ASX to rise, S&P 500 hits fresh record high + Inghams, IAG and QBE to report

ASX 200 futures are trading 72 points higher, up 0.95% as of 8:30 am AEDT.

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S&P 500 SESSION CHART

ASX TODAY

• ASX 200 set to rally after a strong lead from Wall Street and lower bond yields/dollar
• Companies to report today include ASX, Baby Bunting, Cleanaway Waste Management, GQG Partners, Insurance Australia Group, Integral Diagnostics, Inghams, IPH and QBE Insurance
• QBE FY consensus – Adj cash profit of $1.4bn, Gross premiums written $22.0bn
• Cleanaway H1 consensus – Adj EBITDA of $365m, Underlying NPAT of $85.2m
• Wesfarmers could be ready to pursue a major acquisitions (The Australian)
• CBA ordered by Federal Court to pay $10m fine over wage theft (AFR)
• Data#3 downgraded to Neutral from Buy at UBS however target price increased to $8.40 from $8.20
• Whitehaven Coal upgraded to Neutral from Underweight at Barrenjoey but target price decreased to $7.15 from $7.30
• Wesfarmers downgraded to Underperform from Outperform at CLSA but target price increased to $60.40 from $56.82
• Goodman Group downgraded to Neutral from Buy at UBS but target price increased to $29.25 from $26.50
• GUD Holdings upgraded to Buy from Neutral at Citi but target price decreased to $12.80 from $12.90
• AMP upgraded to Buy from Neutral at Citi and target price increased to $1.25 from $0.90

MARKETS

• S&P 500 finished higher, just off best levels
• US markets experienced a relatively broad-based rally, the technology sector was the only laggard after a mix session for big tech
• Russell 2000 continues to outperform, rallying to a year-to-date high and less than 1% off a 22-month high
• Hedge funds add some big tech names in Q4, while cutting Nike and Pfizer, 13F filings show (Bloomberg)
• Wall Street traders make long shot bets on China market recovery (Bloomberg)

STOCKS

• OpenAI developing web search product to challenge Google (The Information)
• Cisco to lay off 5% of workforce after sales forecast underwhelms (Bloomberg)
• AI optimism boosts TSMC to become world's 12th largest company (Bloomberg)
• Apple planning AI-related hardware upgrades for iPhone 16 (9to5Mac)
• Berkshire pared stake in Apple, slashed holdings in HP and Paramount (FT)
• Nvidia reveals stakes in Arm Holdings, SoundHound and biotech firm Recursion Pharmaceuticals (Bloomberg)
• Ford CEO says they will carefully think about where to manufacture after UAW strikes (AP)
• Lucid cuts price of its Air luxury EV in order to boost demand (Reuters)

CENTRAL BANKS

• Fed's Barr stresses need for careful approach on rate cuts, wants to see more data on inflation (Bloomberg)
• ECB's Lagarde cautions against rushing into rate cuts as rising salaries keep inflation hotter (Bloomberg)
• RBA Governor Bullock notes encouraging progress on inflation (AFR)

GEOPOLITICS

• US warned allies about Russian space, nuclear capabilities (Reuters)
• Putin says Biden a better reliable alternative to Russia than Trump (Bloomberg)
• Iran says gas pipeline explosion was an act of sabotage (ABC)
• Israel launches largest assault in southern Lebanon since start of Gaza war following Hezbollah rocket barrage (Washington Post)
• Israel pulls out of Gaza peace talks over unreasonable demands (Bloomberg)
• Trump weighs scaling back commitments to NATO members who fail to hit defence spending goals (Bloomberg)

ECONOMY

• US headline retail sales declined 0.8% in January, worse than consensus for a 0.1% month-on-month drop (Reuters)
• UK economy ended 2023 in recession (Reuters)
• Japan GDP contraction puts economy in technical recession (Reuters)
• EU cut its growth outlook, economy starts 2024 on a weak footing (FT)
• Australian unemployment rate hits two-year high of 4.1% (Bloomberg)
  
  

Charts of the Week

Setting the scene: Markets have seemingly shrugged off the hotter-than-expected US inflation data and does not seem to mind the repricing of rate cut expectations (4 by year-end, down from 6 a few weeks ago). There's a bit of a rotation at the moment from big tech to small caps (Russell 2000 outperformance of Nasdaq). Let's see if this trend carries over to our markets. We're in the thick of reporting season, so charts may rip or dip on results. This week's charts are a bit all over the place. As always, these are for educational purposes, always do your own research.

Charts we mentioned last week (last wee's wrap here)

Accent Group (ASX: AX1) turned into a textbook breakout, up around 11% between Mon-Wed. The breakout was boosted by strong results from peers like JB Hi-Fi. It experienced a 3% pullback on Thursday.

Botanix Pharmaceuticals (ASX: BOT) had a fairly uneventful week. Still chopping and eyeing a higher high.

Suncorp (ASX: SUN) is grinding higher, ever so slowly. Like I've mentioned in the past two weeks, insurance stocks like to chop around like no tomorrow. Insurers like IAG and QBE are due to report today, which will provide an important read-through for SUN.

Interesting charts from this week

Life360 (ASX: 360) a rather choppy chart but working through a recent low.

Inghams (ASX: ING) earnings are in a massive upgrade cycle. It has experienced several textbook breakouts in recent months. Currently settling after a big move out in early January. Also due to report today.

Wisetech (ASX: WTC) likely rallied on Thursday after Altium received a takeover. Pushing out from a choppy two months of consolidation.

Webjet (ASX: WEB) hit a six month high on Thursday. Chart appears a little overextended but constructive (not too volatile, breaking out after two months of sideways movement).