The Overnight Report: April’s Gone, Hello May

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This story features WOOLWORTHS GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: WOW
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

US markets powered to fresh all time highs on Thursday with the S&P500 up 10% and Nasdaq up 15% over April.

What war? Some might be pondering?

In contrast, the ASX200 fell for an eighth straight session on Thursday, as inflation woes and rising interest rates continued to weigh on stocks. 

For a positive change, ASX futures are pointing sharply higher for the final session of the week (and the first of May).

Good Morning,

The ASX200 fell for a eighth straight session on Thursday, down -21 points or -0.25% to 8,666.

Woolworths Group ((WOW)) shares, down -7%, dragged down consumer staples by -5%, and made it the weakest sector on the day.

In a grim headline, the AFR reported on Thursday the ASX200  was experiencing its longest losing streak since 2018 as Brent Crude hit US$126/bbl.

Overnight, the S&P500 reached a new fresh high, up 10%. Apparently, the S&P500 had its second best April since 1950.

March quarterly updates continue today with Coles Group ((COL)) and ResMed ((RMD)), as well as interim results from ANZ Bank ((ANZ)).

ResMed shares in aftermarket US trading are under pressure despite early assessments by analysts the medical device manufacturer yet again delivered a strong result, with many metrics above forecasts.

But it wasn’t perfect. And maybe that’s where trading algos might gain the upper hand in the immediate aftermath.

The early take from RBC Capital:

“RMD has delivered a good result that was a slight beat to RBCe and consensus across the majority of metrics.

“Whilst Americas devices missed RBCe and consensus estimates and RoW devices growth met expectations, growth within masks was a highlight with Americas a 3.4% beat to consensus and RoW 2.6% above consensus.

“Additionally, steady progression of gross margin continued for RMD coming in 30bps above consensus estimates. We expect RMD’s sound result to be well received by the market, albeit the announcement regarding the retirement of CFO, Brett Sandercock, and Americas devices growth miss may offset some of the gains.”

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

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

The Buried Story In today’s GDP

GDP came in at 2 against the 2.2 estimate, but that’s the headline everyone got.

The buried number is business investment contributing 1.48 points of growth versus 1.08 from consumers.

The consumer normally drives two-thirds of US activity.

AI capex is showing up in the actual GDP math now, not just narrative.

Dow Beat Nasdaq Today And CAT Is Why

Dow added more than 700 points while the Nasdaq lagged.

Caterpillar is the second-largest component in the Dow by weighting.

Its quarter pulled the index higher while Nvidia dragged on the Nasdaq.

The rotation into industrial AI infrastructure is real money moving.

Apple Closes The Cycle

Apple reports after the bell. iPhone revenue is expected to clear US$56.5 billion.

Margins are the question because of memory cost pressure.

I want to hear how Ternus talks about Siri and AI, since that’s the real overhang going into September.

(Apple shares are trading up 3.6% in after hours trading)

NAB Markets Today Research extract

US growth disappointed consensus but was deemed good enough by equity investors, with the S&P500 extending to fresh highs — tech earnings being a big factor too.

Apple’s after-the-bell results will add to that momentum.

The Iran conflict remains deadlocked, with no ground ceded publicly by either side.

The new Ayatollah, Khamenei, said in a written statement to mark Persian Gulf National Day that Iran regarded its “advanced technologies” in the nuclear and missile realms as sacrosanct.

Earlier, President Trump had reportedly received briefings on options for escalating hostilities that do include troops on the ground.

The Bank of England held Bank Rate at 3.75% in an 8–1 vote. The emphasis was firmly on second-round risks rather than headline energy prices.

The Monetary Policy Committee laid out three economic scenarios, ranging from no persistence to an adverse case that would require forceful tightening and see a sharp rise in unemployment.

Several members leaned toward Scenario B: energy prices stay higher for longer than futures imply, generating modest second-round effects, but existing policy restrictiveness, weaker demand and labour market slack are still sufficient to bring inflation back toward target without immediate tightening.

Nevertheless, Bailey stressed policy should not wait too long to act, but also noted firms are struggling to pass costs on, leaving rates on an “active hold”.

The ECB left the deposit rate at 2.00% but sharpened its risk framing, warning that upside inflation risks and downside growth risks have intensified.

Lagarde described the outlook as highly uncertain, while insisting long-term inflation expectations remain anchored despite rising short-term measures. 

NAB sees the communication as a cautious nod toward our expected June hike, with the next six weeks positioned as the key decision window.

Eurozone data pointed to fading momentum alongside easing underlying inflation. Q1 GDP printed just 0.1% q/q, dragged by a weak French outcome with flat output and soft domestic demand, only partly offset by firmer but still fragile German growth. 

April flash EZ HICP came in at a “high” 3.0% y/y, but energy drove the upside, while services inflation slowed and core eased to around 2.2%, keeping the growth–inflation trade-off firmly in focus for the ECB.

