Insignia Scores a Third Suitor

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Welcome to Equity Espresso’s Market Recap.

The Australian share market rebounded on Wednesday, with the S&P/ASX 200 index rising 0.5% to 8,416.9 pts. while the All Ordinaries gained 0.6%, recovering some ground after Monday's 1.8% decline. Eight out of eleven sectors finished higher in the first positive session of the week.

Materials (+1.61%) stocks led the gains after China's retaliatory tariffs on U.S. imports were less severe than anticipated, with coal miners benefiting from expectations of higher prices. Energy (+1.47%) stocks made gains as Coronado Global Resources rose 1.53%, Whitehaven Coal gained 2.46%, and Stanmore Resources increased 1.85%. The positive sentiment was reinforced by broad commodity price increases, with gold reaching a new record above $US2,855 per ounce, while iron ore and copper prices both rose.

Healthcare (-0.55%) was the biggest laggard on the market, with CSL (-1.17%) and Fisher & Paykel (-2.17%) both falling.

Insignia Financial (+6.94%) shares surged after Brookfield joined the bidding war with a $4.60 per share offer, valuing the company at $3.1 billion and matching previous bids from CC Capital and Bain Capital. Brookfield's proposal includes an option for scrip in its unlisted vehicle and remains subject to due diligence and board approval.

Company News

• Amcor (+2.93%) shares rose after reporting December quarter net sales of $US3.241 billion and a 2.3% increase in sales volumes. Net income climbed to $US167 million from $US136 million, with adjusted earnings per share up 5% to 16.1¢, meeting expectations and allowing the company to maintain FY25 guidance.

• Centuria Office REIT (+0.44%) maintained its FY25 guidance despite first-half funds from operations dropping to $34.7 million from $41.8 million year-over-year. While losses decreased to $21.2 million from $99.4 million, net assets fell to $1.9 billion, with the company projecting funds from operations of 11.8 cents per unit.

• Cleanaway Waste Management (-) has temporarily closed its Sydney liquid waste facility following a significant fire. While no injuries were reported, the company is working with authorities on cleanup and seeking alternative customer processing solutions.

   

Wall Street

U.S. markets advanced on Tuesday as sentiment improved after Donald Trump delayed tariffs on Canada and Mexico for 30 days in exchange for border and crime concessions. However, new 10% tariffs on Chinese imports took effect, with China implementing retaliatory measures. The NASDAQ (+1.35%) was the best-performing indices, followed by the S&P500 (+0.72%) and Dow Jones (+0.30%).

Energy (+2.18%) stocks led the gains, while Utilities (-0.88%) and Consumer Staples (-0.51%) declined.

Palantir (+23.99%) shares surged to a record high after beating Q4 expectations with earnings of 14 cents p/s and $828 million in revenue. The AI-focused company also provided strong guidance, projecting full-year sales of $3.74-3.76 billion - ahead of estimates of $3.52 billion. Spotify (+13.24%) shares jumped after reporting its first profitable year, with 2024 net income reaching €1.14 billion. Q4 revenue hit €4.24 billion as monthly active users grew to 675 million, while the company paid record industry royalties of $10 billion.

Berkshire Hathaway (+0.62%) increased its stake in Sirius XM (+2.58%) to 35.4% after purchasing 2.3 million additional shares for $54 million.

S&P500 Sector Performance

Economic Data

• The China General Services PMI unexpectedly declined to 51.0 in January 2025, down from December’s seven-month high of 52.2 and below market forecasts of 52.3.

• South Korea's Inflation rate rose to 2.2% in January 2025, up from 1.9% in December, marking the highest level in six months.

• U.S. Job Openings fell by 556,000 to 7.6 million in December 2024, missing the market expectation of 8.0 million and indicating a gradual cooling of the labour market.

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Quick Singles

🌎️ Around The Globe

• The Australian government has ordered all departments to remove and block DeepSeek A.I. products from government systems and devices, citing security concerns about the Chinese startup's applications and web services.

• General Motors announced plans to cut approximately half of the remaining staff at its Cruise robotaxi unit, following its decision to stop funding the operation after investing over $10 billion since 2016.

• SoftBank announced a major partnership with OpenAI, committing $3 billion annually to access OpenAI's technology suite, including ChatGPT Enterprise and new features like Deep Research.

• Ontario has cancelled its $68 million Starlink contract in response to Donald Trump's impending 25% tariffs on Canadian imports.

• Stripe has completed its largest acquisition, purchasing Bridge Network for $1.1 billion in a strategic move into stablecoins. The deal brings Bridge's 60-person team to Stripe's San Francisco headquarters for integration.

• President Trump signed an executive order to establish a U.S. sovereign wealth fund within a year, suggesting it could acquire TikTok. The fund would align the U.S. with other nations using government funds for direct investment.

Markets

ASX Company Movers

Commodity Prices

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Forex

Global Health Check

ETF Prices

🔍️ ETF Watch

An intriguing new ETF to keep an eye on:

VanEck launched Australia's first equity long-short ETF (ASX: ALFA) on January 23, 2025, offering investors access to an actively managed portfolio combining both long and short positions in Australian equities.

The fund analyses thousands of real-time data points to identify statistical probabilities for stock performance. Using a combination of quantitative and technical trading signals and macroeconomic data, ALFA ranks approximately 230 ASX stocks on a zero-to-one scale, selecting its highest conviction positions.

Australian Index

Australian Sectors

Global Indices & Sectors

Global Strategy

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Fixed Income

Mixed Assets

Geared

*1-year, 3-year and 5-year returns are calculated as of December 31, 2024.

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DISCLAIMER: Please note that the information provided in this newsletter is for educational purposes only and should not be considered financial advice. It is not intended to encourage you to buy/sell assets or make economic decisions. We strongly recommend conducting your research before making any investment.