Resources Rally, While City Chic Gets Its Groove Back

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Equity Espresso
January 14, 2025 • Estimated Reading Time: 10 minutes

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Good Evening,

Welcome to Equity Espresso’s Market Recap.

The Australian stock market rebounded on Tuesday, with the S&P/ASX 200 index gaining 0.48% to close at 8,231.0 points, gaining back some of yesterday’s 1.2% decline. Eight out of eleven sectors finished positive, with Materials (+1.51%) and Real Estate (+1.18%) stocks leading the advance.

Mining giants benefited from iron ore prices climbing above US$100/t for the first time in two weeks, with Fortescue (+2.89%) and BHP Group (+1.44%) rising. Energy (+1.17%) was another top performer, boosted by Coal stocks, which saw significant gains despite recent price weakness. Whitehaven Coal (+6.61%) surged while Yancoal (+2.76%) posted solid gains.

Company News

  • City Chic (+14.58%) shares surged on the back of a trading update. Despite reporting a 3.6% drop in global sales revenue to $69.5m, a strong holiday trading period, particularly in ANZ (+9.0%), drove the share price higher. The company achieved significant margin improvements across all regions, with an 8.5% gross margin growth. EBITDA is provided to be $3-4m, marking a substantial recovery from the previous $4.4m loss.

  • Energy Transition Minerals (+16.28%) says it plans to visit Greenland in February to improve government relations amid ongoing legal disputes over its proposed rare earths mine in the Danish territory. The announcement comes after former foreign minister Julie Bishop was hired to advise the company.

  • Ingenia Communities Group (+15.04%) has raised its FY25 guidance, now targeting EBIT of $162-165 million (20-23% growth) versus previous guidance of $148-155 million. The company also increased underlying EPS targets to 29.0-30.0 cents from 24.4-25.6 cents, citing strong execution and first-half performance.

  • Mesoblast (-9.25%) shares fell after finalising a capital raise totalling $260 million at $2.50 per share. The proceeds will be used to fund the US commercial launch of its proprietary cell therapy Ryoncil.

  • PWR Holdings' (+2.15%) secured an $8.9 million U.S. government contract for advanced cooling solutions, marking its largest aerospace and defence order since entering the sector in 2020.

ASX Indices

ASX Sector Performance

Wall Street

It was a tale of two stories on the U.S. market Monday, with the Dow Jones (+0.86%) leading the way of the major indices, with the S&P 500 (+0.16%) managing to claw back from early losses to finish marginally higher. In contrast, the tech-heavy Nasdaq (-0.38%) declined, reflecting the ongoing pressure from elevated Treasury yields, which saw the 10-year note touching a 14-month high of 4.805%.

There was a clear rotation into cyclical and commodity-linked areas, as Energy (+2.25%) and Materials (+2.21%) sectors gained over 2%, while traditionally defensive sectors like Utilities (-1.19%) struggled alongside Technology (-0.87%).

Moderna (-16.80%) shares tanked after it reduced its 2025 sales forecast by $1 billion to $1.5-2.5 billion, down from the previous $2.5-3.5 billion guidance. Revenue will primarily come from Covid and RSV vaccines, with most sales expected in the second half of 2025.

U.S. Indices

Fear & Greed Index

S&P500 Sector Performance

Economic Data

  • Australian Building Permits fell by 3.6% month-on-month to 14,998 units in November 2024, reversing sharply from a 5.2% gain in the previous month and matching preliminary estimates.

  • Australian Consumer Sentiment decreased by 0.7% to 92.1 points in January 2025, marking its second consecutive monthly decline.

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Quick Singles

🌎️ Around The Globe

  • Amazon is scaling back its diversity and inclusion programs, citing a focus on "proven outcomes." VP Candi Castleberry announced in an internal memo that the company will phase out "outdated programs" as part of a broader initiative review.

  • Apple faces a £1.5 billion U.K. antitrust trial starting Monday, challenging its App Store's 30% commission fees. This marks the first major Big Tech class action lawsuit to reach British courts over alleged market dominance abuse.

  • Chick-fil-A is automating its drink-making process, eliminating approximately 10,000 labour hours daily across its restaurant network by replacing manual lemon squeezing with machines.

  • JPMorgan Chase is facing employee pushback on its return-to-office mandate, leading the bank to disable comments on an internal announcement after staff expressed opposition to ending remote work options.

  • A U.S. appeals court reinstated a lawsuit against Pfizer's diversity fellowship program by conservative group Do No Harm. The court reversed its previous ruling requiring plaintiffs to identify affected members by name in discrimination cases.

  • Robinhood's two broker-dealer units will pay $45 million to settle SEC charges over multiple securities law violations, including delayed suspicious activity reporting, inadequate identity theft protection, and insufficient cybersecurity measures.

Markets
ASX Company Movers

Commodity Prices

Bonds

Forex

Global Health Check

ETF Prices

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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 November 30 2024.

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