US data pointed to slower underlying momentum despite a respectable, albeit below-consensus, Q1 GDP growth outcome of 2.0% annualised. A rebound in federal spending as shutdown effects unwound was a major support.

Nevertheless, consumption growth has roughly halved since mid-2025 as real household incomes stagnate and the saving rate falls.

Offsetting that, business investment remains a clear bright spot, surging on AI-related equipment and software spending, though much of the demand is met offshore, leaving net trade a sizeable drag on growth.

US March spending held up thanks to a temporary boost from tax refunds and farm incomes, but that support is set to fade in coming months. 

Core PCE rose around 0.3% m/m in March, lifting the annual rate further above target even as wage growth continues to ease. Weekly jobless claims improved, but broader hiring indicators remain soft and energy shocks typically hit labour demand with a lag.

Overall, the mix of slowing consumption, firm investment and sticky inflation reinforces a Fed-on-hold outlook for now.

Global bond markets rallied as risk-off fears unwound and central bank messaging proved no more hawkish than expected. US Treasuries bull flattened, with the 2Y down -7bp and the 10Y down -4bp to 4.39%, aided by the pullback in oil prices. 

European and UK curves also bull steepened, as 2Y yields fell around -10bp and 10Y yields declined -6 to –7bp, reflecting relief that BoE and ECB hold decisions did not accelerate tightening expectations.

US equities closed April at record highs, with the S&P500 up more than 10% for its best month since late 2020, while Europe’s Stoxx600 rose 4.8% in April, its strongest monthly gain in over a year. 

Markets were buoyed by resilient earnings, AI-led capex momentum and falling oil prices. For now, US and European equities continue to look through macro uncertainty.

In FX, some harsh words from Japanese officials appear to have preceded official intervention after USDJPY rose through 160 yesterday. Vice finance minister Mimura issued speculators a “final advisory if you want to escape”, before USDJPY fell from 160.4 to just below 156 in the space of two hours.

The Nikkei reported the MoF had intervened to purchase JPY. 

The move coincided with the US dollar posting its worst month since June, down -1.9% on the Bloomberg Dollar Spot Index, as safe-haven demand from March unwound.

AUDUSD is steady near 0.72, closing out a gain of more than 4% for April.

Federated Hermes, Paul Dalton, US Earnings Season

Mega-cap tech earnings from Alphabet, Amazon, Microsoft and Meta reinforced a familiar headline: strong revenue growth, sharply higher capex, persistent capacity constraints and rising demand for agentic AI and compute.

After a year of alternating hype and caution, however, this season feels more like a “show-me” moment.

Fundamentals are becoming increasingly important. It is no longer sufficient simply to have exposure to the AI theme; capital discipline and valuation are under greater investor scrutiny, with an increasing focus on execution, returns and margin sustainability.

Cloud performance remains strong across platforms, but the relative winners are increasingly those with diversified business models and deep ecosystems, such as AWS within Amazon and Google’s Gemini, which are viewed as increasingly valuable as enterprise demand for agentic AI scales.

Beyond tech, earnings commentary suggests the Iran conflict is feeding through in a more uneven, sector-specific way, reinforcing dispersion in earnings, guidance and market leadership.

Energy companies remain clear beneficiaries, while some consumer and industrial firms are beginning to flag second-order margin and demand risks into H2, which could become more pronounced if the conflict persists in to summer.

Corporate news in Australia

-Balckstone-backed Xpansiv is looking at a US$150m raising

-A.H. Beard collapse highlights pressure on Australian manufacturers

-APRA warns financial institutions lag on AI risk preparedness

-Leonardo AI founders deploy proceeds into new venture capital fund

-Sydney considers banning short-term rentals such as Airbnb

-Imricor Medical Systems ((IMR)) launches $60m capital raising

-PwC accused of overlooking risk signals in Corporate Travel ((CTD)) audits

-JBS faces $268m tax bill following audit despite strong profits

-AirTrunk invests $4.2b in Malaysia expansion

-New South Wales launches $4m program to support women startup founders

-Australia’s AI push seen as too focused on data centres over higher value opportunities, according to Blackbird

-Alceon advances $250m private capital strategy under new leadership

-Banks bad debt provisions may be weaker than they appear

-Siren Gold ((SNG)) expands large antimony-gold system in New Zealand

-Airwallex losses widen despite revenue surpassing $100m

-Nine Network ((NEC)) unveils plan to make TV news more cost efficient

On the calendar today:

-NZ ANZ Cons confidence

-AU 1Q PPI

-US April ISM manufacturing

-XX China, Germany Public Holiday

-XX China, Germany Public Holiday

-ANZ GROUP HOLDINGS LIMITED ((ANZ)) 1H26 earnings report

-COLES GROUP LIMITED ((COL)) Qtrly Update

-LIONTOWN LIMITED ((LTR)) Qtrly Update

-RESMED INC ((RMD)) 3Q26 Report

-SUMMERSET GROUP HOLDINGS LIMITED ((SNZ)) investor briefing

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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