now spilling over to consumer and corporate behaviour

• ASX 200 set to open slightly lower and not far off a 10% correction (currently down 9.4% since 14 Feb record close)

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks finished lower, closing near worst levels

• S&P 500 closed in correction territory, down more than 10% since its 19-February record high

• S&P 500, Nasdaq and Russell 2000 all on track for their fourth straight weekly declines (and six declines in the past seven weeks)

• The path of least resistance remains lower amid more signs of Trump policy uncertainty spilling over to consumer and corporate behaviour

• Cooler-than-expected US producer price print offered no support to broader indices

• US corporate bond spreads hit widest since September amid growing concerns of recession (FT)

• Stocks seek refuge in stagflation bets as Trump's tariff war stokes market uncertainty (BBG)

• Stock market volatility unlikely to end until clarity on Trump tariffs (NYT)

• JPMorgan say US equity correction may be over, lower recession risk (BBG)

STOCKS

• Intel names former board member Lip-Bu Tan as next CEO (RT)

• Adobe revenue outlook underwhelms, heightening AI monetization concerns (BBG)

• BMW will absorb cost of tariffs on its imports from Mexico over next several weeks (RT)

• Deutsche Bank forecasts 2025 revenue growth amid analyst skepticism (RT) 

CENTRAL BANKS

• BOJ sees no need to intervene in bond market despite benchmark yields hitting 2008 highs (BBG)

• ECB's Nagel says euro-area inflation will return to 2% target by the end of 2025 but cautions over US tariffs (BBG)

• Fed has not yet released its 2024 preliminary financial statement, despite nearly two decades of January releases (RT)

TRADE WAR

• Trump threatens further tariffs as EU and Canada retaliate in escalating trade war (BBG)

• Trump offers many reasons for imposing tariffs, including revenue, leverage over competitors and job creation (NYT)

• Canada files complaint with the WTO on US steel, aluminum tariffs (RT)

• Global firms plan for worst amid Trump's tariff barrage, with many setting up "tariff task forces" to mitigate risks (BBG)

• Walmart clashing with China over company's efforts to reduce the impact of Trump's increased tariffs (AX)

• IEA says global oil demand under pressure from escalating trade war at the same time that OPEC+ is reviving output (BBG)

ECONOMY

• US February core PPI cooler-than-expected, down 0.1% month-on-month vs. consensus for a 0.3% increase while annualised PPI was 3.2% vs. 3.3% consensus, largely driven by a 1.2% drop in energy prices (RT)

• US consumer spending weakens across all income levels amid economic uncertainty (WSJ)

• China NPC takeaways highlight Beijing's shifting priorities amid AI breakthroughs and US tariffs (FT)

• UK corporate distress hits post-pandemic high as economic pressures mount (BBG)

• EU egg prices climb to highest level in decades as bird flu inflates prices in US and abroad (BBG)

ASX TODAY

• Block’s Square Financial Services receives FDIC approval to offer consumer loans via its Cash App, intended to provide short-term loans of less than $100 for ~1 month in duration (XYZ)

• Pinnacle Investment Management notes National Pension Service of Korea partnership acquisition of 4.17% in Metrics for $50m, proceeds to support future growth initiatives (PNI)

WHAT TO WATCH TODAY

Not a whole lot to watch this morning as the market continues to spiral lower. Gold miners had a very strong overnight session, with the VanEck Gold Miners ETF up 3.1% overnight to a fresh five month high.

As I return from my break, here's what I'm seeing: The market remains heavy and I'm increasingly seeing more funds/investment managers shifting to cash. While the indices are deeply oversold, making a strong bounce more likely, volatility is high, and we can't rule out further downside in the near term. While bottoms can form when things look their worst, that doesn’t necessarily mean it’s time to roll the dice.

BROKER MOVES

Big sweep of changes from Macquarie. Mostly upgrading gold miners (likely reflecting higher gold price assumptions) and downgrades to coal miners.

