ASX Breaks Losing Streak as Gold Miners Crush

Good Evening,

Welcome to Equity Espresso’s Market Recap. A sight for sore eyes today with green on the boards to end a rough week. We reflect on market downturns and have added a new dedicated broker section in the newsletter. Reply to this email to let us know your thoughts on the refreshed newsletter. Enjoy!

Market Wrap

The Aussie market broke a three-day losing streak on Friday, marking the second-highest percentage gain in the last month, with the S&P/ASX200 index gaining 0.52% (40.6 pts.) to close at 7,789.70. Eight of the 11 sectors finished the day higher, with Utilities (+1.78%) continuing to be the best performer on the ASX this month, with AGL Energy (+3.51%) leading the charge today.

Materials (+1.65%) were another winner, rising as Iron Ore prices lifted, with the commodity up over US$102.0/t for the first time in a month. Fortescue (+2.65%) and BHP Group (+1.07%) saw solid gains. Spot Gold prices briefly tipped over US$3,000/oz and are currently trading around US$2,985/oz.

Aussie gold miners continue to outperform the market, led by strong gains today from Newmont Mining (+5.72%), Evolution Mining (+4.64%) and De Grey Mining (+3.96%).

We’ve added a new broker section in today’s newsletter, covering all the broker rating moves. Shaw & Partners have a new report on gold miner Ramelius Resources, which you can access. Citi Group remains positive on the REITs sector and sees the recent sell-off as a buying opportunity. Check out our broker section later in the newsletter to see which companies they have upgraded.

While it might feel all doom and gloom at the moment, remember, it’s sentiment and noise that drive market action in the short term. Pullbacks and corrections are expected—the good times never roll on linearly.

A declining stock market doesn't necessarily reflect the broader economy. In Australia, unemployment remains at historic lows, and GDP for the December quarter showed the strongest annual growth in over a year. Markets dislike uncertainty, and with the unpredictable tariff news dominating headlines, investors can't predict the economic consequences and retaliatory measures.

History shows, however, that markets always recover; it can just take a while, but it pays to be patient. In just a short time, we've seen the ASX200 index fall by:

• 6.8% from March to October 2023

• 14.7% between April and September 2022

• 36.5% in one month between February and March 2020

• 7.9% between October 2015 and April 2016

Not to mention the dot com bust or GFC. So, with all that said, what are you doing with your investment portfolio?

ASX Company News

• Ansell (+0.18%) has named Brian Montgomery, former GE HealthCare Chief Strategy Officer, as CFO, replacing Zubair Javeed, who left today.

• Catalyst Metals (+5.22%) has begun ore production at its Plutonic East mine in Western Australia, extracting its first stope ore on schedule and within budget. This is the first of three mines in Catalyst's $31 million plan to double production at its Plutonic gold belt over the next 12-18 months.

• Liontown Resources (+5.69%) reduced its half-year losses to $22.6 million from $31.4 million a year earlier, producing 116,854 dry metric tonnes of spodumene concentrate and shipping 92,172 tonnes. The company plans to begin underground stoping in Q4 and has lowered its production target to 2.3 million tonnes annually from FY2025 end due to low lithium prices.

• Myer (+1.35%) has restructured its executive team following its merger with Premier Investments' brands, including the departure of CFO Matt Jackman after just one year. Former David Jones CFO Kathy Karabatsas will take his position, while the retailer has appointed new chiefs for people, information, and supply chain roles.

ASX Company Movers

Wall Street

U.S. stocks tumbled on Thursday, extending a three-week market rout. The S&P 500 (-1.39%) officially entered correction territory after falling 10.1% from its recent peak. The Dow Jones (-1.30%) recorded its worst week since June 2022, while the tech-heavy Nasdaq (-1.96%) plunged. Major technology stocks like Apple (-3.36%), Tesla (-2.99%), and Meta (-4.67%) all posted significant losses.

