Daily Market Reports | 9:01 AM
This story features TELIX PHARMACEUTICALS LIMITED, and other companies. For more info SHARE ANALYSIS: TLX
SPI futures are pointing to another down day as traders take risk off the table ahead of the Bank of Japan and FOMC rate decisions.
World Overnight | |||
SPI Overnight | 7808.00 | – 52.00 | – 0.66% |
S&P ASX 200 | 7860.40 | + 6.30 | 0.08% |
S&P500 | 5614.66 | – 60.46 | – 1.07% |
Nasdaq Comp | 17504.12 | – 304.55 | – 1.71% |
DJIA | 41581.31 | – 260.32 | – 0.62% |
S&P500 VIX | 21.70 | + 1.19 | 5.80% |
US 10-year yield | 4.28 | – 0.03 | – 0.58% |
USD Index | 102.89 | – 0.48 | – 0.46% |
FTSE100 | 8705.23 | + 24.94 | 0.29% |
DAX30 | 23380.70 | + 226.13 | 0.98% |
Good Morning,
The risk off tone gripped US markets overnight, shaking off a two day rally with investors continuing to buy up gold.
The ASX200 seemed to be one step ahead of US markets, with selling emerging again in yesterday’s afternoon session, causing the market to end flat after a positive start.
Asian and European markets traded higher overnight, with the German parliament passing its landmark spending package, which excludes defence spending from fiscal constraints and includes an off-budget EUR500bn infrastructure fund.
While widely anticipated and well-flagged, the fiscal impulse could add between 1.5% and 2% to German GDP over the next decade and represents a record EUR1trn in such a concentrated period.
US markets moved back into risk-off mode, selling off as sentiment soured ahead of tomorrow’s FOMC meeting and the Bank of Japan decision today.
Markets are pricing in around -59bps of cuts in 2025, similar to the December dot plot of -50bps. Investors will be closely listening to commentary around the proposed reciprocal tariffs (April 2) and the potential inflationary impacts.
The “S” word, i.e. stagflation, is increasingly making a comeback into commentary on the US economy.
The downside move follows two consecutive winning sessions for the S&P500 (-1.1%) and Nasdaq Composite (-1.7%), though the gains haven’t been fully erased.
The S&P500 and Nasdaq Composite remain 1.7% and 1.2% higher, respectively, than Thursday’s close. Mega-cap stocks led today’s weakness, with Tesla down -5.3%, Nvidia falling -4% despite Jensen Huang’s two-hour update at its GTC event, and both Meta and Alphabet weakening as well.
Alphabet announced a US$32bn cash acquisition of Wiz, Inc., a cloud security platform company.
Commentators suggested geopolitical concerns as a factor driving today’s downside move, yet price action in commodities and Treasuries didn’t reflect that.
Oil prices, which often rise as tensions increase in the Middle East due to concerns about supply disruptions, dropped -1.2% to US$66.78/bbl.
President Trump’s call with Russian President Putin received little response from stocks and bonds. White House Press Secretary Karoline Leavitt issued a readout of the call, stating that “leaders agreed that the movement to peace will begin with an energy and infrastructure ceasefire, as well as technical negotiations on the implementation of a maritime ceasefire in the Black Sea, full ceasefire, and permanent peace.”
US economic data were mixed, with housing starts increasing in February, while import and export prices reflected an inflationary shift in the year-over-year readings.
According to Bank of America’s fund manager survey, investors made the biggest-ever cut to US equity allocations in March, with a decline of -40 percentage points to net underweight -23% in March from 17% overweight in February.
Allocations to European equities rose 27 percentage points in the same month, reaching the highest level since July 2021. The report reflected the most acute switch out of the US into Europe since 1999, when Bank of America records began.
Many investors are questioning whether US exceptionalism has peaked.
The Australian dollar slipped -0.3% to US$63.62, and gold continued to advance, up 1.1% to US$3,034.25/oz.
The FOMC Meeting: Trading the main event by Chris Weston, Pepperstone
The focus for USD, US Treasuries and US rates traders now falls on the FOMC meeting, and while the Fed won’t change its policy setting on the fed funds rate, with new economic projections, a new set of Dots’ and Jay Powell’s presser, the prospect for volatility in the latter stage of US trade is certainly a risk for exposures.
There is some risk the Fed lowers its 2025 dot to 3.60%, from 3.875% and closer to current implied market pricing –a factor which would initially negatively impact the USD– however, the more likely scenario might be for the central projections for the fund funds rate in 2025, 2026 and 2027 to remain unchanged from the projections seen at the December FOMC meeting.
We should also see some massaging on the central expectations for inflation and growth, with the 2025 GDP estimate likely revised towards 1.7% (from 2.1%), while core PCE for 2025 may be lifted a touch to 2.6%.
With US swaps implying -58bp of cuts by December and the fed funds rate closer to 3.75%, the market is priced for a more near-term dovish lean from the Fed. That said, market pricing over a longer-term period implies a shallower path to cuts over the full cycle than what has been expressed in the Fed’s prior projections, with the implied fed funds terminal rate set at 3.55% (or -78bp of cumulative cuts).
Of course, the market wants to ascertain the vicinity of the strike price on any Fed put, and if growth risks are manifesting, how close they could be to pulling the trigger on additional easing. US swaps imply the next -25bp cut in the June FOMC meeting, and that pricing will reconcile with the tone of the FOMC statement, as well as its economic projections and Powell’s presser.
We may also hear more about its balance sheet and the longevity of its QT program. I am skewed for USD upside risk from the meeting, but I wouldn’t trade the meeting myself, depending on if there were any real surprises I would look to fade any intraday rallies in the USD.
Corporate news in Australia
-Telix Pharmaceuticals ((TLX)) received approval for Illuccix in Brazil, including exclusive distribution.
-Findi ((FND)) launched an equity raising of $45m for capex and restructuring. Morgans, AST, and Ord Minnett are the brokers involved.
-Atlassian received US FedRAMP approval to offer cloud solutions for US government agencies.
-Endeavour Group ((EDV)) Chairman Ari Mervis is in the spotlight over governance concerns and the lack of a permanent CEO following Steven Donohue’s departure.
-The largest shareholder of Ora Banda Mining ((OBM)), Hawke’s Point, has sold down its 31.4% stake in a block trade.
-ASIC has started investigations into whether the review of founder Richard White’s conduct should be released and has begun interviewing the four resigned directors last week.
On the calendar today:
-NZ 4Q BoP
-JP BoJ rate decision
-JP Jan Core machine orders
-EZ Feb CPI
-US FOMC rate decision
-AUCKLAND INTERNATIONAL AIRPORT LIMITED ((AIA)) ex-div 5.62c
-CTI LOGISTICS LIMITED ((CLX)) ex-div 5c (100%)
-ENERO GROUP LIMITED ((EGG)) ex-div 1.5c (100%)
-GENESIS ENERGY LIMITED ((GNE)) ex-div 6.41c
-HELIA GROUP LIMITED ((HLI)) ex-div 16c (100%)
-HELIA GROUP LIMITED ((HLI)) ex-div 53c (100%)
-LGI LIMITED ((LGI)) ex-div 1.2c (100%)
-MACMAHON HOLDINGS LIMITED ((MAH)) ex-div 0.55c (100%)
-MYER HOLDINGS LIMITED ((MYR)) earnings report
-PREDICTIVE DISCOVERY LIMITED ((PDI)) earnings report
-PEET LIMITED ((PPC)) ex-div 2.75c (100%)
-PEPPER MONEY LIMITED ((PPM)) ex-div 7.10c (100%)
-PERENTI LIMITED ((PRN)) ex-div 3c
-SHRIRO HOLDINGS LIMITED ((SHM)) ex-div 2c (100%)
-TUAS LIMITED ((TUA)) earnings report
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
Spot Metals,Minerals & Energy Futures | |||
Gold (oz) | 3041.59 | + 40.49 | 1.35% |
Silver (oz) | 34.66 | + 0.23 | 0.65% |
Copper (lb) | 5.00 | + 0.11 | 2.19% |
Aluminium (lb) | 1.20 | – 0.01 | – 0.99% |
Nickel (lb) | 7.34 | – 0.06 | – 0.82% |
Zinc (lb) | 1.33 | – 0.01 | – 0.75% |
West Texas Crude | 66.77 | – 0.14 | – 0.21% |
Brent Crude | 70.36 | – 0.22 | – 0.31% |
Iron Ore (t) | 102.42 | + 0.10 | 0.10% |
The Australian share market over the past thirty days
Index | 18 Mar 2025 | Week To Date | Month To Date (Mar) | Quarter To Date (Jan-Mar) | Year To Date (2025) |
---|---|---|---|---|---|
S&P ASX 200 (ex-div) | 7860.40 | 0.91% | -3.82% | -3.66% | -3.66% |
BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
CHC | Charter Hall | Upgrade to Buy from Neutral | Citi |
HLI | Helia Group | Downgrade to Underperform from Neutral | Macquarie |
LIC | Lifestyle Communities | Upgrade to Buy from Neutral | Citi |
MIN | Mineral Resources | Upgrade to Buy from Sell | UBS |
SMP | SmartPay | Upgrade to Buy from Hold | Bell Potter |
WOW | Woolworths Group | Upgrade to Outperform from Neutral | Macquarie |
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.)
(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)
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CHARTS
For more info SHARE ANALYSIS: AIA - AUCKLAND INTERNATIONAL AIRPORT LIMITED
For more info SHARE ANALYSIS: CLX - CTI LOGISTICS LIMITED
For more info SHARE ANALYSIS: EDV - ENDEAVOUR GROUP LIMITED
For more info SHARE ANALYSIS: EGG - ENERO GROUP LIMITED
For more info SHARE ANALYSIS: FND - FINDI LIMITED
For more info SHARE ANALYSIS: GNE - GENESIS ENERGY LIMITED
For more info SHARE ANALYSIS: HLI - HELIA GROUP LIMITED
For more info SHARE ANALYSIS: LGI - LGI LIMITED
For more info SHARE ANALYSIS: MAH - MACMAHON HOLDINGS LIMITED
For more info SHARE ANALYSIS: MYR - MYER HOLDINGS LIMITED
For more info SHARE ANALYSIS: OBM - ORA BANDA MINING LIMITED
For more info SHARE ANALYSIS: PDI - PREDICTIVE DISCOVERY LIMITED
For more info SHARE ANALYSIS: PPC - PEET LIMITED
For more info SHARE ANALYSIS: PPM - PEPPER MONEY LIMITED
For more info SHARE ANALYSIS: PRN - PERENTI LIMITED
For more info SHARE ANALYSIS: SHM - SHRIRO HOLDINGS LIMITED
For more info SHARE ANALYSIS: TLX - TELIX PHARMACEUTICALS LIMITED
For more info SHARE ANALYSIS: TUA - TUAS LIMITED