• Capricorn Metals upgraded to Neutral from Underperform; target up to $8.10 from $7.30 (MQG)

• Charter Hall upgraded to Buy from Neutral; target remains $18.50 (CITI)

• Coronado Global downgraded to Underperform from Outperform; target down to $0.40 from $0.80 (MQG)

• Evolution Mining upgraded to Neutral from Underperform; target up to $6.20 from $5.50 (MQG)

• Fortescue upgraded to Neutral from Underperform; target remains $15 (MQG)

• Genesis Minerals upgraded to Outperform from Neutral; target up to $3.80 from $3.30 (MQG)

• Helia Group downgraded to Underperform from Neutral; target remains $4.20 (MQG)

• Liontown Resources upgraded to Neutral from Underperform; target up to $0.65 from $0.60 (MQG)

• Mineral Resources upgraded to Outperform from Neutral; target up to $39 from $36 (MQG)

• New Hope downgraded to Neutral from Outperform; target down to $4.25 from $5.50 (MQG)

• Nickel Industries upgraded to Outperform from Neutral; target up to $0.85 from $0.83 (MQG)

• Pilbara Minerals upgraded to Outperform from Neutral; target up to $2.40 from $2.20 (MQG)

• Whitehaven Coal downgraded to Neutral from Outperform; target down to $6.50 from $8.50 (MQG)

Stocks trading ex-dividend: 

• Fri 14 Mar: Ariadne Australia (ARA) – $0.005, CAR Group (CAR) – $0.385, Data#3 (DTL) – $0.131, Wisetech Global (WTC) – $0.105

• Mon 17 Mar: Austin Engineering (ANG) – $0.006, Chorus (CNU) – $0.177, HUB24 (HUB) – $0.24, L1 Long Short Fund (LSF) – $0.063, Ramelius Resources (RMS) – $0.03, Saunders International (SND) – $0.02, SKS Technologies Group (SKS) – $0.01

• Tue 18 Mar: Credit Corp Group (CCP) – $0.32, Nido Education (NDO) – $0.058, NZME (NZM) – $0.054, Reece (REH) – $0.065, Seek (SEK) – $0.24

• Wed 19 Mar: Auckland International Airport (AIA) – $0.056, Brisbane Broncos (BBL) – $0.02, Briscoe Group Australasia (BGP) – $0.091, CTI Logistics (CLX) – $0.05, Enero Group (EGG) – $0.015, Genesis Energy (GNE) – $0.064, Helia Group (HLI) – $0.69, LGI (LGI) – $0.012, Macmahon (MAH) – $0.006, Peet (PPC) – $0.028, Pepper Money (PPM) – $0.071, Perenti (PRN) – $0.03, Shriro (SHM) – $0.02

• Thu 20 Mar: a2 Milk Company (A2M) – $0.065, Cochlear (COH) – $2.15, Earlypay (EPY) – $0.001, K&S Corporation (KSC) – $0.08, Kelsian Group (KLS) – $0.08, Service Stream (SSM) – $0.025, Spark New Zealand (SPK) – $0.108, Supply Network (SNL) – $0.32, Tourism Holdings (THL) – $0.023

• Fri 21 Mar: a2 Milk Company (A2M) – $0.065, Cochlear (COH) – $2.15, Earlypay (EPY) – $0.001, K&S Corporation (KSC) – $0.08, Kelsian Group (KLS) – $0.08, Service Stream (SSM) – $0.025, Spark New Zealand (SPK) – $0.108, Supply Network (SNL) – $0.32, Tourism Holdings Rentals (THL) – $0.023

Other ASX corporate actions today:

• Dividends paid: Ashley Services Group (ASH), ALFABS Australia (AAL), Jumbo Interactive (JIN), Pacific Current Group (PAC), Schaffer Corp (SFC), SHAPE Australia Corp (SHA), Step One Clothing (STP), Suncorp Group (SUN), Tabcorp (TAH), and Whitehaven Coal (WHC)

• Listing: None

• Earnings: Liontown (LTR)

• AGMs: None

Economic calendar (AEDT):

• 6:00 pm: UK GDP (JAN)

• 1:00 am: US Consumer Sentiment (MAR)