The sell-off intensified after President Donald Trump escalated trade tensions by threatening to impose 200% tariffs on European alcoholic beverages in retaliation for the EU's 50% levy on American whiskey. Dont forget to check our dedicated tariff section later in the newsletter if you can’t get enough tariff news!

U.S. Company News

American Eagle (-4.10%) shares fell after the retailer warned of a mid-single-digit sales drop for Q1, missing analysts' expectations of 1.3% growth. The company also projected a low single-digit decline for the full year, compared to the forecasted 3% growth. Dollar General (+6.81%) shares surged despite the company's store portfolio review cutting into profits, with plans to close 96 Dollar General stores and 45 Popshelf locations while converting six others to flagship banner sites. Intel (+14.60%) shares surged after the chipmaker announced Lip-Bu Tan, the former chief executive of software company Cadence Design Systems, as its new CEO.

In after-hours trade, several tech and retail stocks surged on positive earnings surprises, with semiconductor manufacturer Semtech (+12.04%) jumping after posting better-than-anticipated fourth-quarter earnings of 40 cents per share (versus 32 cents expected) on $251 million revenue and providing strong current-quarter guidance. Electronic signature service DocuSign (+10.84%) rose following its earnings beat of 86 cents per share against the 85 cents forecast, with revenue reaching $776 million compared to analysts' $761 million expectation. Meanwhile, beauty retailer Ulta Beauty (+6.53%) popped after exceeding fourth-quarter expectations with earnings of $8.46 per share on $3.49 billion revenue, significantly outpacing analyst projections of $7.12 EPS and $3.46 billion revenue, though the company's full-year guidance came in weaker than anticipated.

Economic Data

• Eurozone Industrial Output rebounded by 0.8% month-over-month in January 2025, surpassing market expectations of 0.6% growth and reversing a revised 0.4% decline in December.

• U.S Initial Jobless claims fell by 2,000 to 220,000 in the first week of March, the lowest in three weeks, and below market expectations, it would rise to 225,000.

• U.S. Producer Price Inflation was unchanged in February from January 2025, following an upwardly revised 0.6% rise in the previous period and below forecasts of a 0.3% gain.

   

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Quick Singles

Local News

• ANZ has secured a 10-year, AUD$2 billion government guarantee for its Pacific operations, with the probability of being called assessed as very low. ANZ will invest an additional $50 million in the Pacific banking systems.

• Energy prices are set to rise between 2.5% - 8.9% for households and 4.2% - 8.2% for small businesses in NSW, South Australia, and Southeast Queensland under the Australian Energy Regulator's draft default market offer for 2025/26.

• More than 400 workers at Rio Tinto's Paraburdoo iron ore mine have signed a petition supporting collective bargaining, potentially marking the first such agreement at a major Pilbara mine in over two decades.

Around The Globe

• Binance reportedly approached Donald Trump's family representatives about acquiring a stake in the cryptocurrency exchange as part of efforts to restart its US operations.

• Comcast has extended its Olympic broadcast rights beyond 2032, securing the 2034 Salt Lake City Winter Olympics and the 2036 Summer Olympics in a $3 billion deal with the IOC.

• Meta will begin testing "Community Notes" in the U.S. from March 18, adopting technology similar to the X platform. This crowd-sourced fact-checking system will allow users to write and rate notes flagging misleading content across Instagram, Facebook, and Threads.

• Oracle has emerged as the leading contender to help run TikTok's U.S. operations as the app tries to avoid a potential ban, according to The Information.

• Starlink has secured deals with India's top wireless carriers, with Reliance Industries' Jio Platforms announcing a partnership to offer satellite internet service through its retail locations, including equipment and installation support.

All About AI

• Alibaba Group has launched an updated version of its Quark A.I. assistant app, which its flagship Qwen AI reasoning model now powers. The revamped application, which has previously used its own QuarkLLM models since its 2016 launch, will integrate multiple A.I. functions.

• Google's Gemini A.I. now leverages your search history to personalise responses, particularly for queries like restaurant and travel recommendations. Powered by the Gemini 2.0 Flash Thinking Experimental model, this feature will eventually integrate with other Google apps to provide more tailored insights.

