Pre-Trump Rally Continues While Star's Light Dims Further

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Welcome to Equity Espresso’s Market Recap.

The Australian share market advanced on Monday, with the S&P/ASX 200 index gaining 0.5% to close at 8,347.4 points, while the All Ordinaries rose 0.4%. The Australian dollar strengthened to US62.11¢, with nine out of eleven sectors finishing higher.

Market sentiment remained positive despite U.S. markets being closed Monday for Martin Luther King Jr. Day, with traders looking ahead to President-elect Trump's inauguration as the 47th U.S. president, scheduled for Tuesday morning Australian time.

Technology (+1.13%) stocks led the gains, with Life 360 (+4.55%) and Technology One (+1.67%) the best performers, while WiseTech (+0.80%) and Xero (+0.52%) also advanced. The Financials (+0.69%) sector also performed strongly, as Commonwealth Bank increased 0.75% while Macquarie Group surged 1.88%.

Just two sectors finished in negative territory: Telecommunications (-0.01%) stocks were marginally lower, while Energy (-0.56%) declined 0.6%.

Company News

• Australian Ethical (-3.77%) achieved record assets under management of $13.26 billion following a strong performance in the December quarter, with $173 million in net retail and wholesale flows and a $190 million investment gain.

• Ioneer (+20.59%) shares surged after securing a record $1.6 billion U.S. Department of Energy loan for its Nevada lithium project. The 20-year funding will develop the first new U.S. lithium mine in nearly a century.

• Insignia Financial (-%) has granted CC Capital non-exclusive access to certain non-public information for due diligence following an increased takeover bid of $4.60 per share, valuing the company above $3 billion.

• Iress (+6.17%) announced the sale of its superannuation business to Apex Group for $40 million, with potential additional payments of up to $20 million based on revenue targets.

• Karoon Energy (-5.69%) shares fell after announcing its Who Dat West exploration well in Mississippi, which found no significant hydrocarbons and was permanently abandoned. The company, which holds a 35% stake in the joint venture, will use collected data to assess remaining prospects.

• Star Entertainment (-17.86%) issued a dire warning about its future, revealing concerns over its ability to continue operations without securing $150 million in new funding. The casino operator reported just $79 million in cash reserves after a 15% revenue drop to $299 million in Q4 and an $8 million earnings loss.

Wall Street

U.S. markets staged a strong rally on Friday, with the S&P 500 rising 1.00%, the Dow Jones gained 0.78%, and the Nasdaq jumped 1.51%. The week marked the biggest gains since November for the S&P 500 and Dow, driven by optimistic economic data and expectations of earlier Federal Reserve rate cuts under the incoming Trump administration.

Technology (+1.65%) stocks led the rebound, with chipmakers like Nvidia (+3.10%), Qorvo (+14.43%), and Broadcom (+3.50%) posting significant gains, while crypto-related stocks surged. However, healthcare saw declines as Eli Lilly (-4.21%) and Novo Nordisk (-4.34%) fell after the Department of Health and Human Services listed their drugs for price negotiations. Only the Real Estate (-0.04%) and Healthcare (-0.67%) sectors finished in negative territory among S&P 500 sectors.

Cryptocurrency-related stocks surged following reports that Trump plans to prioritise crypto through an executive order upon taking office. Coinbase (+4.92%) and Robinhood (+4.49%) shares got a boost, while Bitcoin proxies MicroStrategy (+8.04%) and Mara Holdings (+8.80%) closed close to 10% higher.

S&P500 Sector Performance

Economic Data

• The People’s Bank of China (PBoC) kept its key lending rates unchanged for the third consecutive month in January, aligning with market expectations. The one-year loan prime rate (LPR), a benchmark for most corporate and household loans, was maintained at 3.1%,

• U.S. Housing Starts surged 15.8% in December 2024 from the previous month to a seasonally adjusted annualised rate of 1.499 Million units. It is the highest number of starts since February 2024, above market expectations of a softer increase to 1.320 Million.

• The IMF projects global growth of 3.3% for 2025, a slight increase from the 3.2% forecast in October, driven by an upward revision for the U.S., which offset downgrades in other major economies.

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🌎️ Around The Globe

• American Express has agreed to pay $230 million in settlements, including $138 million over wire fraud investigations related to inaccurate tax advice and $108.7 million to resolve DOJ civil claims about deceptive credit card marketing to small businesses.

• Bumble founder Whitney Wolfe Herd will return as CEO in March, replacing Lidiane Jones, who resigned after a brief tenure. The dating app, which went public in 2021, has seen its market value drop from $7.7 billion to $847 million.

• Digital Currency Group and former Genesis CEO Michael Moro agreed to pay $38.5 million in SEC penalties for misleading investors about Genesis's financial health. The crypto lending unit filed for bankruptcy in January 2023 and was among the casualties following FTX's collapse.

• Investors, including LeBron James' business partner Maverick Carter, are seeking to raise $5 billion to launch a new international basketball league offering players equity stakes. The venture, which could rival the NBA by using LIV Golf's strategy of lucrative deals, is being advised by prominent tech and investment figures.

• Nintendo has revealed Switch 2 with a teaser showing a larger screen, updated Joy-Con controllers in blue and pink, and hints of a new Mario Kart title. The company will provide more details about the anticipated console during a Nintendo Direct presentation on April 2.

• Spirit Airlines will eliminate approximately 200 positions as part of cost-cutting measures following its November bankruptcy filing.

• TikTok began restoring services after President-elect Trump promised to revive the app's U.S. access upon taking office Monday. Trump pledged at a Sunday rally to save the platform through a joint venture, with TikTok announcing its return to serve its 170 million American users.

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

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