Wall Street Soars, ASX Barely Moves Ahead of Budget

Market Wrap

Good Evening,

Welcome to Equity Espresso’s Daily Market Recap. We brew the market news strong enough to keep you awake through tonight's Federal Budget.
Today, we take a look at the retail sector to find some value, plus a reminder that it always pays to follow the (inside) money. And finally, thanks to everyone who has left us feedback in the last few days; we’ll incorporate some of your suggestions in the newsletter over the coming days/weeks. Okay, let’s jump in.

Local Market

Markets started the day strong but fell away in the afternoon, still managing to scratch out another minor gain, with the S&P/ASX 200 index rising 5.6 pts. (+0.07%) to finish at 7,942.50 following a bumper night on Wall Street. The major U.S. indices rose by over 1% on reports that the Trump administration might take a more measured approach to tariffs against U.S. trading partners, potentially excluding certain sectors.

A mixed sector session on the ASX, with Technology (+1.87%) stocks the biggest mover. Yesterday’s losers in Wisetech Global (+3.56%) and Life 360 (+5.60%) were today’s best performers in the sector. Health Care (+0.98%) and Real Estate (+0.37%) also rose thanks to gains from CSL (+1.26%) and Vicinity Group (+1.84%).

Consumer Staples (-0.86%) fell again, as both Coles (-0.26%) and Woolworths (-1.63%) gave back some of their gains from last Friday's bumper session.

James Hardie (-4.75%) shares fell, hitting a near two-year low, on the news it plans to merge with U.S.-listed AZEK. We’ve updated the latest broker commentary on James Hardie, which you can access here.

Why it pays to follow the money. Yesterday, Helia Group shares fell 26% after it said that CBA had entered exclusive negotiations with an alternative provider for Lenders Mortgage Insurance services. For those following our Director’s transactions summary section, you’ll notice that Helia has featured regularly in the top 5 for insider selling. CEO Pauline Blight-Johnson sold over 385,000 shares during March, totalling $2.2 million. Coincidence? Whilst insider selling doesn’t automatically mean the stock is a sell, it can be a yellow flag to be aware of.

Tonight, we’ll get the Federal Budget for 2025-26 and do a mini-recap of the key points that could potentially affect markets or sectors. We’ll likely see certain companies move significantly tomorrow based on policy announcements.

Dont forget to leave us feedback in our poll at the end of the newsletter.

Global Markets

U.S. stock rose sharply on Monday, with the S&P 500 climbing 1.76%, the Nasdaq gaining 2.27%, and the Dow Jones increasing 1.42%. This rally was driven by investor optimism following reports that the Trump administration might take a more measured approach to tariffs against U.S. trading partners, potentially excluding certain sectors from the broad levies initially scheduled to begin on April 2.

Technology companies led the gains, with Tesla (+11.93%) jumping in its biggest one-day gain since early November, while chipmakers also performed strongly, with Nvidia rising over 3% and AMD up 6.9%. Ten of the eleven S&P 500 sector indexes rose, led by Consumer Discretionary (+4.07%) stocks. The CBOE Volatility Index, known as Wall Street's fear gauge, dropped to a one-month low.

European markets closed slightly lower on Monday, with the pan-European Stoxx 600 falling 0.13% during a choppy trading session as optimism about U.S. tariff plans faded. Germany's DAX dropped 0.17%, France's CAC 40 declined 0.26%, and the U.K.'s FTSE 100 slipped 0.1%. Bayer AG's (-6.94%) shares dropped after a Georgia jury ordered the German conglomerate to pay nearly $2.1 billion to a plaintiff claiming its Roundup weedkiller caused cancer.

The Shanghai Composite slipped 0.1% during Tuesday’s session, reversing gains from Monday as concerns mounted over the effectiveness of China’s stimulus measures in offsetting U.S. tariffs. Car maker BYD smashed expectations with a 29% revenue jump to 777 billion yuan ($107 billion) and 34% profit growth to 40.3 billion yuan ($5.6 billion) for 2024.

