ASX 200 Set to Decline as S&P 500 Snaps Losing Streak and James Hardie Unveils $14bn AZEK Merger

Highlights

• ASX 200 futures signal a drop of 41 points (-0.51%) amid weak breadth across global markets
• James Hardie Industries (ASX:JHX) announces a landmark US$8.75 billion acquisition of US-based AZEK
• S&P 500 ends four-week losing streak with a modest rebound, despite underwhelming earnings and stagflation concerns

The Australian share market is poised to open lower, with ASX 200 futures indicating a 41-point dip (-0.51%) as of early morning trade. Despite a positive end to the week on Wall Street, weak market breadth and ongoing macroeconomic uncertainties continue to cast a shadow. A major development emerged with James Hardie Industries (ASX:JHX) announcing a transformative acquisition of US-based building materials company AZEK, valued at US$8.75 billion.

US indices finished the week in positive territory, ending a four-week streak of losses. The Dow Jones Industrial Average rose 1.20%, the Russell 2000 added 0.63%, the S&P 500 gained 0.51%, and the Nasdaq edged up by 0.17%. This upward momentum occurred despite weak breadth, with a significant proportion of stocks ending lower on the day. Key bullish drivers included a dovish tone from Federal Reserve Chair Jerome Powell, ongoing consumer strength as noted by the Bank of America CEO, and optimism surrounding a slowdown in tariff escalation from the Trump administration.

Offsetting this optimism were renewed fears of stagflation. The Federal Reserve’s Summary of Economic Projections (SEP) cut its 2025 GDP growth forecast by 0.4 percentage points to 1.7%, while raising its core PCE inflation forecast by 0.3 percentage points to 2.8%. Corporate earnings further added to investor caution, with disappointing results from companies including Lennar, Accenture, FedEx (NYSE:FDX), and Nike (NYSE:NKE). FedEx downgraded guidance amid cost and demand headwinds, while Nike warned of margin pressures despite beating top- and bottom-line expectations.

Micron Technology (NASDAQ:MU) provided a more positive outlook, guiding revenue above expectations thanks to robust demand for high-bandwidth memory chips. In other developments, the anticipated IPO of CoreWeave was reportedly oversubscribed, potentially raising up to US$2.7 billion.

Currency movements also played a role in market sentiment. A significant drop in the US dollar raised concerns for foreign investors, particularly those with substantial exposure to US equities. Chinese markets slumped as traders looked for fresh catalysts following a recent rally.

In Australia, attention turned to the landmark merger between James Hardie Industries (ASX:JHX) and AZEK. The acquisition will be structured with a mix of cash and shares, giving AZEK shareholders US$26.45 per share and 1.034 ordinary shares in JHX. Post-transaction, JHX shareholders will own 74% of the combined entity, with AZEK shareholders owning 26%. The transaction is expected to accelerate net sales and adjusted EBITDA by 250 and 300 basis points respectively over the next five years. The return on invested capital is forecast to exceed JHX’s cost of capital in the medium term. The deal is subject to shareholder approval and is projected to close in the second half of FY25. James Hardie also announced plans for up to US$500 million in share buybacks within 12 months of closing.

Elsewhere, Helia Group (ASX:HLI) revealed that the Commonwealth Bank of Australia (ASX:CBA) has entered exclusive negotiations with another provider for lenders mortgage insurance (LMI) services. CBA accounted for approximately 44% of Helia's gross written premiums in FY24.

Lottery Corporation (ASX:TLC) announced that its CEO, Sue van der Merwe, will retire at the end of 2025. Meanwhile, Mineral Resources (ASX:MIN) resumed Onslow haulage operations as of March 21 and reaffirmed its FY25 Onslow iron volume guidance.

In commodities and sector-based trading, ETFs reflecting Nickel, Copper Miners, and Steel each declined by 2.0% to 2.5%, signalling weakness despite the broader indices closing higher. The divergence between index performance and market breadth highlights investor caution heading into the next reporting cycle.

Supermarket giants Woolworths Group (ASX:WOW) and Coles Group (ASX:COL) surged 5–6% on Friday following the final report from the Australian Competition and Consumer Commission (ACCC), which cleared them of price gouging allegations. This verdict provided a relief rally for Woolworths, which had underperformed Coles significantly over the past year. Historical analysis of past regulatory reviews—such as those involving banks, Qantas (ASX:QAN), and childcare—suggests related stocks tend to rally in the months following final reports, with an average gain of around 17% within 100 trading days.

On the global stage, trade and geopolitical developments remain prominent. Former US President Donald Trump signed an executive order aimed at boosting domestic production of critical minerals, with the Defense Production Act providing financing support. Additional orders include initial steps to shut down the Department of Education, pending Congressional approval. Trump's latest tariff announcements appear more measured, excluding some sectors and countries, potentially reducing immediate market disruption.

China, meanwhile, is navigating its own strategy in response to trade tensions. Discussions are reportedly underway to reduce exports of electric vehicles and batteries to the US, potentially to gain leverage in tariff negotiations. Beijing will also host US Senator Steve Daines in the first high-level dialogue with a Communist Party official since Trump's return to political prominence. China has announced plans to add cobalt and copper to its strategic reserves, while Japan and China are set to resume bilateral economic talks for the first time in six years.

Germany's Bundesrat is preparing to vote on a historic €500 billion spending package designed to reinvigorate its economy, while Japan’s February core inflation figure of 3.0% exceeded expectations, raising the likelihood of future rate hikes.

Central bank commentary continues to guide rate expectations. The Bank of Canada Governor noted that inflation risks from tariffs may limit the scope for rate cuts. Meanwhile, pre-election budgetary measures in Australia may temper expectations of monetary easing by the Reserve Bank of Australia.

The global macroeconomic outlook remains clouded by conflicting signals—while markets are recovering from recent lows, underlying fragilities persist. Broad market participation remains thin, suggesting a cautious approach among institutional investors. In the days ahead, investor focus will likely remain on geopolitical developments, central bank policy cues, and upcoming corporate earnings.