The Overnight Report: Big Tech Finds Favour

This story features AVJENNINGS LIMITED, and other companies. For more info SHARE ANALYSIS: AVJ

FNArena is experiencing technical problems with commodity prices. Our apologies.

Bargain hunting in technology stocks underpinned a Nasdaq rally overnight with a more risk on tone ahead of reciprocal tariff announcements tomorrow. ASX futures are suggesting another positive start for the local session on Wednesday.

World Overnight
SPI Overnight	7994.00	+ 28.00	0.35%
S&P ASX 200	7925.20	+ 81.80	1.04%
S&P500	5633.07	+ 21.22	0.38%
Nasdaq Comp	17449.89	+ 150.60	0.87%
DJIA	41989.96	– 11.80	– 0.03%
S&P500 VIX	21.77	– 0.51	– 2.29%
US 10-year yield	4.16	– 0.09	– 2.12%
USD Index	103.87	+ 0.16	0.15%
FTSE100	8634.80	+ 51.99	0.61%
DAX30	22539.98	+ 376.49	1.70%

Good Morning,

US markets recovered off intraday day lows with some buying despite less positive economic updates and tariffs. 

What happened overnight

US markets had a choppy and volatile start to April and the second quarter. Major equity indices traded above and below prior closing levels as investors wait on tomorrow’s tariff announcements and digest this morning’s economic data.

The market moved lower following the latest manufacturing report that showed activity contracted in March while prices grew sharply for the second month in a row.

The data underscored the market’s growing fears about growth, which could translate into lower earnings prospects, heightened by uncertainty on the tariff front.

Heavily sold-off mega cap stocks found some buying support, with Apple shares up 0.5%, Microsoft up 1.8%, and Nvidia rising 1.7%. Combined, they represent nearly 20% of the S&P500 in terms of market cap.

Eight of the 11 S&P500 sectors registered gains, led by consumer discretionary, up 1.1%, communication services up 1.0%, and technology lifting 1.0%. The health care sector fell -1.8%, and financials were down slightly by -0.2%.

US Treasury yields fell across the curve. The 10-yr yield dropped -9bps to 4.16%, and the 2-yr yield settled down -5bps lower at 3.86%.

Liberation Day and tariff announcement 

The Trump tariff announcements are expected to be announced 4pm eastern time or 7am tomorrow Australian time in the White House Rose Garden. Uncertainty around the exacts details remains high with White House Press secretary Leavitt stating Trump was “with his trade and tariff team right now, perfecting it to make sure this is a perfect deal”. 

The Washington Post reported aides are considering a plan that would raise duties on products by about 20% from nearly every country, rather than targeting certain countries or products. 

The EU, Canada, China, South Korea and Japan are all preparing retaliatory action against the tariff imposition.

Federal Reserve official Tom Barkin compared the economic uncertainty to fog, he stated: “It’s not an everyday ‘forecasting is hard’ type of fog…..It’s a zero visibility, pull over and turn on your hazards type of fog.”

Barkin also noted the uncertainty was leaving some businesses “frozen” or “paralysed”.

Macro news roundup: Extract from Markets Today, National Australia Bank

In US data, the Manufacturing ISM was a little weaker than expected at 49.0 from 50.3. It would have been even weaker if not for a 3.5pt increase in the inventories index. New orders fell for a second month, down -3.4ppt to 45.2, its lowest since May 2023. Prices paid jumped 7pts to the highest level since 2022.

Commentary highlighted tariff uncertainty with one respondent saying “business condition is deteriorating at a fast pace. Tariffs and economic uncertainty are making the current business environment challenging.”

Less timely JOLTS data for February in contrast were consistent with the earlier trend of a low hiring and low firing labour market that is broadly healthy but showing some very gradual cooling. Openings were a little below expectations at 7.6m vs 7.7m expected but have broadly chopped sideways since mid-last year. Quits, hires and layoff rates were all unchanged from January. ADP data is tonight, jobless claims tomorrow, ahead of Payrolls Friday.

In Europe, eurozone inflation was in line with expectations at 2.2% year-on-year. The core measure slowed to 2.4% from 2.6%, a tenth more than expected, while services inflation cooled to 3.4%. That followed country level data that was generally on the softer side of expectations. Markets have -19bps of cuts priced for April, though that has pared back a couple of basis points from the start of the week, helped by Bloomberg reporting on Monday that officials are contemplating an April pause. 

From Australia yesterday, the RBA was on hold as widely expected and Governor Bullock played a straight bat in the press conference. The post meeting statement noted the “continued decline in underlying inflation is welcome” and that “the Board noted that monetary policy is well placed to respond to international developments if they were to have material implications for Australian activity and inflation.”

Though they noted there were risks on both sides of the inflation outlook and “a range of indicators suggest that labour market conditions remain tight.” In the press conference, Bullock said the Board “did not explicitly discuss a rate cut” but added “it did talk a little bit about downside risks and including the global downside risks.”

NAB continues to expect the RBA is a little too cautious on their inflation outlook and we expect a cut in May and a gradual cutting cycle that ultimately extends to 3.1% in 2026.

Corporate news in Australia

-Proprium’s $369m buyout of AV Jennings ((AVJ)) is accepted.

-Virgin Australia is due to IPO in June, with a May capital raising.

-The NZ government is considering a deal for Kiwibank, which includes an equity investment of NZ$500m and a possible IPO down the track.

-David Di Pilla of HMC Capital ((HMC)) states the intention to retain the hospitals if successful in the acquisition of Healthscope.

-Lendlease Group ((LLC)) has sold its UK construction business for $70m, exiting its international construction operations.

On the calendar today:

-NZ Feb Building Permit

-AU Feb Building Approval

-US Feb durable goods

-US Feb factory orders

-US March ADP

-ARB CORPORATION LIMITED ((ARB)) ex-div 34c (100%)

-HARVEY NORMAN HOLDINGS LIMITED ((HVN)) ex-div 12c (100%)

-NOVONIX LIMITED ((NVX)) AGM

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

The Australian share market over the past thirty days

Index	01 Apr 2025	Week To Date	Month To Date (Apr)	Quarter To Date (Apr-Jun)	Year To Date (2025)
S&P ASX 200 (ex-div)	7899.70	-1.03%	0.72%	0.72%	-3.18%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
IPL	Dyno Nobel	Upgrade to Buy from Accumulate	Ord Minnett
NST	Northern Star Resources	Upgrade to Buy from Hold	Bell Potter
PDN	Paladin Energy	Upgrade to Outperform from Neutral	Macquarie
PNR	Pantoro	Downgrade to Sell from Hold	Bell Potter
TRS	Reject Shop	Downgrade to Hold from Buy	Ord Minnett

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)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms