Banks' Brutal Week Drags ASX to Five-Week Low

Good Evening,

Welcome to Equity Espresso’s Market Recap.

The Australian share market slumped to a five-week low on Friday, with the S&P/ASX 200 index dropping 0.32% to 8,296.20, extending its decline to 3.03% since reaching a record peak last Friday.

Six out of eleven market sectors finished in negative territory, with the Financials (-1.28%) sector continuing to face significant selling pressure. Commonwealth Bank (-2.57%) shares hit a five-week low, while the broader financial sector suffered a 7.5% decline this week following disappointing earnings results from the major banks.

Consumer Discretionary (-1.54%) was the day's worst-performing sector. Guzman Y GOMEZ (-14.25%) fell sharply as declining sales at its U.S. outlets raised concerns about the company's plans to enter the market.

There were some bright spots in the market today as half-year earnings reports rolled in. QBE Insurance (+3.04%) showed strong gains after announcing higher profits and an increased dividend, while Telix Pharmaceuticals (+13.83%) jumped on the back of an optimistic revenue forecast.

The Materials (+1.56%) sector saw some much-needed green, with major iron ore miners BHP Group (+2.77%), Fortescue (+2.25%), and Rio Tinto (+2.83%) all posting gains. Mineral Resources (+5.03%) jumped after receiving an "overweight" rating from broker Barrenjoey.

WTI crude oil futures surpassed $72/bbl on Friday, heading for its biggest weekly gain since January. The rise comes as Russia reported a 30-40% decline in oil flows through a crucial Kazakh export route.

ASX Company News

• Domain Holdings (+39.42%) shares surged after U.S. real estate giant CoStar made a $4.20 per share bid, a 34.6% premium. CoStar acquired 17% of Domain and offered the board a non-binding $2.6 billion indicative bid.

• Guzman y Gomez (-14.25%) expects to beat its full-year profit forecast after strong half-year results. Australian stores saw 9.4% same-store sales growth, driving $573 million in sales. EBITDA rose 28.3% to $31.6 million, but segment earnings of $26.8 million missed expectations.

• Jumbo Interactive's (-8.93%) earnings fell 12.9% to $30.6 million in the first half, with net profit down 10.8% to $18.6 million due to fewer large jackpots. The lottery retailer lowered its interim dividend and adjusted marketing and costs in response to the subdued environment.

• QBE Insurance's (+3.04%) statutory net profit rose 31% to US$1.78 billion (A$2.78 billion) in the full year, with fewer natural catastrophe claims. The final dividend of 63¢ brought the full-year dividend to 87¢, up from 62¢.

• Ramelius Resources' (+3.80%) half-year net profit soared 313% to $170.3 million. The company sold 143,032/oz of gold, generating $506.4 million in revenue from its Mt Magnet and Edna May processing centres.

• Spark New Zealand (-19.32%) reduced its 2025 earnings guidance to NZ$900 million-NZ$1.1 billion from NZ$1.1 billion-NZ$1.2 billion after a weak enterprise and government division performance. First-half earnings fell 20.9% to $419 million, and profit plunged 77.7% to $35 million.

• Telix Pharmaceuticals (+13.83%) expects 2025 revenue between $1.18-$1.23 billion, following strong 2024 results. Full-year revenue rose 56% to $783.2 million, largely driven by Illuccix prostate cancer imaging agent sales. Earnings jumped 70% to $99 million.

• Yancoal (+2.96%) forecasts 35-39 million tonnes of coal production for 2025, with lower Q1 output due to mine sequencing. 2024 production rose 10% to 36.9 million tonnes, but revenue fell to $6.9 billion as coal prices dropped 24% to $176/tonne.

Wall Street

U.S. stocks dived on Thursday, with the Dow Jones (-1.01%) seeing the largest fall of the major indices, followed by the Nasdaq (-0.47%) and S&P 500 (-0.43%). Tariff worries and a disappointing forecast from Walmart (-6.53%) put investors on edge. Gold prices hit a record high as uncertainties mounted.

Financials (-1.55%) took the biggest hit among S&P 500 sectors, followed by Discretionary (-1.10%) stocks. Palantir Technologies (-5.22%) dropped after the Pentagon hinted at potential budget cuts for 2026. Conversely, Alibaba's (+8.09%) U.S.-listed shares jumped 8.1% after beating revenue expectations in its third quarter.

Walmart's (-6.53%) stock plunged following disappointing financial guidance for fiscal year 2026, with earnings per share forecast between $2.50 and $2.60. The retailer, seen as a gauge of U.S. consumer spending, also warned it wouldn't be "immune" to impacts from proposed tariffs on Mexican and Canadian goods.

S&P500 Sector Performance

Economic Data

• Australia’s S&P Global Flash PMI Composite Output Index reached 51.2 in February 2025, slightly up from 51.1 in January, signalling continued but modest growth in Australia’s private sector.

• Japan’s Annual Inflation rate climbed to 4.0% in January 2025 from 3.6% in the prior month, marking the highest reading since January 2023.

• The U.K. Consumer Confidence Index rose by 2 points to -20 in February 2025, reflecting a slight improvement as households expressed more optimism about their personal finances and the broader economic outlook.

• U.S. Initial Jobless claims rose by 5,000 from the previous week to 219,000 on the period ending February 15, ahead of market expectations of 215,000.

Sponsor

Today’s Fastest Growing Company Might Surprise You

🚨 No, it's not the publicly traded tech giant you might expect… Meet $MODE, the disruptor turning phones into potential income generators.

Mode saw 32,481% revenue growth, ranking them the #1 software company on Deloitte’s 2023 fastest-growing companies list.

📲 They’re pioneering "Privatized Universal Basic Income" powered by technology — not government, and their EarnPhone, has already helped consumers earn over $325M!

Their pre-IPO offering is live at just $0.26/share – don’t miss it.

Invest Now

*Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
*The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
*Please read the offering circular and related risks at invest.modemobile.com.

Quick Singles

🌎️ Around The Globe

• Amazon will take creative control of the James Bond franchise from the Broccoli family, who have produced the films for decades. The move comes after Amazon acquired MGM Studios in 2021.

• Ex-OpenAI CTO Mira Murati launched Thinking Machines Lab, an AI startup aiming to create customisable, capable, and widely understood AI systems.

• Donald Trump has suggested that some of the money saved by Elon Musk’s Department of Government Efficiency could be returned to U.S. citizens, with an equal amount used to reduce the federal debt.

• Forever 21 is in discussions with liquidators as it struggles to find a buyer and considers a second bankruptcy filing. The retailer is seeking to sell its U.S. leases and assets but not its intellectual property.

• Microsoft unveiled Majorana 1, its first quantum computing chip, after nearly two decades of research. The chip uses eight topological qubits made from indium arsenide and aluminium, creating a new state of matter.

• OpenAI's ChatGPT saw a 33% surge in weekly active users, reaching 400 million in February compared to 300 million in December, according to the company's COO Brad Lightcap in a CNBC interview.

• X is seeking investor funding at a $44 billion valuation to finance new features and reduce debt.

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 January 31, 2025.

The Last Word

How are we doing?

We always love hearing from our readers and are constantly seeking feedback.

• How are we doing with Equity Espresso?

• Is there anything you’d like to see more of or less of?

• Which aspects of the newsletter do you enjoy the most?

Hit reply and say hello - or leave us feedback in the poll below:

If you enjoyed this newsletter, forward this e-mail to a friend.

If you’re that friend, subscribe here.

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.