The Overnight Report: Big Tech Shines (Again!)

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This story features AMCOR PLC, and other companies.
For more info SHARE ANALYSIS: AMC
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

The S&P500 and Nasdaq remained relatively resilient in the face of rising oil prices and a more hawkish Federal Reserve.

Big Tech earnings post close have, on balance, beaten expectations with no signs of a slowdown in capex.

After a seventh consecutive negative session, the ASX200 futures are pointing to yet another soft start on Thursday.

Good Morning,

The Australian market declined for a seventh straight session on Wednesday despite softer than feared inflation data. The ASX200 fell -24 points or -0.3% to 8,687.

Healthcare led the declines with Energy and Utilities outperforming.

Meta, Alphabet, Microsoft and Amazon reported after the close with Meta shares trading down -6% in the aftermarket and the other three tech titans trading higher in the aftermarket led by Alphabet up 6%.

March quarterly updates continue today with Amcor ((AMC)), Boss Energy ((BOE)), Mineral Resources ((MIN)), Woolworths Group ((WOW)), Liontown ((LTR)) and IGO Ltd ((IGO)).

See also FNArena’s Corporate Calendar https://fnarena.com/index.php/financial-news/calendar/

Today’s Big Picture, J.L. Bernstein extract 

Jerome Powell Digs In

The Fed held rates with four dissents, the worst split since 1992.

Then Powell dropped the real news. He’s staying on the board past May 15.

That blocks Trump from a Fed majority. Warsh will be chair without the votes.

The Energy Wrecking Ball

Brent touched US$119 intraday.

Trump killed Iran’s offer to reopen Hormuz, so the blockade stays for now.

Pump prices hit US$4.23 near me and that’s about national average.

Powell said the inflation pain hasn’t even peaked yet.

The Fed can’t fix oil with rates.

Two Down, AI Demand Looks Real 

Google Cloud put up US$20 billion, US$2 billion above consensus and accelerating hard.

Microsoft beat across the board too, though capex came in US$3 billion light.

Either Microsoft is getting disciplined or losing share to Google Cloud.

The OpenAI revenue panic looks overdone either way. Amazon and Meta also report.

ANZ Bank, Australian Morning Focus extract

Higher oil prices drove equity markets lower and bond yields higher, as geopolitical headlines pointed to the risk of escalation in the Middle East.

Axios reported Trump rejected Iran’s offer to re-open the Strait of Hormuz, and will keep the US blockade in place, while also leaving the door open to renewed military action against Iran.

The S&P500 was down -0.04%. The EuroStoxx50 ended its session down -0.3% while the FTSE100 lost -1.2%.

The yield on the US 10y note rose around 8.1bp to 4.43%. WTI lifted 8.4% to US$108.2/bbl. Gold was weaker at US$4,544.2/oz.

Data/event pulse US:

Durable goods orders rose 0.8% m/m in March, above the consensus of 0.5% m/m. Core capital goods orders rose 3.3% m/m, following an upwardly revised 1.6% m/m gain in February, with AI-related investment continuing to underpin strength.

Separately, the US trade deficit widened to US$87.9bn from US$4.4bn in March as growth in imports outpaced growth in exports.

The advance estimate of Q1 GDP is due tomorrow, and market consensus is for the economy to grow 2.2% q/q (saar).

Key themes and views Fed:

The Federal Open Market Committee (FOMC) kept the federal funds target rate unchanged, as expected by the market. The statement retained an easing bias, but Hammack, Kashkari and Logan voted against the statement, objecting to the retention of the easing bias.

Miran voted in favour of a cut. Having three dissenters opposed to the easing bias meant the decision was interpreted as hawkish by the market.

This was Powell’s last decision as Chair, but at the press conference he said he would stay on the Board as a member until the investigation into the Fed’s headquarters is “well and truly over”.

Bank of Canada kept its policy rate unchanged at 2.25%, as expected, with balanced guidance. Governor Macklem stated current policy settings are appropriate and any future changes in policy settings under the base case are expected to be small.