Brokers

Broker Deep Dive

Shaw and Partners has maintained a "Buy" recommendation for gold producer Ramelius Resources (RMS) with a slightly reduced price target of $2.89 (from $2.98), representing 20.1% upside. The broker's research report follows RMS's updated Mt Magnet mine plan, which includes a mill expansion to 3Mtpa and a 680koz Eridanus open pit.

Lower production in FY26 (-9%) and higher costs impacted forecasts. Key risks include gold price volatility, project development challenges, and acquisition risks. Catalysts include high-grade ore from Penny and Cue operations and potential value-enhancing acquisitions as the company seeks to add another processing hub.

You can access the report below:

Daily Broker Moves

1. Citi has upgraded Charter Hall to Buy (from Neutral) with an $18.50 target, noting REITs typically benefit from expected interest rate cuts. Despite recent trade policy uncertainty causing sector sell-offs, stable long-term bond yields and anticipated equity flow returns to Australia support potential FUM growth.

2. Macquarie has downgraded Helia Group to Underperform from Neutral, maintaining a target price of $4.20. The broker identifies two key risks: potential claims normalisation and uncertainty surrounding the company's renewal of its LMI contract with CommBank.

3. Citi has upgraded Lifestyle Communities to Buy from Neutral while maintaining its $9.70 target price. The broker expects interest rate cuts in 2025, typically driving multi-year positive performance for REITs.

Broker Commodity Forecasts

↗️ Macquarie predicts gold will reach $US3,500/oz this year due to US budget deficits, upgrading Q3 forecasts to $US3,150/oz.

↘️ RBC has further reduced its 2025 lithium price targets due to ongoing oversupply concerns despite last year's production cuts, lowering spodumene concentrate to $US894/tonne from $US913 and cutting lithium hydroxide by 8% to $US9844.

Markets

Commodity Prices

Bonds

Forex

Global Health Check

Tariff Watch

The T Word

Can’t keep up with all the tariff news?
We’ll provide you a round-up of the latest on the tariff ‘wars’

Lots going on overnight! ⬇️ 

Overnight Updates

• President Trump has threatened to impose a 200% tariff on European wine, champagne, and spirits if the E.U. does not remove its 50% tariff on American whiskey.

• ​The E.U. announced that it plans to impose a 50% tariff on American whiskey, including bourbon, effective April 1, 2025.

• Chinese authorities summoned executives from Walmart to express concerns over the company's reported requests for suppliers to lower wholesale prices to offset U.S. tariffs.

• Australian trade and tourism minister, Don Farrell, will speak with a White House representative this weekend about Trump's 25% steel and aluminum tariffs, maintaining he "has not given up" on securing an Australian exemption.

ICYMI

• March 12, 2025 - The European Union has announced retaliatory tariffs on approximately €26 billion ($28 billion) worth of U.S. goods, effective April 1. These tariffs target many products, including boats, bourbon, motorcycles, industrial items, and agricultural products.

• March 12, 2025 - The U.S. imposed a 25% tariff on steel and aluminum imports from multiple countries, including Australia, China, Canada, and E.U. member states.

• March 12, 2025 - Canada announced it would impose a 25% tariff on U.S. steel, aluminum, and other goods, affecting approximately $21 billion worth of U.S. imports.

• March 4, 2025 - China has imposed a 25% tariff on various U.S. agricultural products, including soybeans, pork, beef, seafood, cotton, chicken, and corn.

• March 4, 2025 - The U.S. increased tariffs on Chinese imports from 10% to 20%.

• February 1, 2025 - President Trump signed Executive Order 14195, establishing a 10% tariff on all Chinese imports, effective February 4, 2025

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 January 31, 2025.

A Little Extra

Short Data

Top 10 shorted stocks on the ASX - as of March 10

The Insiders

Director buying and selling.
On-market and Off-market trades only.
Net Buy/Sell positions from February 27 - March 12

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 own research before making any investment.