ASX Market Recap: ASX hits 7,999 as rate cut hopes strengthen

Good Evening,

Welcome to Equity Espresso’s Daily Market Recap. We're serving up market news hotter than copper prices. Today, we got a budget recap, cooling inflation, and an explainer on what private credit is all about. Let’s jump in.

Local Market

Markets started the day strong following another positive session on Wall Street, with the S&P/ASX 200 index spending parts of the day above the 8,000 market before closing 56.5 pts. (+0.71%) higher to finish, like a JB-Hi Fi promo at 7,999.0.

Markets pushed slightly higher after Australia’s Consumer Price Index (CPI) for February 25 slowed to 2.4% year-on-year, below the market consensus of 2.5% and lower than last month’s figure of 2.5%. The lower read boosted hopes of an earlier-than-expected rate cut by the RBA, which will meet next week; however, markets are still pricing with a 92% chance of no rate change.

Almost a clean sweep on the boards, with 10 of the 11 sectors closing higher, led by gains in Staples (+1.19%), Real Estate (+1.15%), Industrials (+1.11%) and Financials (+1.08%). Bank stocks led the markets higher, with gains from ANZ Group (+2.62%), CBA (+1.06%), and Westpac (+1.11%). The Healthcare (-0.52%) sector was the lone detracter, thanks to a fall from CSL (-1.44%).

Gold prices rose above $3,010/oz after three consecutive sessions of losses. Copper futures soared to a record high of $5.20/lbs amid multiple market pressures. The surge follows concerns about potential heavy import tariffs reportedly planned by President Trump within weeks. Compounding supply worries, Glencore Plc temporarily suspended copper shipments from its Altonorte smelter in Chile due to furnace issues, further tightening global copper availability and driving prices upward.

We’ve added some new data points. Check out which companies are riding the longest winning or losing streak. Plus, we've included a roundup of the day's top-performing ETFs.

We’ve added some new data points in today’s newsletter. See which companies are on the longest winning/losing streak. Plus, we show the top-performing ETFs for the day.

In today’s deep dive, we explain private credit and ways for investors to get exposure.

To get a quick recap of the Federal Budget news, jump to our headlines section.

Global Markets

Wall Street closed higher on Tuesday, with widespread gains across the S&P 500 (+0.16%), Nasdaq (+0.46%) and Dow Jones (+0.01%). Investors built on Monday's gains driven by hopes of narrower U.S. tariffs, with Communication Services (+1.43%) and Consumer Discretionary (+0.98%) sectors leading advances. Tesla (+3.45%) added to its 12% rally on Monday. Investors largely overlooked March consumer confidence data, which showed significant drops in the near-term outlook. The Conference Board's monthly confidence index fell to 92.9, below expectations, while future expectations plummeted to 65.2—the lowest in 12 years. Meanwhile, the VIX fell to 17, nearly half its recent spike near 30.

KB Home (-5.21%) shares dropped after missing Q1 earnings expectations, reporting $1.49 per share versus analysts' projected $1.58 and revenue of $1.39 billion against forecasted $1.5 billion. The homebuilder also reduced its fiscal 2025 revenue guidance. Oklo (-6.41%) shares fell after the nuclear technology company reported wider annual losses than the previous year. The company warned investors it anticipates "significant expenses and continuing financial losses" ahead.

European stocks rallied on Tuesday, ending a three-session losing streak as the Stoxx Europe 600 Index (+0.7%) rose, led by financial stocks. Deutsche Bank (+2.17%), Santander (+1.80%) and UniCredit (+3.29%) rose following analyst upgrades, while Shell (+1.28%) advanced after announcing plans to boost investor returns through 2030 by strengthening its position as the world's leading LNG trader. The UK's FTSE 100 gained 0.3% ahead of Wednesday's spring statement, with investors focusing on the global trade outlook before next week's U.S. tariff deadline.

The Shanghai Composite rose 0.2% on Wednesday, recouping losses from the previous session, with mining stocks leading the charge amid stronger metals prices, particularly copper and precious metals.

Global Indices

U.S. Fear & Greed Index

Economic Data

• U.S. sales of new single-family homes rose 1.8% to a seasonally adjusted annual rate of 676,000 in February 2025, recovering from a 6.9% drop in January but falling just short of market expectations of 680,000.