The BoC expects inflation to peak at around 3% in April, before falling back to the 2% target early next year, on the assumption that oil prices ease. The policy statement noted the Governing Council is looking through the initial inflation impacts, though it is prepared to respond if higher energy prices become embedded in underlying inflation.

The rally in crude oil prices shows no signs of slowing, as the prospect of an indefinite closure of the Strait of Hormuz weighs on sentiment. Brent crude surged to its highest since the Middle East conflict escalated in late February, rising nearly 8% to US$123/bbl.

The gains suggest investors are bracing for a protracted conflict that could see oil supplies from the Persian Gulf remain curtailed. This week several peace negotiations have broken down.

Data analytics firm Kpler reported that Iran has enough unused storage capacity to last another 12–22 days. Once full, it would need to cut daily output by -1.6mb/d. This adds to the more than -10mb/d of oil production we believe has been shut in by the closure of the strait.

Global gas markets extended gains as tightness continues. Global LNG output fell -8% y/y in March as the Middle East conflict affected tanker routes, according to the International Energy Agency.

China’s imports of LNG are expected to be around 3.5mt in April about -30% lower from a year earlier, according to Kpler. If confirmed by official numbers, that would be the lowest monthly level since April 2018.

Shell CEO, Wael Sawan, warned that oil and LNG shortages caused by the conflict could drag on for months and possibly into next year. That would be problematic for Europe as it refills empty storage ahead of the next heating season.

Gold extended its decline as an extended period of high energy prices raises concerns of inflation risks. Sentiment was also impacted by a divided Fed. Rising bond yields have increased the opportunity cost of holding gold.

Copper slipped as the Middle East conflict raised risks to global growth. This offset signs of stronger demand in China.

Fabricators have been increasing their restocking efforts ahead of the Labour Day holiday on Friday. This comes after data showed that China’s fixed asset investment rebounded to 1.7% y/y year-to-date in Q1 2026 reversing the contraction of -3.8% in 2025.

Infrastructure stood out with a growth rate of 8.9%, offsetting the weak property investment of -11.2%.

Westpac Bank, Australian March CPI print

The CPI gained 1.4% in the March quarter, on par with market consensus and close to Westpac’s expectation of 1.46%. The annual pace of headline inflation, at 4.1%yr, is accelerating again; it was 2.1%yr in mid-2025 lifting to 3.6%yr in December.

The acceleration through 2025 was mainly the unwinding of energy rebates but in early 2026 it is the crisis in the Gulf, and resulting surge in auto fuel prices, that is driving the acceleration.

However, the cost-of-living assistance and surge in auto fuel has a limited impact on core inflation and so these measures take on more critical role in assessing the current pace of inflation.

We still expect the RBA to raise the cash rate at their May meeting. Given recent communication from the Bank has characterised the supply shock as ‘further exacerbating existing capacity pressures’ with future demand destruction just a possibility, we see two further interest rate hikes after May. 

It is true that the Trimmed Mean for the March quarter was on the RBA forecast of 3.5%yr but to achieve their estimate of 3.7%yr for the June quarter we will have to see a step down in the quarterly pace of 0.8%, a bridge too far we think given the current shock we are experiencing.

Our current forecast for the June quarter Trimmed Mean is 1.0%qtr.

Fed Review: Not quite done yet, Danske Bank

The Fed maintained its policy stance unchanged, as widely expected. Stephen Miran dissented in favour of a rate cut, while three participants dissented against maintaining an easing bias. Powell announced he continues as a Fed Governor past his term as Chair but did not specify for how long.

Powell flagged that growing number of participants are seeing current stance as neutral but did not suggest rate hikes were in the cards for now. Neither the statement nor Powell discussed the Fed’s balance sheet operations.

UST yields moved higher, with markets erasing earlier bets for rate cuts this year and instead pricing in around 50% probability of a hike in H1 2027. We maintain our relatively dovish call, and still expect two cuts in Sep and Dec.

Jay Powell’s final press conference as the Fed chair was as much about guidance during a difficult time for policy setting, as it was about his personal choice.

