The Overnight Report: Post-CPI Relief

This story features DICKER DATA LIMITED, and other companies. For more info SHARE ANALYSIS: DDR

A fall in airfares assisted a lower-than-expected February US Core CPI print (pre-tariff imposition), which boosted sentiment and markets despite retaliatory tariffs from Europe and Canada on the latest US 25% import tariffs on steel and aluminium.

The Bank of Canada cut rates as expected, and Russia is reported to be trying to lengthen the timeline for a truce.

SPI futures are modestly pointing higher as investors remain cautious.

Good Morning from FNArena, a positive tilt to start Thursday

A better-than-expected US February CPI print helped change market sentiment, with bottom-fishing in the sold-down mega caps.

Total US CPI rose 2.8% year-on-year for February versus January at 3%, and core CPI lifted 3.1% versus 3.2% in January.

Market expectations for Fed funds rate cuts remained basically unchanged by the data, with an 80% probability of at least another -25bps cut at the June FOMC meeting, according to the CME FedWatch Tool.

The Nasdaq and the S&P500 finished in the green, but the Invesco S&P500 Equal Weight ETF (RSP) closed lower by -0.5%. Five S&P500 sectors closed in the red, continuing the rotation.

Treasury markets didn’t respond much to the CPI data, with the US 10-year yield ticking up to 4.31%, nor to the Treasury Budget for February, which showed a deficit of -US$307bn. The record deficit for the first five months of the fiscal year reached -US$1.15trn, driven in part by rising Medicare costs and increasing interest payments on government debt.

In Singapore yesterday, Dalio highlighted a “very severe” supply-demand problem concerning US debt. He emphasised the urgency of reducing the deficit from a projected 7.2% of GDP to about 3% to prevent potential economic shocks.

The tariffs on steel and aluminum imports imposed by the US have caused a ripple effect, leading Canada and the EU to announce retaliatory measures. European markets ignored the escalating trade tensions and rose again.

In a report from the Wall Street Journal, National Australia Bank highlighted the Yale CEO Caucus, where CEOs were asked how much the stock market would need to decline before they spoke out collectively. 44% said it would need to decline -20%, while a further 22% said stocks would have to fall by -30% before they would take a stand.

Since Trump’s election, the S&P500 is down -2.3%, and the inference from the caucus is that Trump’s impact could be much lower than people currently consider.

-Dow Jones Industrial Average: -1.5% YTD
-S&P 500: -4.5% YTD
-S&P Midcap 400: -6.4% YTD
-Nasdaq Composite: -9.5%
-Russell 2000: -9.5% YTD

Corporate news in Australia

-Cloudstrike and Dicker Data ((DDR)) sign new distribution agreement
-Telix Pharmaceuticals ((TLS)) completed the acquisition of new FAR-targeting theranostic candidates, adding TLX400 to its bladder pipeline
-Future Fund is acquiring a stake in Transgrid from OMERS, aligning with the government’s plan
-A 25% stake in Shiperoo has been acquired by Australia Post to improve e-commerce returns and sustainability through AI-driven solutions
-Orica ((ORI)) launches a $400m buyback following an earnings upgrade
-Fund losses have placed HMC Capital ((HMC)) under scrutiny
-Insurance Australia Group ((IAG)) logs over 4,000 claims following Cyclone Alfred
-Fonterra ((FSF)) plans Mainland Group IPO to raise up to $2bn

On the calendar today:

-NZ Jan Net migration

-US Feb PPI

-US Jan Industrial Prod’n

-BAPCOR LIMITED ((BAP)) ex-div 8c (100%)

-BISALLOY STEEL GROUP LIMITED ((BIS)) ex-div 8c (100%)

-BANNERMAN ENERGY LIMITED ((BMN)) earnings report

-COUNT LIMITED ((CUP)) ex-div 1.75c (100%)

-DURATEC LIMITED ((DUR)) ex-div 1.75c (100%)

-EMBELTON LIMITED ((EMB)) ex-div 15c (100%)

-GLOBE INTERNATIONAL LIMITED ((GLB)) ex-div 10c (100%)

-INGHAMS GROUP LIMITED ((ING)) ex-div 11c (100%)

-KOGAN.COM LIMITED ((KGN)) ex-div 7c (100%)

-MCMILLAN SHAKESPEARE LIMITED ((MMS)) ex-div 71c (100%)

-MACQUARIE GROUP LIMITED ((MQG)) investor briefing (EMEA region investor tour)

-PM CAPITAL GLOBAL OPPORTUNITIES FUND LIMITED ((PGF)) ex-div 5.50c (100%)

-PEPPER MONEY LIMITED ((PPM)) ex-div 7.10c (100%)

-PERPETUAL LIMITED ((PPT)) ex-div 61c

-PWR HOLDINGS LIMITED ((PWH)) ex-div 2.20c (100%)

-REGIS HEALTHCARE LIMITED ((REG)) ex-div 8.09c (60%)

-SRG GLOBAL LIMITED ((SRG)) ex-div 2.50c (100%)

-THORNEY OPPORTUNITIES LIMITED ((TOP)) ex-div 1.1c (100%)

-VULCAN STEEL LIMITED ((VSL)) ex-div 1.99c (100%)

-YANCOAL AUSTRALIA LIMITED ((YAL)) ex-div 52c (100%)

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

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