Global Indices

U.S. Fear & Greed Index

Economic Data

• The S&P Global U.S. Composite PMI rose to 53.5 in March 2025, from February's 10-month low of 51.6, indicating the strongest growth since December 2024.

• The Eurozone Composite PMI edged up to 50.4 in March from 50.2 in February, falling short of market expectations of 50.8

Outlook

U.S. Futures are trading lower this afternoon, with the NASDAQ (-0.21%) and S&P500 (-0.15%) indicating negative starts at the open. The federal budget for 2025/26 will be released tonight, with Australia expected to record a budget deficit. On Wednesday, we will get the monthly CPI indicator figures for February, expected to be 2.50%.

Company Spotlight

❗️ASX Company Announcements

A snapshot of some of the companies out with news today

• Gold Road Resources has rejected what it calls an "opportunistic" takeover offer from Gold Fields Limited that valued Gold Road at $2.27 per share plus shareholders' proportionate interest in De Grey Mining. Gold Road's Board unanimously determined the offer materially undervalued the company.

• NexGen Energy has reported its best-ever discovery-phase drill result at the Rook I Property, with hole RK-25-232 intersecting 3.9 meters of extreme uranium concentration (>61,000 cps) within a larger 13.8m mineralised zone. Four additional winter drill holes have expanded the high-grade subdomain at Patterson Corridor East to 210m strike length and 335m vertical extent—double its November 2024 size.

• Meridian Energy will begin constructing a $227 million, 130MW solar farm at Ruakākā, New Zealand, in August after receiving final board approval. The North Island facility will produce up to 230GWh annually and sits adjacent to Meridian's 100MW battery storage system, which becomes operational in April.

• Nickel Industries forecasts Q1 earnings of US$85-90 million—a 20% jump from Q4—despite heavy rainfall and flooding in Indonesia causing a three-day closure of Oracle Nickel furnaces. The Mengjaya mine delivered 2.6 million wet metric tonnes, with operations resumed without significant damage.

• Regal Asian Investments provided an update on its portfolio holding in Opthea Limited (OPT). Following OPT's announcement of negative topline results for the first of two Phase 3 clinical trials of its lead drug candidate OPT-302, trading in OPT securities has been suspended until March 31, 2025.

• Ampol estimates $35 million in repair costs from ex-tropical cyclone Alfred damage, including $20 million for a crude storage tank and $15 million in demurrage costs. The company expects to recover about half through insurance. The petroleum producer lost 10 days of production and continues cleanup efforts on the damaged floating roof storage tank.

Company Deep Dive

Time to Go Some Shopping

Following Premier Investments' half-year earnings report, we look at Australia's largest listed retailers, including Wesfarmers, JB Hi-Fi, Harvey Norman, Premier Investments, Super Retail Group, ARB Corporation, Lovisa, and Nick Scali.

A Look at the Back Half of 2024

The Australian retail sector showed some signs of resilience in the face of cost-of-living pressures, volatile consumer sentiment, and global logistical disruptions.

While consumer discretionary spending remained under pressure, several large-format and value-oriented retailers managed to hold ground or grow modestly. Retailers such as JB Hi-Fi, Wesfarmers (Bunnings and Kmart), and Lovisa reported robust top-line growth, primarily driven by strong execution, effective pricing strategies, and enhanced value offerings.

For instance, JB Hi-Fi pointed to well-executed peak trading events like Black Friday and Boxing Day as key sales drivers, while Wesfarmers noted the importance of its low-price strategy, especially within Kmart and Bunnings, in maintaining customer loyalty.

However, the sector wasn’t immune to softness. Furniture and home-related retailers like Nick Scali and Harvey Norman experienced mixed results. Nick Scali’s headline profit dropped by nearly a third, primarily due to losses from its U.K. expansion and one-off supply chain disruptions following the collapse of a major freight forwarder.
Harvey Norman posted strong profits, benefiting from property revaluations and its franchising model rather than core sales momentum.
Premier Investments suffered from a sharp drop in Smiggle sales and underperformance in international markets like the UK, signalling that Australian brands may be reaching saturation or facing stiffer competition offshore.

