ASX Live Coverage Summary – 14 May

Introduction
Greetings! Welcome to our live coverage of the ASX for 14 May. We are testing a new format—please refresh the page for the latest updates and share your feedback with us.

ASX Job Cuts

[8:55 am | AFR]
The Australian Securities Exchange (ASX) is set to reduce its workforce by approximately 100 positions, equating to 8% of its staff. This decision comes as part of a broader strategy to manage expenses more effectively and redirect investments in light of ongoing financial challenges and regulatory pressures. Read more here.

Broker Updates

[8:45 am]
Further broker updates will be provided later in the day. Current notable ratings include:

• CSL: Buy maintained; price target adjusted to $304.6 from $307.3 (Goldman Sachs).
• Life360: Buy rating retained; target raised to $31 from $27 (Goldman Sachs).
• Macmahon Holdings: Initiated as Buy with a target of $0.40 (Barrenjoey Partners).

Bank of America May Global Fund Manager Survey

[8:50 am]
The latest Bank of America Global Fund Manager Survey reveals a modest improvement in market sentiment with approximately 75% of responses collected prior to the recent US-China trade discussions. Key insights include:

• Improvement in Global Growth Outlook: The perception of weaker growth decreased from 82% to 59% this past month.
• Market Sentiment Shift: The ‘soft landing’ scenario now outbalances the ‘hard landing’ outlook.
• Cash Reserves: Average cash holdings stood at 4.5%, slightly down from previous months but still below long-term averages.
• Trade War Concerns: Concerns around a global recession from trade conflicts remain high, with 62% of participants identifying it as a significant risk, down from an alarming 80% the prior month.
• US Equity Exposure: There is a notable decrease in allocation to US equities, with a net 38% underweight—a two-year low.
• Crowded Trades: Long positions in gold have replaced previous trends, becoming the most crowded trade.

Highlights from Livewire

1. US CPI Report Analysis
   The April Consumer Price Index (CPI) reported an annual inflation rate of 2.3%, marking the lowest increase since February 2021. However, newer trade policies may render this data somewhat outdated, suggesting a need for caution in interpreting current inflation trends.

2. REA Group Performance
   The REA Group reported a robust 12% year-on-year revenue growth, amounting to A$374 million, with yield growth strategies in place. Despite flat national listings indicating a potential downturn, the company remains focused on sustainable yield growth through premium products.

3. Life360 Financial Update
   Life360 reported a significant revenue increase of 32% to A$103.6 million in its March quarter. With a 26% growth in active users and a share price increase of 18%, the company’s strategy to expand its family safety ecosystem is proving successful.

Market Drivers

[8:40 am]
Global equities are showing an upward trend, influenced by easing US-China tariff tensions. Investors are encouraged by a more favourable inflation report from the US. Key takeaways from the report include:

• April Headline Inflation: Increased by 0.2% monthly, yielding a 2.3% annual rise, slightly under forecasts.
• Core Inflation Figures: Up by 0.2% monthly, consistent with annual projections at 2.8%.
• Stability in Key Sectors: Rent remained steady with slight declines noted in used car prices and airfares contributing to a broader positive sentiment.

Morning Market Overview

[8:40 am]
S&P/ASX 200 futures indicate a promising start with an 18-point increase (+0.21%), marking a sixth consecutive day of gains. For new readers, a recap of our morning insights is available for a quick catch-up.

Conclusion
As we progress through the trading session, keep an eye on market fluctuations in response to global economic events and corporate announcements.