ASX 200 to fall sharply, US stocks record worst month in 5 months

May 01, 2024 08:32

Livewire Markets

ASX 200 futures are trading 92 points lower, as of 8:20 am AEST.

It was bound to happen. After five months of consistent gains to end 2023 and start 2024, the US equity market recorded a month of losses. A combination of mixed earnings, concerns over the Fed's next move, and rapidly changing market sentiment sent stocks lower yesterday. 2-Year yields hit the highest since November, and are back over the psychologically important 5% level.

On the earnings front - Amazon (NASDAQ: AMZN)'s AWS business reported its best revenue growth in a year while Pinterest (NASDAQ: PINS) shares surged more than 20% following its earnings beat. On the downside, Starbucks (NASDAQ: SBUX)' Q1 results and guidance left a bitter aftertaste in its shareholders' mouths while chip maker AMD (NASDAQ: AMD) reported a near-50% drop in gaming revenues.

Let's dive in.

S&P 500 SESSION CHART

A brutal day of selling ended with an almighty slide in the final hour. (Source: TradingView)

OVERNIGHT MARKETS

Wall Street hit by Fed jitters to close wild April
Dow sheds 570 points as stocks seal awful April ahead of Fed interest-rate decision
‘Sell in May and go away’? This year the calendar ‘trick’ overlaps with a Biden-Trump rematch
Investors getting jittery about upcoming US presidential election with taxes, tariffs and debt the hot topics
Goldman Sachs says momentum traders are modelled to buy equities over next week regardless of market direction

INTERNATIONAL STOCKS

Amazon reports strong cloud unit sales on rising AI demand
Starbucks posts first sales drop since 2020 during global pullback
Binance founder CZ gets four months in prison
AMD’s gaming-chip sales drop nearly 50%, stock falls 3%
McDonald’s stock bounces as revenue beat, new ‘larger’ burger offset profit miss
3M’s stock surges toward a 14-month high after profit, sales beat expectations
Coca-Cola’s Q1 results beat top- and bottom-line estimates, boosted by ‘dynamic backdrop’
Eli Lilly’s stock jumps as Q1 profit tops estimates amid strong sales of its diabetes treatments Mounjaro, Zepbound
Apple poaches dozens of Google's AI experts, creates secretive European laboratory in Zurich
Samsung Electronics returns to profit for first time in two years; says AI demand to drive H2

CENTRAL BANKS

May Fed meeting messaging will revolve around higher for longer
Fed tightening impact limited by housing, equity market tailwinds for wealthier Americans
ECB's Knot says June rate cut realistic, citing declining inflationary pressure in the Eurozone
ECB VP Guindos notes of challenges for the central bank to achieve its inflation goal
PBOC takes steps to stop CGB bull market, unlikely to become buyer for now
Majority of Bank of Korea board members don't see any rush to cut interest rates

ECONOMY

US labour costs rise by most in year in sign of wage pressures
Eurozone inflation steady in April, paving way for June ECB rate cut
Europe's major four economies grow faster than expected in Q1, boosting revival hopes
China official non-manufacturing PMI softer than expected, Caixin manufacturing index firmer
China's top ruling lawmakers signal support for property and willingness to cut rates
Japan industrial production beats, retail sales disappoint, jobless rate unexpectedly steady
German retail sales up more than expected in March
Taiwan's economy expanded at the fastest pace in almost three years as AI demand boosts tech exports
South Korea activity data mostly soft, industrial production posts biggest drop in 15 months

GEOPOLITICS

Hope rises for renewed Gaza ceasefire as Israel lowers demands, Hamas urged to accept terms
ICC told arrest warrants for senior Israeli officials will be met with US retaliation
Tesla and TikTok highlight US-China battle of data which is just getting started

ASX TODAY

Keep an eye out on Nexgen Energy (ASX: NXG) shares as the dual-listed uranium miner is about to launch a $200 million equity placement.
In the meantime, Bapcor (ASX: BAP) is searching for (another) new CEO after Paul Dumbrell said he wouldn't take the job just two days before he was due to start.
And in private company news, another airline bites the dust - this time, Bonza entered voluntary administration and its fleet of aircraft has been repossessed.

Key Events

Companies trading ex-dividend:

Wed 1 May: DRA Global (DRA) – $0.11
Thu 2 May: WAM Strategic Value (WAR) – $0.022, Waterco (WAT) – $0.07, Acorn Capital (ACQ) – $0.028, Bank of Queensland (BOQ) – $0.17
Fri 3 May: None

Economic calendar (AEST):

8:45am – NZD – Unemployment change, unemployment rate
10:30am – JPY – Final manufacturing PMI
4:30pm – AUD – Commodity prices y/y
10:15pm – USD – ADP non-farm employment change
11:45pm – USD – Final manufacturing PMI

Overnight:

12:00am – USD ISM manufacturing PMI, JOLTS job openings, ISM manufacturing prices, construction spending
12:30am – USD – Crude oil inventories
4:00am – USD – Federal Funds Rate, FOMC statement
4:30am – USD – FOMC Press conference

This Morning Wrap was written by Hans Lee and Chris Conway.

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