Powell continues as a Fed Governor also after his term as the Chair ends 15 May, though he intentionally did not specify for how long. The decision is hawkish on the margin, as it blocks Trump from nominating a new and potentially more dovish replacement.

It also means Stephen Miran, who was the only participant voting in favour of a cut, will not continue as a Governor in June when Kevin Warsh takes his seat.

Powell tied his future exit to DoJ’s criminal investigation being ‘well and truly over’, but we also flagged earlier that staying beyond midterms could complicate Trump’s task of replacing him with a dove like Miran if Democrats manage to flip the Senate.

Three participants –Logan, Kashkari and Hammack– dissented against the Fed’s current easing bias.

That said, all three have been firmly in the FOMC’s hawkish camp for a while, as they vocally opposed the latest rate cut already last fall. Powell specified no one in the committee argued for a hike, and majority did not want to send a signal that a hike would be equally likely as a cut.

On the other hand, Powell emphasized the committee will not be even thinking about cutting for the next few months, as it waits to see both the effects of the energy supply shock and whether tariff-driven inflation begins to fade.

We still think the Fed will eventually resume its easing cycle with two final cuts in September and December.

The war in Iran hurts the economy where we see it as already vulnerable to setbacks – in private consumption via lower disposable income, and in non-AI investments via higher interest costs.

Bond yields continued to rise during the press conference, and not just because inflation expectations are following oil prices. The 10y real swap rate is even above its pre-war levels.

The bottom line is tighter financial conditions are already weighing on the growth outlook even without explicit policy stance tightening.

Neither the statement nor Powell touched upon the Fed’s balance sheet, but we expect further guidance on the T-bill Reserve Management Purchases in the minutes.

Earlier guidance suggests purchase amounts will continue to decline sharply in May.

Corporate news in Australia

-Rumours persist of an Atlassian takeover by Anthropic

-ANZ Bank ((ANZ)) buys out Worldline to take full control of merchant payments

-Altered Capital is the final bidder for Fletcher Living backed by Goldman Sachs

-Qscan sale narrows to a few bidders with valuation above NZ$800m

-Aldi profit drops -20% amid supermarket price war with Coles Group ((COL)) and Woolworths Group ((WOW))

-President Trump criticism escalates Big Tech regulatory tensions in Australia

-Lineage explores options for its $2.5bn Asia-Pacific business

-Tabcorp ((TAH)) bans professional gamblers

-Firmus IPO timing remains uncertain

-APRA urges banks to strengthen AI cyber defenses

-Meta admits deleting key evidence in dispute with Andrew Forrest

On the calendar today:

-NZ April ANZ Business Confidence

-AU March Private Sector Credit

-JP March Indust prod’n

-JP March retail sales

-CH April PMI

-EZ 1Q GDP

-EZ April CPI

-EZ ECB Rate Decision

-EZ March Unemployment

-UK BoE rate decision

-US 1Q2026 GDP

-US 1Q2026 Personal Consumption

-US US Jobless Claims

-ACTINOGEN MEDICAL LIMITED ((ACW)) ex-div 2.00c (100%)

-AMCOR PLC ((AMC)) 3Q26 Earnings report

-BOSS ENERGY LIMITED ((BOE)) Qtr Update

-CAPSTONE COPPER CORP. ((CSC)) AGM

-DETERRA ROYALTIES LIMITED ((DRR)) Qtr Update

-EBOS GROUP LIMITED ((EBO)) investor briefing

-IGO LIMITED ((IGO)) Qtr Update

-ILUKA RESOURCES LIMITED ((ILU)) AGM

-LIONTOWN LIMITED ((LTR)) Qtr Update

-MINERAL RESOURCES LIMITED ((MIN)) Qtr Update

-ORIGIN ENERGY LIMITED ((ORG)) Qrtly Report

-STOCKLAND ((SGP)) Qtrly Update

-WOOLWORTHS GROUP LIMITED ((WOW)) Qtrly Update

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.

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