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Welcome to Equity Espresso’s Daily Market Recap.

The market rebounded on Thursday, reversing two days of losses, with the main ASX 200 index gaining 34.2 pts. or 0.4% to 7,749.70 following another bumper session on Wall Street which saw the Nasdaq and S&P 500 hit all-time highs for the third day running.

The biggest news overnight was the May U.S. CPI data, which showed that inflation continues to cool, coming in at 3.3%, marginally below expectations of 3.4%.

Locally, employment data surprised to the upside, with workers losing or leaving their job falling to a near-record low. The jobless rate fell to 4.0% in May, down from 4.1% in April, as 39,700 people found work, according to data from the Australian Bureau of Statistics. 

Nine of the 11 major sectors closed higher, with interest-rate sensitive stocks gaining the most, with Technology (+2.14%), Health Care (+1.60%) and Real Estate (+1.22%) leading the way.

NextDC (+3.56%) was the big mover in the tech. sector, hitting an all-time high share price of $18.34, while Wisetech Global (+2.04%) and Xero (+2.30%) continued their steady rise. In the healthcare sector, CSL (+2.03%) was a big mover, as was ProMedicus (+2.40%), which closed at an all-time high price for the fourth day running.

In company news:

• Sigma Healthcare (-3.73%) fell on concerns raised by the ACCC surrounding the proposed acquisition of Chemist Warehouse. “This is a major structural change for the pharmacy sector, involving the largest pharmacy chain by revenue merging with a key wholesaler to thousands of independent pharmacies that in turn compete against Chemist Warehouse,” ACCC Commissioner Stephen Ridgeway.

  said.

• ASX Ltd. (-8.01%) plunged to a six-month low after the stock market exchange flagged rising technology costs, forecasting total expense growth of 15% - which was at the top end of guidance.

Wall Street

The S&P 500 (+0.9%) and NASDAQ (+1.5%) posted record closing highs for a third straight day on Wednesday after May’s inflation rate came in softer than expected at 3.3%. The Dow Jones (-0.1%) fell for the second straight day.

Seven sectors finished the session higher, with Technology (+2.46%) the big mover thanks to a jump from Oracle (+13.32%) after it announced cloud deals with Google and OpenAI. Oracle is also partnering with Microsoft and OpenAI to deliver supplemental computing capacity.

Energy (-1.09%) and Consumer Staples (-1.00%) were the worst performers on the day. Apple (+2.86%) shares gained further ground on Wednesday, briefly overtaking Microsoft as the world’s most valuable company. Rentokil Initial

S&P500 Sector Performance

Economic Data

• Australia’s Unemployment rate fell to 4.0% in May, following April’s three-month high of 4.1%, in line with market forecasts. The number of unemployed individuals fell by 9,200 to 598,800.

• Australia’s Employment increased by 39,700, the most in three months, to 14,355.600 in May 2024, easily beating market forecasts of a 30,000 gain.

• U.S. Annual Inflation rate came in at 3.3% during May, below forecasts of and last month’s figure of 3.4%. Inflation eased from last month for food, shelter, transportation and apparel. Energy costs, however, rose more (3.7% vs 2.6%).

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🌎️ Around The Globe

• Elon Musk has officially withdrawn his lawsuit against OpenAI, one day before a key court hearing. In the previous filing, Musk accused OpenAI of abandoning its mission of ‘developing AI for the benefit of humanity’.

• Google is launching a new advertising network that serves targeted ads to Google TV-powered streaming boxes and smart TVs.

• Raspberry Pi, maker of tiny single-board computers, saw its shares pop 38% in its debut on the London Stock Exchange.

• South Korea has decided to extend a market-wide ban on stock short-selling through the first quarter of 2025. Before resuming the trading strategy, the government will focus on developing a system to control illicit trading practices.

• Warner Bros. Discovery will be the new exclusive U.S. broadcaster of the French Open tennis tournament beginning in 2025, signing a 10-year contract valued at around $65 million per year.

• Walmart is adding electronic shelf labels to over 2,000 stores by 2026, cutting the time it takes for workers to change prices from two days to a few minutes.

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