ASX Bounces Back: Utilities Lead Gains While Energy Suffers

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Welcome to Equity Espresso’s Daily Recap. 

The Aussie market rebounded on Wednesday after a two-day losing streak as the ASX 200 index added 34.2 pts. or 0.5% to close at 7,615.80. Seven of the 11 sectors closed higher, with Utilities (+1.74%) and Real Estate (+1.11%) leading the way, with Energy (-0.95%) and Discretionary (-0.72%) being the biggest fallers.

Origin Energy (+2.66%) and Mercury NZ (+4.0%) were the biggest movers in the Utilities sector, while in the Energy space, Santos (-5.85%) dragged the index lower after discussions with Woodside Energy over a potential $80 billion merger ended without a deal.

National Australia Bank was the big story today. CEO and Managing Director Ross McEwan said he would step down in April to be replaced by Andrew Irvine, the company’s group executive business and private banking lead. NAB shares finished the day 0.2% lower.

Lithium miners were among the better performers today, with Pilbara Minerals (+5.62%) rising after revising its spodumene-concentrate supply deal with lithium chemicals producer Chengxin Lithium Group. Liontown Resources (+5.6%) and Core Lithium (+2.8%) also finished the day higher.

Amcor (+1.40%) shares rose after it said it would cut 2,000 jobs. The company's half-year report showed a fall to US$286 million from US$691 million in the prior year. Dexus (+5.60%) reported a statutory net loss of $10.2 million in the first half of FY24, driven by write-downs on the value of the listed landlord’s properties.

Cettire was one of the big movers today, with its share price rising 25.2% after it recorded an 89% jump in sales during the first half of FY24 vs. the prior year.

Wall Street

The S&P 500 (+0.23%) rose slightly higher on Tuesday after a mixed bag of earnings from large U.S. companies, as investors digested comments from Federal Reserve policymakers about its planned interest rate cuts. The NASDAQ (+0.07%) also finished marginally higher, while the Dow Jones (+0.37%) also made ground. With over half of S&P 500 companies having reported earnings, 81.2% surpassed expectations. Overall, S&P 500 earnings are expected to have risen 8.1% in the fourth quarter from the year before.

GE HealthCare Technologies finished up 11.6% after the Medtech company posted better-than-expected fourth-quarter earnings, driving the healthcare sector to an all-time high. Palantir Technologies shares soared 30.8% after reporting $608.4 million in revenue for the quarter, versus the $602.4 million expected by analysts. Eli Lilly announced Q4 revenue and adjusted earnings that exceeded expectations due to the successful launch of its new weight loss drug, Zepbound, and increased prices for its popular diabetes treatment, Mounjaro. Zepbound, which U.S. regulators approved in November, generated $175.8 million in sales during the quarter.

In after-hours trade, Snap shares plunged by more than 30% after missing its revenue estimates, reporting quarterly revenue of $1.36 billion vs. analysts’ expectations of $1.38 billion.

Economic Data

• U.S. Consumer Debt surged by US$212 billion, or 1.2%, from the prior quarter to fresh highs of $17.50 trillion as of December. Credit card balances, which are now at $1.13 trillion outstanding, increased by $50 billion (or 4.6%).

• The New Zealand Unemployment Rate rose to 4% in the three months ending December 23, the highest level since June 2021, up from 3.9% in the prior quarter.

• South Korea posted an account surplus of $7.41 billion in December, up from $3.89 billion the previous month. This makes it eight consecutive months of surplus.

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Quick Singles

🌎️ Around The Globe

• KoBold Metals has announced the discovery of a massive copper deposit in Zambia. This rare discovery could potentially help in the global race to secure a supply of materials critical to the energy transition.

• Egypt's Suez Canal revenue dropped significantly in January primarily due to attacks by Yemeni insurgents on Red Sea vessels, which led to major shipping companies avoiding the waterway. In January 2021, the canal's income was around $428 million, which is nearly half of the $804 million earned during the same period in 2020.

• A federal judge in the United States has scheduled a jury trial to commence in September. The U.S. Justice Department and a group of states filed a lawsuit last year against Google. They accused the company of abusing its power over digital advertising technology.

• The Dutch parent company of Yandex, a pioneering tech company in Russia, is selling its operations in the country for just over $5 billion. The buyers are Yandex's Russia-based managers and oil company Lukoil.

• Samsung Electronics' executive chairman, Jay Y. Lee, has been found not guilty of charges of stock price manipulation and accounting fraud related to the 2015 merger of Samsung affiliates.

• Microsoft has announced that it will be making some of its Xbox-exclusive titles available on both PlayStation 5 and Nintendo Switch consoles. The company will share more details about its plans to bring games like Hi-Fi Rush to these platforms at an upcoming business update event.

• Disney’s ESPN, Fox Corporation, and Warner Bros. Discovery are uniting to create a platform to house their sports assets under a single streaming roof. Consumers will gain access to NFL, NBA, MLB, NHL, and FIFA World Cup games on the platform.

Markets

ASX Company Movers

Commodity Prices

Bond Prices

A Little Extra

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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.