Trump Mulls Aussie Tariff Exception: Gold Soars While Lithium Sours

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Welcome to Equity Espresso’s Market Recap.

The Australian share market edged slightly higher on Tuesday, with the S&P/ASX 200 index gaining 1.2 points to finish at 8,484.1, as seven out of eleven sectors advanced, led by Industrials (+0.98%) and Technology (+0.89%).

Tariff Update - Following talks between Prime Minister Albanese and President Trump, Australia may secure exemption from new U.S. metal tariffs. Trump cited Australia's trade deficit with the U.S. and military aircraft purchases as favourable factors.

Macquarie Group provided market support, rising 1.60% to $231.54 after confirming it was on track to meet full-year guidance. Healthcare (-2.94%) stocks led market declines, as CSL (-4.95%) dropped following its half-year report showing weak vaccination sales due to low U.S. immunisation rates.

Gold miners surged as the precious metal crossed US$2,900/oz, hitting new record highs riven by strong safe-haven demand amid mounting trade tensions and economic uncertainty. Evolution Mining (+4.89%), De Grey Mining (+3.88%), and Northern Star Resources (+4.04%) posted solid gains.

Lithium stocks faced significant pressure on the news that Chinese E.V. battery manufacturer giant CATL was set to restart operations, sparking concerns about downward price pressure. Liontown Resources (-9.09%), Mineral Resources (-6.93%) and Plibara Minerals (-3.64%) were some of the hardest hit.

Company News

• Breville (-2.20%) reported a 16% increase in half-year net profit to $97.5 million and raised its dividend to 18¢ from 16¢ while forecasting 5-10% earnings growth for FY25.

• CSL (-4.95%) reported a 7% increase in first-half profit to $US2.01 billion despite weak U.S. vaccination sales, supported by strong plasma business performance. The company maintained its FY25 guidance of $US3.2-3.3 billion earnings and raised its interim dividend 9% to $US130 per share.

• Charter Hall Social Infrastructure REIT (+8.53%) upgraded its FY25 distribution guidance to 15.2¢ per unit and announced a $25 million share buyback program after reporting half-year operating earnings of $28.5 million.

• Ramsay Health Care (+1.43%) announced a £151 million ($305 million) goodwill impairment charge for the December half while releasing $64.5 million from a French tax provision. The company expects first-half earnings before tax of $490-500 million and net profit of $150-160 million.

• Region Group (-2.29%) returned to profitability with an $81.8 million half-year net profit, reversing last year's $35 million loss, while assets under management grew 8% to $5.2 billion. The suburban mall owner's shares traded at $2.18.

• Seven West Media (+6.06%) reported a 67% drop in half-year profit to $18 million, impacted by $20 million in restructuring costs and reduced advertising spending. While digital audiences grew significantly, with streaming up 43% and online news readership rising 10.6%, traditional TV viewership declined 1.8%.

• SGH Ltd. (+6.15%) reported a 134% increase in net profit to $526 million and raised its interim dividend 30% to 30 cents, driven by Boral's strong performance with EBIT up 29% to $259 million.

Wall Street

U.S. markets advanced on Monday, with the Nasdaq (+0.98%) leading the major indices, followed by the S&P 500 (+0.67%) and Dow Jones (+0.38%). Strong performances from A.I.-related stocks like Nvidia (+2.87%) and Broadcom (+4.52%) helped lift the market. Energy (+2.15%) stocks saw a lift thanks to rising oil prices, while Technology (+1.45%) was another strong performer.

Steel and aluminium producers rallied significantly after Trump announced 25% tariffs on metal imports, with Cleveland-Cliffs (+17.93%) surging, Century Aluminum up 10.22%, and major steel producers like Nucor, U.S. Steel, and Steel Dynamics each gaining over 4%.

McDonald's (+4.80%) shares rose despite revenue missing estimates at $6.39 billion, as same-store sales growth of 0.4% exceeded expectations of a 1% decline. While earnings met forecasts at $2.83 per share, investors were encouraged by management's optimistic 2025 outlook despite recent E. coli concerns. GameStop (+9.66%) shares surged after CEO Ryan Cohen shared a photo with MicroStrategy chairman Michael Saylor, fueling speculation about potential crypto initiatives.

S&P500 Sector Performance

Economic Data

• Australia’s NAB Business Confidence index jumped to 4 in January 2025 from -2 in December, marking the first positive reading since October.

• Australia's Consumer Sentiment Index saw a slight increase of 0.1% in February 2025, rising to 92.2 from 92.1 in January.

• U.K. Retail sales rose by 2.5% year-on-year in January 2025, a slowdown from the 3.1% increase in December but still well above market expectations of 0.2%.

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Quick Singles

🌎️ Around The Globe

• Accenture announced plans to eliminate its global diversity and inclusion targets. CEO Julie Sweet confirmed the company will phase out its 2017 diversity goals and demographic-specific career development programs.

• Elon Musk is leading a $US97.4 billion bid to acquire OpenAI's nonprofit parent organisation, aiming to return the company to its open-source roots.

• Egg prices in the U.S. have soared to record highs, reaching over $7.30 per dozen for large white eggs, nearly triple the price from last year. The surge, driven by a severe bird flu outbreak that has led to the culling of 70 million chickens, has prompted businesses like Waffle House to add surcharges and Trader Joe's to limit purchases.

• Meta plans to initiate global layoffs on Tuesday while accelerating recruitment for machine learning positions. The company will notify U.S. employees by Monday morning, while European workers in Germany, France, Italy, and the Netherlands are exempt due to local laws, with other international staff receiving notices through February 18.

• Netflix is reportedly exploring a bid for Formula One's U.S. broadcasting rights from 2026, potentially building on the success of its "Drive to Survive" series that has helped boost F1's global popularity.

• New Zealand announced plans to simplify investor visa rules by introducing two new categories for "higher-risk" and "mixed" investments. Immigration Minister Erica Stanford said the changes aim to attract foreign capital and expertise to boost economic growth.

• Sony's PlayStation Network experienced a major 24-hour outage over the weekend, affecting around 70,000 users. While the company attributed it to an "operational issue," their compensation of five extra PlayStation Plus days was met with mixed reactions from subscribers.

• SoftBank is reportedly finalising a $40 billion investment in OpenAI at a $260 billion pre-money valuation, to be paid over 12-24 months starting this spring. The deal would value OpenAI at $300 billion post-investment, with a potential syndication of $10 billion.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

Global Health Check

ETF Prices

🔍️ ETF Watch

Australian Index

Australian Sectors

Global Indices & Sectors

Global Strategy

Property & Infrastructure

Fixed Income

Mixed Assets

Geared

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

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