Across the board, management commentary reflected a consistent theme: while consumers are still spending, they are more value-conscious, which benefits retailers with strong price-value propositions and omnichannel agility.

Looking Forward

The outlook across the retail sector over the next six to twelve months is best described as cautiously optimistic. Most retailers stopped short of offering concrete earnings guidance. However, several common themes emerged. Management teams acknowledged that the consumer environment would remain challenging, but several pointed to improving momentum in the second half. JB Hi-Fi cited continued demand for essential technology and home appliances, along with strength in online channels, as reasons for optimism. Wesfarmers struck a similar tone, flagging ongoing investment in value, service, and omnichannel capabilities as critical levers to maintain momentum, particularly across its Bunnings, Kmart, and Officeworks businesses.
Their focus is on retaining price leadership in categories that matter most to cost-conscious shoppers.

Several retailers are banking on internal initiatives to offset external headwinds.
Super Retail Group spoke positively about strong customer engagement across its loyalty programs and intends to advance with new store openings and omnichannel enhancements. Lovisa remains bullish on global expansion, with plans to further scale its footprint and unlock operating leverage as new store cohorts mature. On the other end of the spectrum, Premier Investments is recalibrating, having flagged restructuring and cost reduction across underperforming brands like Smiggle and Peter Alexander’s U.K. division. Similarly, Nick Scali struck a more subdued tone, acknowledging that trading conditions are soft, particularly in discretionary home furnishing, but suggested freight and cost tailwinds could support margin stabilisation.

By The Numbers

There is clear segmentation between defensive, value-oriented plays and higher-growth, premium-multiple companies. Wesfarmers, ARB Corporation, and JB Hi-Fi trade at the highest PEG ratios (4.25, 5.77, and 2.79, respectively), suggesting these companies are priced richly relative to their expected earnings growth — particularly ARB, which shows a relatively modest 4.5% EPS CAGR. In contrast, Harvey Norman stands out as the most attractively priced on a PEG basis (1.31), indicating a more balanced relationship between price and its lofty growth expectations.

JB Hi-Fi and Super Retail Group show reasonable valuations with solid growth profiles, reinforcing their reputations as dependable operators in a challenging environment. Meanwhile, Nick Scali's and Super Retail's negative forward EPS growth projections (-3.4% and -0.3%) reflect cautious sentiment.

Headlines

📰 Local News

• Gas giants would be forced to supply more energy to the domestic market under the Coalition's proposed gas reservation scheme targeting new projects, offering faster environmental approvals in exchange.

• Shein has launched its affiliate program in Australia, allowing local content creators, influencers, and digital entrepreneurs to collaborate with the fast-fashion retailer.

• Slater and Gordon believe a former employee leaked confidential salary information to over 900 staff, according to a forensic investigation. At least ten identical emails were strategically sent within 16 minutes on February 21, deliberately batched to bypass email security barriers that limit mass communications.

 🌎️ Around The Globe

• Donald Trump announced on Monday that countries purchasing Venezuelan oil and gas will cop a 25% tariff on their U.S. trade from 2 April, aiming to increase pressure on President Maduro and China. The president has accused Venezuela of deliberately sending violent criminals into the United States.

• Hyundai announced plans for a $21 billion investment in U.S. onshoring, including a $5.8 billion Louisiana steel plant. The facility will employ over 1,400 workers to produce next-generation steel for Hyundai's two U.S. auto plants.

• Johnson & Johnson is making a strategic $55 billion investment in U.S. manufacturing, with plans to build new facilities and expand existing ones.

• JPMorgan Chase is renaming its diversity, equity, and inclusion program to "Diversity, Opportunity & Inclusion" (DOI), which better reflects their approach.

• Segway is recalling about 220,000 Ninebot Max G3OP and Max G30LP KickScooters nationwide due to a faulty folding mechanism that can fail during use.

🤖 All About AI

• Apple is developing Apple Watch models with integrated cameras to analyse the wearer's environment and provide contextual information.

• Researchers from a multi-university consortium have unveiled ECgMLP, an A.I. model detecting endometrial cancer with 99.26% accuracy from microscopic tissue images.

• Google has started rolling out new A.I. features for Android smartphones that integrate 'Project Astra' capabilities with Gemini, allowing the AI to "see" what's on a user's screen in real time and answer questions about it.

Technical

Data Points

A list of companies hitting 52-week highs/lows. Companies hitting significant technical indicators:

A Death cross is a technical analysis signal that occurs when a stock's short-term moving average (50-day) crosses below its long-term moving average (200-day). It’s typically seen as a bearish signal. A golden cross is a technical analysis signal that occurs when a stock's short-term moving average (50-day) crosses above its long-term moving average (200-day). It’s typically seen as a bearish signal.

Brokers

Research Report

SPC Global Holdings (ASX: SPG) is a diversified food and beverage company formed through the reverse takeover of The Original Juice Co and the acquisition of Nature One Dairy, creating a stronger combined entity with increased scale and year-round revenue stability.

Pitt Street Research values the company between $1.37-$1.90 per share, with re-rating potential from improved financial performance and operational synergies.

SPC stands at a pivotal point as it prepares to enter new Australian market channels (aged care and healthcare) and expand internationally. Management forecasts FY25 revenue of $404.4m and EBITDA of $29.9m, representing 22% and 61% growth, respectively, from pro-forma FY24 figures.

You can access the report below:

Daily Broker Moves

• Bell Potter upgrades Catalyst Metals to Buy with a higher target of $5.50, following the $33m sale of the Henty gold mine to Kaiser Reef. The broker views this as a sensible move that simplifies the business to focus on Plutonic Gold operations while raising its gold price forecasts through 2028.

• Citi upgrades Deterra Royalties to a Buy with an unchanged $4.50 target, citing the stock's "large discount" to estimated NPV. In its global metals outlook, Citi forecasts upside for uranium and lithium carbonate but downside for manganese and zinc.

• Macquarie upgrades Helia Group to Neutral from Underperform but cuts its target to $3.55, as CommBank's exclusive engagement with an alternate LMI provider suggests Helia has lost this crucial contract representing 44% of its business.

• Morgan Stanley upgrades James Hardie Industries to Overweight from Equal-weight, viewing the 21% share price decline following the AZEK acquisition as excessive. Despite acknowledging the premium paid for the US$8.75bn deal and short-term EPS dilution, the broker maintains its $55 target.

• Macquarie downgrades James Hardie Industries to Neutral from Outperform and slashes its target price to $44 from $65, significantly reducing the multiple to 13x FY26 estimates. While acknowledging AZEK as an attractive asset that addresses a weakness in Hardie's trim product, the broker notes the acquisition comes at a steep 26% premium to AZEK's volume-weighted average price.

• Bell Potter maintains a Hold rating on Medical Developments International but dramatically cuts its target price to 71c from $1.60. Despite welcoming positive EBITDA for the first time in a while and noting emerging "green shoots" in the slow turnaround, the broker has significantly reduced its forecasts.

• Citi downgraded New Hope to Neutral from Buy and reduced its target price to $4.20 from $5.30, driven by lower thermal coal price forecasts and earnings downgrades of 25% and 22% for 2025 and 2026, respectively.

A Little Extra

 ⬇️ Short Data

Top 10 shorted stocks on the ASX - as of March 19

The Insiders

Director buying and selling.
On-market and Off-market trades only.
Net Buy/Sell positions from February 27 - March 21

💵 Dividends

Companies who traded ex-divided today

1. Civmec (CVL)

2. Southern Cross Electrical (SXE)

3. Cash Converters (CCV)

4. Adrad Holdings (AHL)

5. Mader Group (MAD)

6. Atlas Arteria (ALX)

The Last Word

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.