• The U.S. Home price index rose 4.7% year-on-year in January, up from 4.5% in December, but fell short of the expected 4.8% increase.

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.

Company Spotlight

❗️ASX Company Announcements

A snapshot of some of the companies out with news today

• Vulcan Energy's Phase One Lionheart Project has received Strategic Project status under the European Commission's Critical Raw Materials Act. This designation, announced after the CRMA took effect in May 2024, recognises the project's importance in securing sustainable lithium supply chains across Europe.

• Talga Group's natural graphite mine in northern Sweden has been awarded Strategic Project status under the European Commission's Critical Raw Materials Act. This significant recognition highlights the project's strategic importance to Europe's battery materials supply chain and strengthens Talga's position to finalise project financing and development.

• Bellevue Gold pending review and verification of gold production outcomes from the Bellevue Gold Project. This process may result in a downward adjustment to FY25 production guidance. The trading halt will remain until normal trading resumes on Friday, March 28, 2025, or when the company releases its updated production guidance announcement.

• Clinuvel Pharmaceuticals announced encouraging preliminary results from its afamelanotide study for arterial ischaemic stroke, with functional improvement in 8 out of 9 patients by day 42 and radiological improvement or stability in 6 patients. The company noted that while small, the data demonstrates the drug's safety profile across varying stroke severities and indicates potential patient benefits.

• Sovereign Metals shares dropped after announcing a $40 million capital raise by issuing 47.1 million new shares at 85¢ each. The funds will support the development of its Kasiya rutile-graphite project in Malawi. The placement, offered at a 12.8% discount, is expected to settle on April 1.

• Tuas reported a $3 million interim profit in H1, with revenues reaching $73.2 million, up from $62.4 million last quarter. Earnings hit $33.1 million as subscribers increased to 1.2 million users. The mobile network services provider expects to achieve full-year profitability and has forecast annual mobile and broadband capital expenditure between $50-55 million.

• Paladin Energy has resumed operations at its Langer Heinrich Mine following a temporary suspension caused by unseasonal heavy rainfall in Namibia—described as a one-in-fifty-year event. The company has withdrawn its FY2025 production guidance due to multiple disruptions.

• KMD Brands announced its 1H FY25 results with mixed performance across channels. Group sales increased by 0.5% to NZ$470.9 million, supported by improved direct-to-consumer channel trends and double-digit online growth across all three brands. The company reported significant profit declines, with underlying EBITDA falling 74.3% to NZ$3.9 million and a statutory NPAT loss of NZ$20.7 million.

• FleetPartners Group reported a net operating income rise of 9% year-to-date despite new business writings falling 20% due to system cutover impacts. The company expects 1H25 NPATA of $37.5-39.5 million and has completed its $30 million share buyback, bringing total buybacks to $255 million since May 2021.

Company Deep Dive

Understanding Private Credit

What is Private Credit?

Private credit (also called private debt) means loans made privately – outside the traditional banking system – through direct negotiation between a borrower and a non-bank lender. Instead of borrowing from a bank or issuing a bond in public markets, a business can borrow from private investors or specialised funds. These loans are often tailored to a borrowers’ needs and kept private (not traded like stocks or bonds). For example, a private credit fund might lend to a property developer who can’t get a bank loan. Investors who put money into the fund receive interest payments – usually at a higher rate than a typical bank deposit.

Why Private Credit is Booming?

Private credit has been growing quickly around the world, including in Australia. Globally, private credit assets have roughly quadrupled in the past decade to over US$2 trillion, and in Australia, it’s about $40 billion in loans (around 2.5% of all business lending). ​Several trends are behind this boom:

• Banks lending less: Since the 2008 Global Financial Crisis, banks have become more cautious and pulled back from certain types of business lending. This continued after COVID-19 as banks focused on safer loans, leaving a funding gap that non-bank lenders (private credit funds) are entering.

• Rising interest rates: With interest rates at their highest in years, new loans come with higher interest. Private credit funds can capitalise on these higher yields, making them attractive to investors as an alternative to traditional bonds or bank deposits. Even relatively safe private loans in Australia now pay around 10% interest.

• Investor appetite for income: Big investors – like superannuation funds – are hungry for steady returns. Private credit offers them higher yields and regular income. Australia’s biggest super fund, AustralianSuper, already has about $7 billion in private credit and is looking to ramp that up.

The 101: Borrowers get loans that banks might not provide, and investors earn higher yields. Regulators, however, are watching this growth to ensure it doesn’t pose undue risk.

Investment Opportunities for Australians

How do Australians invest in private credit:

• Managed funds: You can invest through managed funds offered by specialist non-bank lenders. Some private credit funds are listed on the ASX, allowing everyday investors to buy in like a share. Metrics Credit Partners (ASX: MXT) has a listed fund that lends to companies. Investors in these funds earn regular income from the interest paid on the loans. Some of the other listed companies include MCP Income Opportunities Trust (MOT), Qualitas Real Estate Income Fund (QRI), Pengana Private Credit Trust (PCX) and Gryphon Capital Income Trust (GCI)

• Superannuation: You might already have exposure via your super fund. Many large super funds use private credit to try and boost member returns.

• Peer-to-peer lending: peer-to-peer (P2P) platforms like Plenti let you lend money directly to borrowers via an online marketplace. You act as the lender and earn interest on the loans you fund. It’s private lending on a smaller scale, though P2P loans carry similar risks – some borrowers may not repay.

Typical returns: These loans are less liquid and riskier, so they usually pay more interest than bank deposits or government bonds. Depending on the loan, annual returns often land in the high single digits and can reach the low double digits for riskier deals. These rates are attractive but not guaranteed – they depend on borrowers making their payments.

Risks: Along with higher returns come some risks:

• Default risk: The borrower might not repay. Investors may lose money if a business borrowed through private credit can’t meet its payments.​

• Illiquidity: Private credit loans aren’t easily sold. You typically can’t get your money out until the loan term ends because there’s no ready secondary market to offload these loans.

Headlines

📰 Local News

Federal Budget Breakdown:

Here are some of the highlights from last night’s budget:

• $17 billion in income tax cuts: An average saving of $268 annually for Australians earning over $45,000 from July 1 2026. If re-elected, the government plans to reduce the tax rate for the lowest income bracket again in 2027.

• $7.9 billion to enhance bulk billing, aiming to make GP visits free for more Australians.

• $7.2 billion to upgrade the Bruce Highway in QLD. A further $3 billion over 7 years will be provided to finish the rollout of the national NBN.

• $689 million to reduce the maximum co-payment for PBS medicines from $31.60 to $25 per script.

• Plans to implement a framework called “A Better Deal For Renters,” which includes establishing genuine reasonable grounds for eviction and limiting rental increases to once a year

• A ban on non-compete and ‘no-poach’ clauses for workers earning less than $175,000 annually, aiming to enhance job mobility and productivity.

The Budget shows an expected deficit in the underlying cash balance for 2024-25 of $27.6 billion, or 1% of GDP. Federal Government net debt is expected to remain reasonably stable as a percentage of GDP between 21% - 24%. The budget is based on the below commodity prices at the end of the September quarter in 2025, with current spot prices in (brackets):

• Iron Ore: US$60/t (US$102/t)

• Metallurgical Coal: US$140/t (US$190-$200/t)

• Thermal Coal: US$70/t (US$105/t)

• Liquid natural gas: US$10/MMBtu (US$26/MMBtu)

• Jeanswest has entered voluntary liquidation, with all 90 Australian stores set to close, affecting approximately 600 employees. Owner Harbour Guidance, which acquired the brand from administration in 2020, has appointed administrators from Pitcher Partners Melbourne.

 🌎️ Around The Globe

• Apple will likely avoid E.U. fines and regulatory orders regarding iPhone browser options after making changes to comply with the Digital Markets Act.

• India is reportedly exploring tariff cuts on 55% of U.S. imports (US$23 billion) during the first phase of trade negotiations. This move aims to counter potential reciprocal tariffs from the U.S. administration.

• GameStop's board has unanimously approved plans to purchase Bitcoin with corporate cash. The stock jumped over 6% in after-hours trading.

• Meta Platforms has proposed charging Europeans nearly €14 monthly for ad-free Instagram on mobile or about €17 for both Instagram and Facebook on desktop.

