WiseTech Rebounds, Trump's Copper Tariff Threat, PointsBet Finds Suitors

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Welcome to Equity Espresso’s Market Recap.

The Australian share market fell to a five-week low on Wednesday, with the S&P/ASX 200 index dropping 0.14% to 8,240.70, making it seven negative days in the last eight. Five of 11 sectors finished in the red, with Real Estate (-1.31%) and Materials (-1.61%) leading the declines.

Mining stocks faced heavy selling pressure as iron ore prices dipped below US$106/t amid ongoing uncertainty about Trump's proposed tariffs and their potential impact on global trade. News that copper might also face U.S. tariffs sparked fears of weakening demand, sending Fortescue (-6.23%) plummeting. Rio Tinto (-3.39%) fell, as did BHP Group (-1.49%). Gold miners Evolution Mining (-1.74%) and Newmont (-2.04%) declined.

WiseTech (+2.06%) shares rebounded after reinstating co-founder Richard White as executive chairman following Tuesday's boardroom exodus, which had already sent shares crashing by more than 20%. Meanwhile, Woolworths (-3.04%) approached declined after reporting disappointing earnings results impacted by distribution centre strikes.

ASX Company News

• Appen (-33.33%) reduced its annual after-tax loss to $20 million from $118 million, despite a 14.2% revenue decline to $234.3 million following the loss of an $82 million Google contract over a year ago.

• Bapcor (+13.36%) slashed its dividend to 8¢ per share from 9.5¢ as net profit tumbled 15.2% to $45.5 million for the December half. The company is aggressively cutting costs with savings expected to reach the upper end of the $20-30 million target range.

• EML Payments (+14.62%) swung back to profitability with a statutory net profit of $9.5 million for the half-year, recovering from a $4.7 million loss in the previous period. The global payments provider reaffirmed its fiscal 2025 guidance of $554-600 million but declared no dividend.

• Kelsian (-15.19%) reported a 7.9% drop in first-half underlying profit to $39.7 million, though underlying earnings increased 1.3% to $132.2 million. The transport provider announced it has reached the peak of its capital expenditure program and expects to reduce sustained capex below $85 million by FY2026.

• Lynas Rare Earths (-1.72%) saw its profit plummet 85% to just $5.9 million in the first half, dramatically missing analyst forecasts of $32.2 million as China's market dominance continued suppressing rare earth prices.

• Platinum Asset Management (-20.00%) shares plunged after the fund manager reported its interim earnings had collapsed by more than one-third to $29.9 million.

• PointsBet (+32.53%) has agreed to be acquired by Japanese consumer technology company Mixi Inc. for $1.06 per share via a scheme of arrangement, representing a 27.7% premium to its last closing price. The sports gambling provider faces a potential bidding war after rival BlueBet emerged with a competing offer, claiming its combined cash and scrip proposal valued at $340-$360 million is superior. BlueBet has accused PointsBet of ignoring its bid in favour of Mixi's offer.

• Scentre Group (-3.30%) posted a dramatic surge in full-year post-tax net profit to $1 billion, up from $174.9 million, driven by property value increases that contrasted with previous writedowns.

• Steadfast Group (-2.56%) posted a strong 19% increase in first-half net profit to $154.6 million, up from $100.4 million, driven by new acquisitions and growth in gross written premiums. The insurance broker network reported 14.6% earnings growth and a 7.9% rise in its insurance network's gross written premiums.

• WiseTech Global (+2.06%) reported profit growth of over a third to US$112.1 million, while earnings jumped 28% to US$192.3 million. However, the logistics software giant warned investors that full-year revenue will hit the bottom end of 2025 guidance due to delays in three key product rollouts. The company announced founder Richard White's appointment as Executive Chairman, who will oversee succession planning for a permanent CEO. WiseTech increased its interim dividend by 31% to US6.7¢.

• Woolworths (-3.04%) shares tumbled after the supermarket giant reported a more than 20% decline in first-half net profit. Despite overall group sales increasing 3.7%, EBIT fell 14.2%, driven largely by a 12.8% drop in Australian Food earnings. The company lost $240 million in sales from pre-Christmas distribution centre strikes, though without this disruption and supply chain costs, Australian Food EBIT would have declined by approximately 5%.

Wall Street

Wall Street had a rough Tuesday, with the S&P 500 dropping 0.47% and the tech-heavy Nasdaq tumbling 1.35%, both marking their fourth straight day of losses. Meanwhile, the Dow Jones (+0.37%) bucked the trend with a modest 0.37% gain. The market downturn comes amid worrying consumer confidence data, which recorded its steepest monthly drop since August 2021.

The "Magnificent 7" tech stocks have fallen 10% from their December peak, with Tesla (-8.39%) taking a sharp fall after poor European sales figures. Nvidia (-2.80%) also continued its downward slide ahead of Wednesday's earnings report. Communication Services (-1.53%) was the worst-performing sector, while Consumer Staples (+1.69%) managed to post the biggest gains.

Krispy Kreme (-21.91%) shares plunged after the doughnut maker posted just 1 cent earnings per share on $404 million revenue—well below analysts' expectations of 10 cents EPS on $414 million revenue. The company's disappointing full-year outlook further soured investor sentiment. Home Depot (+2.84%) shares jumped after the retailer posted its first positive comparable sales growth in two years, narrowly beating quarterly earnings estimates despite challenging market conditions.

S&P500 Sector Performance

Economic Data

• Australia's Consumer Price Index (CPI) rose 2.5% YoY in January 2025, unchanged from the prior month but below market expectations of 2.6%. Excluding volatile items, the CPI gained 2.9%, the most in 5 months.

• The U.S. S&P CoreLogic Case-Shiller 20-city home price index went up 4.5% YoY in December 2024, above 4.3% in November and above expectations of 4.4%.

• Australian Construction Work rose by 0.5% quarter-on-quarter to $73.94 billion in Q4 of 2024, slowing from an upwardly revised 2.0% growth in Q3 and missing market estimates of 1.0%

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🌎️ Around The Globe

• Anthropic has launched Claude 3.7 Sonnet, pioneering 'hybrid reasoning' AI that lets users switch between quick responses and extended thinking mode with visible reasoning. The release includes Claude Code, a new agentic coding tool.

• Apollo Global Management will acquire real estate firm Bridge Investment Group for about $1.5 billion in an all-stock deal, offering Bridge stockholders 0.07081 Apollo shares per Bridge share—valuing them at $11.50 each. Blackstone Infrastructure funds will acquire Safe Harbor Marinas from Sun Communities for $5.65 billion, valuing the company at 21 times its estimated 2024 Funds From Operations.

• DoorDash will pay nearly $17 million to settle claims it misused customer tips in New York between 2017 and 2019. Attorney General Letitia James alleges the company improperly counted tips toward drivers' guaranteed base payments rather than allowing workers to keep gratuities on top of their standard wages.

• Elizabeth Holmes' fraud conviction and $452 million restitution order for misleading Theranos investors has been upheld by a court.

• Qatar's sovereign wealth fund is evaluating eight new venture capital firms for its $1 billion "fund of funds" programme, which has already invested nearly $500 million across six firms.

• Turkey will export a record 420 million chicken eggs to the U.S. this year to help address America's ongoing egg shortage, according to the Egg Producers Central Union in Turkey.

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Geared

*1-year, 3-year and 5-year returns are calculated as of January 31, 2025.

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