Morning Wrap: ASX in for more pain after Dow, S&P 500 fall sharply on Trump tariffs

In a nutshell:

• More pain ahead for ASX after US markets sell off again overnight

• Markets brace for tariffs on Mexico, Canada

• Gold once again the only shining light 

Let's dive in.

S&P 500 SESSION CHART

S&P 500 rallied from early weakness but sold off sharply late (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks started weaker, rallied back to square, but faded late.

• Dow down 1300 points in the last two sessions

• Concerns about global trade war the main worry, after China, Canada announced retaliatory measures.

• Markets tilt toward risk off on reality of Trump policy, sending "Trump trade' into full retreat (Reuters)

• US treasuries outperform stocks as trade war escalates and Trump trades reverse (Bloomberg)

STOCKS

• Target - Worries around weak sales weighed on the retailer’s shares, dragging them lower (CNBC)

• Best Buy plunges after CEO Corie Barry warned of higher prices for U.S. consumers (CNBC)

• TSMC and Trump announce $100B four-year investment plan into US chipmakers (Reuters)

• Aramco slashes world's largest dividend to $85B, straining Saudi budget (Bloomberg)

• China bans import of genetic sequencers from US maker Illumina as part of response to US tariffs (Reuters)

• Mercedes-Benz pushes forward with cost-cutting drive, reducing headcount (Reuters)

GEOPOLITICS & TRADE

• Zelensky ‘ready to work’ with Trump to secure peace deal

• US suspends military aid to Ukraine, demands apology and peace negotiations (FT)

• EU Unveils €800B "ReArm Europe" plan amid US security pullback (CNBC)

• Trump slams Zelensky for saying war with Russia is a long ways from being over (AP)

• Europe discusses seizing €200B Russian assets to ensure Moscow sticks to ceasefire deal (FT)

• White House exploring options for easing Russia sanctions (Reuters)

• Trump draws currency red line for China, deterring yuan devaluation (Bloomberg)

• Trump escalates trade war with sweeping tariffs on Canada, Mexico and China (Bloomberg, CNN, Reuters)

• China retaliates with tariffs on US farm exports (Bloomberg), but response seen measured (Bloomberg)

• Canada says ready to retaliate if Trump imposes tariffs (Bloomberg)

CENTRAL BANKS

• RBA signals caution on future rate cuts after February easing (Guardian)

ECONOMY

• Trumpcession" looms as Atlanta Fed signals US GDP shrinkage amid policy uncertainty (Reuters)

• Goldman Sachs CEO sees slim recession risk amid Trump's trade policy uncertainty (Bloomberg)

• UK retailers warn of price hikes as employment costs set to rise in April (Reuters)

• UK rental inflation hits three-year low as market shows signs of cooling (FT)

• Japan's unchanged 2.5% unemployment signals tight labour market amid worker shortages (Reuters)

• Australian Open and cricket boost January retail spending amid mixed trends (NewsWire)

• New Zealanders flee to Australia's Gold Coast amid economic downturn (Reuters)

ASX TODAY

• Activist shareholder group alleges Woodside potentially misled investors over oil demand forecasts used to justify its investment in the Trion project in Mexico.

• FIRB approves Pacific Equity Partners’ $1.4 billion takeover of SG Fleet, with the company a step closer to being acquired.

• Qualitas Real Estate Income Fund entitlement and shortfall offer oversubscribed, raises ~$151M at price of A$1.60/unit

WHAT TO WATCH TODAY

• Cyclicals were under outsized pressure in the US overnight, could repeat locally

• Gold stocks likely to catch a bid

BROKER MOVES

• Coles Group initiated at Outperform by RBC Capital Markets; target $22.

• Woolworths Group initiated at Sector Perform by RBC Capital Markets; target $31.

• Reliance Worldwide Corp upgraded to Overweight from Neutral by Jarden; target remains $5.60.

Key events

Stocks trading ex-dividend: 

• Wednesday 5 March: Accent Group (AX1) – $0.055, Australian Ethical Investment (AEF) – $0.05, Cleanaway Waste Management (CWY) – $0.028, Coles Group (COL) – $0.37, EQT Holdings (EQT) – $0.55, EVT (EVT) – $0.16, Excelsior Capital (ECL) – $0.04, HiTech Group Australia (HIT) – $0.05, IDP Education (IEL) – $0.09, IMDEX (IMD) – $0.015, Kina Securities (KSL) – $0.051, Mercury NZ (MCY) – $0.087, Netwealth Group (NWL) – $0.175, Ooh!Media (OML) – $0.035, Qualitas Real Estate Income Fund (QRI) – $0.01, QBE Insurance Group (QBE) – $0.63, Ramsay Health Care (RHC) – $0.40, Resimac Group (RMC) – $0.035, Shaver Shop Group (SSG) – $0.048, Sonic Healthcare (SHL) – $0.44, Woolworths Group (WOW) – $0.39.

• Thursday 6 March: Air New Zealand (AIZ) – $0.01, AUB Group (AUB) – $0.25, Australian Finance Group (AFG) – $0.038, Australian Unity Office Fund (AOF) – $0.24, Atlas Pearls (ATP) – $0.01, Beacon Lighting Group (BLX) – $0.041, BHP Group (BHP) – $0.785, Commonwealth Bank (CBAPG) – $1.357, Engenco (EGN) – $0.005, Freightways Group (FRW) – $0.171, G8 Education (GEM) – $0.035, GTN (GTN) – $0.025, Heartland Group (HGH) – $0.018, Integral Diagnostics (IDX) – $0.025, Jupiter Mines (JMS) – $0.007, Laserbond (LBL) – $0.004, Lovisa (LOV) – $0.50, Medibank Private (MPL) – $0.078, Meridian Energy (MEZ) – $0.054, Monadelphous Group (MND) – $0.33, Monash IVF Group (MVF) – $0.026, Mastermyne Group (MYE) – $0.005, NIB Holdings (NHF) – $0.13, Objective Corporation (OCL) – $0.09, Platinum Asset Management (PTM) – $0.015, Platinum Asia Investments (PAI) – $0.005, Platinum Capital (PMC) – $0.03, Praemium (PPS) – $0.01, Ramsay Health Care (RHC) – $0.40, Reliance Worldwide (RWC) – $0.04, Rio Tinto (RIO) – $3.536, Schaffer Corporation (SFC) – $0.45, Smartgroup (SIQ) – $0.31, Sky Network Television (SKT) – $0.076, South32 (S32) – $0.054, TPC Consolidated (TPC) – $0.20, TPG Telecom (TPG) – $0.09, Universal Store (UNI) – $0.22, Veem (VEE) – $0.002, Woodside Energy (WDS) – $0.831, Wotso Property (WOT) – $0.01.

• Friday 7 March: Ampol (ALD) – $0.05, Aussie Broadband (ABB) – $0.04, Endeavour Group (EDV) – $0.125, PRL Global (PRG) – $0.02, Viva Energy Group (VEA) – $0.039.

Other ASX corporate actions today: 

• Dividends paid: Amotiv (AOV), GWA Group (GWA), Insurance Australia Group (IAG), JB Hi-Fi (JBH), Korvest (KOV), Microequities Asset Management Group (MAM).

• Listing: MA Credit Income Trust (5 March), Siguiri Gold Corp (7 March), Marimaca Copper Corp (13 March)

• Earnings: Bannerman Energy (BMN), Myer (MYR), Northern Minerals (NTU), WA1 Resources (WA1).

• AGMs: None

Economic calendar (AEDT):

• Australia – GDP Growth Rate QoQ at 11:30 AM 

• China - National People’s Congress