• Waymo plans to launch its fully autonomous ride-hailing service in Washington, D.C. next year. The company began deploying vehicles to the U.S. capital in January and will increase its fleet in the coming weeks.

🤖 All About AI

• Alibaba Group Chairman Joe Tsai has cautioned that data centre construction may be forming a bubble, suggesting the rapid buildout pace could exceed early demand for A.I. services.

• DeepSeek has released an updated V3-0324 model, a massive 641GB A.I. system designed to run on high-end personal computers. The model features a Mixture-of-Experts architecture that activates only 37B parameters per token to reduce computational requirements significantly.

• FuriosaAI has rejected Meta's $800 million acquisition offer, preferring to remain independent, according to Bloomberg.

Technical

Data Points

A list of companies hitting 52-week highs/lows or 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). 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).

On a Roll

Companies on long winning/losing streaks.

Winning Streaks

• Perpetual (PPT) - 8 days

• Light & Wonder (LNW) - 8 days

• Southern Cross Gold - 7 days

• Washington Sol Patts - 7 days

Losing Streaks

• Coronado Global Resources - 7 days

• Myer - 7 days

• Amcor - 5 days

Brokers

Research Report - Raiz Invest

Venn Brown sat down with Brendan Malone, CEO of Raiz Invest, to discuss the group’s technology, expanding product offering, market traction and long-term plans.

Raiz Invest offers a mobile-first investment platform that simplifies investing with features like automated "round-ups" and a minimum $5 investment requirement. The company generates stable revenue primarily through fixed monthly account fees ($4.50-$5.50 for accounts under $25,000) and a 0.275% management fee for larger balances, supplemented by advertising and cashback programs.

The company is positioning for growth with a target of 500,000 users at $100 average revenue per user (ARPU), which would generate $50 million in annual revenue. Current metrics show 318,000 active customers with $74.29 ARPU. Growth strategies include expanding the customer base while increasing engagement and wallet share through additional services like Raiz Plus, Raiz Kids, and superannuation offerings.

Raiz emphasises that the company's business model isn't solely dependent on funds under management but rather on stable subscription fees. While customer acquisition remains challenging, Raiz has built a scalable technology infrastructure where additional customers contribute directly to the bottom line with minimal incremental costs.

You can access the report below:

Daily Broker Moves

• Ord Minnett downgraded James Hardie to Hold after its Azek acquisition, noting the deal is 7% EPS dilutive in FY26-27 and paid a 37% premium exceeding synergy value. Concerns include increased leverage to 2.5x amid a weakening U.S. housing market. Target reduced to $47 from $59.

• Macquarie maintains its Outperform rating and 85c target price for Nickel Industries despite unseasonably wet weather affecting operations in Indonesia. The company's 1Q25 EBITDA guidance of US$89m-US$90m falls between Macquarie's estimate of US$92m and consensus of US$80m.

• Morgans has upgraded Pro Medicus to ADD from HOLD following recent share price weakness while maintaining a $250 target price. The broker's analysis of the $330m Trinity Health deal revealed lower initial revenue during the 18-month implementation phase before increasing over the remaining 8 years. Despite a slight revenue miss, Pro Medicus delivered 42.7% profit growth with impressive EBIT margin expansion to 72%.

• Macquarie has upgraded Ramelius Resources to Outperform from Neutral and increased its target price by 9% to $2.50 following the company's $2.4bn bid for Spartan Resources. Ramelius already owns 19% of Spartan and aims to develop Dalgaranga's first ore by late 2025, with a full ramp-up of Never Never and Pepper orebodies expected by 2030.

Broker Forecasts

• MST Marquee anticipates fewer Reserve Bank rate cuts following Tuesday's federal budget, which announced $7.1 billion in additional spending before June 2026.

A Little Extra

 ⬇️ Short Data

Top 10 shorted stocks on the ASX - as of March 20

The Insiders

Director buying and selling.
On-market and Off-market trades only.
Net Buy/Sell positions from February 27 - March 24

💵 Dividends

Companies who traded ex-divided today

1. Flight Centre Travel Group (FLT)

🔍️ ETFs

Some of the ETFs with sharp moves today

Top 5

Bottom 5

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.