Good Evening,

Welcome to Equity Espresso’s Daily Recap. We’ve quickly moved on from the OpenAI saga to wake up to the news that Binance has been whacked with a whopping $4.3 billion anti-money laundering fine. Nvidia reported eye-watering numbers this morning, while ANZ told its staff their bonuses are at risk if they dont show up to the office 50% of the time. Let’s jump in.

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The Recap

The day started positively, with markets trading higher in the morning before an afternoon dip saw the ASX 200 index close 4.8 points or -0.07% lower to 7,073.4. It was a mixed day from a sector standpoint, with six sectors ending the day lower, with Real Estate (-1.52%) and Technology (-1.13%) seeing the biggest falls. On the positive side, Utilities (+0.88%) and Energy (+0.46%) were the biggest gainers.

Praemium (-35.3%) and Helius (-33.2%) saw sharp falls today; Praemium fell after providing a weaker outlook for the first half of FY24. While Healius completed a $154 million capital raise at a discounted share price of $1.20.

The price of gold breached the US$2,000 mark on Wednesday, continuing its recent rally after the Federal Reserve gave no indication that it would start cutting rates anytime soon. DeGrey Mining (+3.8%) and Perseus Mining (+1.68%) were some of the gold miners that moved higher today.

The Iron Ore price hit 17-month highs today, with futures trading at US$136.50 on continued bullish demand from China. BHP Group (+0.9%) and Rio Tinto (+0.3%) rose, while Fortescue Metals Group (-0.2%) fell.

Economic Data

• Sales of previously owned homes in the U.S. sank 4.1% month-over-month to a seasonally adjusted annualised rate of 3.79 million units in October, the lowest level since August 2010, and below forecasts of 3.9 million.

• Canada’s annual inflation fell to 3.1% in October from 3.8% in September, slightly below market expectations of 3.2%.

Wall Street

Equity markets took a breather on Tuesday in anticipation of Nvidia’s quarterly earnings released after the market close. Markets largely dismissed the Federal Reserve minutes, which were released on Tuesday. Fed officials agreed at their last meeting they could take a cautious approach to raising rates moving forward and would only need to increase them if incoming information showed insufficient progress in lowering inflation. The S&P 500 (-0.20%) and NASDAQ (-0.59%) ended the day lower.

Nvidia reported earnings after the market closed on Tuesday, which beat expectations but did call out anticipated negative impacts from China next quarter. Nvidia’s share price fell by 1.7% in after-hours trading.

• Revenue $18.12 billion vs $16.18 billion est.

• Adjusted Earnings Per Share $4.02 vs. $3.37 est.

• Data Centre Revenue $14.51 billion vs. $12.97 billion est.

• Gaming Revenue $2.86 billion vs. $2.68 billion est.

• Net Income $9.24 billion, up from $680 million in the pcp.

Nvidia grew its revenue by 206% year-on-year for the quarter, with data centre revenue rising by 279%, with half of the revenue coming from cloud infrastructure providers.

Nvidia said sales in China would decline in Q4 due to export restrictions but would be offset by growth in other regions. “We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal 2024, though we believe the decline will be more than offset by strong growth in other regions,” Nvidia’s finance chief, Colette Kress, said.

Nvidia provided guidance of $20 billion in revenue for Q4 - an annual rise of 231%.

In other company earnings, Autodesk rose by more than 4% after the software company beat expectations with revenue of $1.41 billion and adjusted EPS of $2.07. HP Inc. shares fell by 3% of the tech company reported revenue for the quarter of $13.82 billion, which was below estimates of $13.85 billion. Lowe’s cut its full-year sales outlook and missed revenue expectations for Q3 as sales dropped 13% from the prior year.

Outlook

Some of the companies reporting earnings on the ASX tomorrow include AFT Pharmaceuticals, Pacific Edge and My Food Group.

Japan reports CPI tomorrow, while in New Zealand, Q3 Retail sales drop. In the U.S., Durable Goods, Initial Jobless Claims and Crude Oil Inventories all get reported.

Mixed signals on Wall Street, with NASDAQ (-0.09%) futures lower while the S&P 500 (+0.01%) is higher as of this afternoon.

The biggest company of note reporting earnings in the U.S. is Deere & Company.

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Quick Singles

🪃 Local News

• ANZ have told their staff that their annual bonuses could be at risk if they fail to spend at least 50% of their scheduled working hours in the office, following the lead of Origin Energy and Suncorp Group.

• NSW will have an additional one gigawatt of energy by December 2025 thanks to a joint state and federal initiative, partnering with six renewable energy and battery projects, adding more capacity to the state’s supply.

• According to data from the Commonwealth Bank, young Australians are reducing their discretionary spending by pulling back on purchases of items like clothes and household goods.

• The Australian Competition and Consumer Commission (ACCC) has warned shoppers to be on the lookout for online scams ahead of this week’s Black Friday sales. The ACCC said there’s been a spike in fake websites that look like genuine and big-name online retailers.

🌏 Around The Globe

• Binance and its Chief Executive Officer Changpeng Zhao (CZ) pleaded guilty to anti-money laundering and sanction violations. However, the cryptocurrency exchange will still be able to continue operating. Binance will be fined $4.3 billion, while CZ will step down from his role and fork out $50 million in fines.

• According to Bloomberg, India is closing in on an agreement with Tesla to allow the automaker to ship its electric cars to the country starting next year and set up a factory within two years.

• A report from the United Nations indicated that if emission levels continue to increase at their current rate, the Earth's climate will warm by nearly 3°C by the end of this century.

• Elon Musk has filed a lawsuit against Media Matters following the group's report that revealed advertisers' content being displayed alongside antisemitic and Neo-Nazi content on X. The report caused several companies, including Apple and Disney, to pull their ads from the platform.

• Argentina’s newly elected president, Javier Milei, plans to ditch the country’s peso currency and adopt the U.S. dollar instead.

• Cruise co-founder and CEO Kyle Vogt has resigned from his role at the autonomous vehicle venture owned by General Motors. He’ll be replaced by Mo Elshenawy, who previously served as the company's executive vice president of engineering.

• Tinder rolled out a new suite of features with a “rizz-first redesign.” The dating app says the improvements include UI updates, profile prompts and quizzes, dark mode, and more.

• Honda is recalling ~250k vehicles over a manufacturing defect in the engine crankshaft that could cause it to stall or stop while driving.

Markets

ASX Company Movers

Commodity Prices

Bond Prices

ETF Watch

ASX News

🗞️ Company Announcements

• 4D Medical (4DX) has signed agreements to deliver its XVLVAS® scans at imaging facilities located in Detroit and Memphis.

• Bubs Australia (BUB) went into a trading halt today, pending the announcement of a capital raise. The Australian Financial Review reported that Bubs is looking to raise $28 million at $0.125 per share. Bubs closed Tuesday at $0.16.

• Commonwealth Bank (CBA) deputy CEO David Cohen will finish in his role at the end of December, with the role no longer required following the sale of its Indonesian subsidiary, PT Bank Commonwealth.

• EBOS Group's (EBO) deal to acquire pets and vets business Greencross for $3.75 billion has fallen through and will not proceed.

• Healius (HLS) shares sunk 28% as the company completed its $187 million capital raise at $1.20.

• Lovisa (LOV) provided a trading update at its AGM, where it reported a fall in comparable store sales of 6.2% to date, with total sales up 17% due to the continued rollout of new stores.

• Oceania Healthcare (OCA) reported a 2.7% fall in underlying EBITDA for the six months to September to $37.6 million, whilst total assets increased by 6% to $2.7 billion since March.

• Praemium (PPS) shares fell by over 30% after it said that first-half underlying EBITDA would be approximately 20% lower than the same half last year due to lower trading volumes and cash balances.

• Webjet (WEB) bookings rebounded, climbing by 27% during the six months to September, climbing to 4.37 million, with Total Transaction Value rising by 35% to $2.90 billion. Revenue increased by 39% to $244.5 million as the WebBeds business saw booking volumes 50% higher than pre-pandemic.

Social Media

 📱 Post of The Day

Broker Research

Global Lithium Resources

Code: GL1 | Market Cap: $321m  | Current Price: $1.24
Price Target: $3.20 | Sector: Materials | Broker: Shaw & Partners

Overview

Global Lithium (ASX: GL1) is an Australian Lithium explorer wholly owning two key resources, the Manna Lithium project and the Bar Lithium project - both WA-based projects.

Broker Highlights

• Initial metallurgical test work has demonstrated excellent recoveries and spodumene concentrate grades at Manna as GL1 progresses along the pathway to DFS by mid-2024.

• A “Whole of Ore” floatation circuit has been selected, and 31 float tests completed to date have produced a 5.6%-6.5% Li2O SC product with a shallow iron content of 0.4%- 0.8% Fe2O3.

• Depending on the grind size, recovery rates ranged from 70% to over 95%. There is significant potential to reduce lithium losses by selecting less aggressive conditions in the mica flotation and magnetic separation circuits.

Recommendation

The broker is positive on the lithium price following the recent sell-off, noting spot prices should now find cost support. Strong electronic vehicle sales have continued during 2023 in China and worldwide, with market penetration expected to continue.

The broker maintains a Buy recommendation with a price target of $3.20

You can access the full version of the report here.

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Daily Quiz

❓️ Test Your Knowledge

Yesterdays Question. Which company faced a major recall and controversy in 2014 due to faulty ignition switches?

Answer: General Motors. In 2014, General Motors ordered the recall of 2.6 million small cars because of faulty ignition switches that had been linked to at least 97 deaths since 2005. The faulty switches could inadvertently shut off car engines and airbags during driving.

A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of November 16

📊 Broker Ratings

What do the brokers have to say?

1. Adbri (ABC) - Upgrade to Neutral from Sell (Citi)

2. IPH (IPH) - Upgrade to Add from Hold (Morgans)

3. New Hope (NHC) - Upgrade to Neutral from Sell (Citi)

Updated Broker commentary for Webjet, Avita Medical and Technology One

👨‍💼 Director Transactions

What are the insiders doing? (On-market trade only)

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DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.