ASX Gets CHESS Mate | MinRes Sets Deadline

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Welcome to Equity Espresso’s Market Recap.

The S&P/ASX 200 index edged 0.1% higher on Monday to 8,221.5 pts., with Technology (+1.97%) gains offsetting weakness in Energy (-0.54%) and Utilities (-0.58%) sectors. Markets are eagerly anticipating Wednesday's inflation report, which could influence the Reserve Bank's rate decisions, with traders pricing a one-in-three chance of a December cut.

Materials (+0.75%) stocks performed strongly, led by Fortescue (+2.2%), Rio Tinto (+1.7%), and BHP Group (+1.3%), boosted by rising iron ore prices following new Chinese stimulus measures. However, major banks declined, with ANZ down 0.8% after announcing a $196 million charge related to its Suncorp acquisition.

Energy stocks fell as oil prices dropped over 4% following less severe-than-expected Israel-Iran tensions. Brent crude fell to $US72.54, and West Texas Intermediate fell to $US68.37. Beach Energy and Santos declined by 0.4% and 0.6%, respectively.

The board of Mineral Resources (+1.20%) says it will respond by November 4 to tax evasion allegations concerning Managing Director Chris Ellison, who is currently on planned leave. The company has engaged Herbert Smith Freehills, Senior Counsel, and McGrath Nicol to investigate the claims, including pre-2006 matters.

Company News

• ASX (-0.45%) received a "first strike", with 26% of shareholders voting against its executive pay report at Monday's AGM, reflecting investor discontent over management bonuses amid the failed CHESS replacement project.

• Metcash (-2.51%) has extended its supply agreement with Drakes Queensland supermarkets until 2034, covering 22 stores with annual sales of $222.5m. Additionally, Metcash sold its 26% stake in Dramet Holdings to Drakes Supermarkets for $18 million, affecting 21 Queensland and eight South Australian stores.

• Paladin Energy (-15.37%) shares fell, marking its largest daily decline in over a year, after the company warned that its $1.5 billion Fission Uranium acquisition faces uncertainty due to pending Canadian regulatory approval and national security review.

• Temple & Webster (-0.80%) reported slower sales growth, with revenue up 21% from July to October compared to 26% in the first six weeks. Despite cost-of-living pressures, the online furniture retailer maintained margin guidance and its $1 billion medium-term revenue target.

Wall Street

The stock market showed mixed performance on Friday, with the Nasdaq gaining 0.56%, boosted by strong performances from major tech companies, including Tesla (+ 3.36%). The Dow Jones dropped 0.61%, dragged down by Goldman Sachs (-2.27%) and McDonald's (-2.97%), which is dealing with an E. coli outbreak, while the S&P 500 remained relatively flat with a minor decline of 0.03%.

Looking at the weekly performance, only the Nasdaq managed to post gains, rising 0.16%, while the S&P 500 and Dow Jones saw declines of 0.96% and 2.68%, respectively. Market sentiment was influenced by the 10-year Treasury yield, which reached a three-month high of 4.26% earlier in the week, as investors awaited upcoming U.S. employment data for insights into potential Federal Reserve interest rate cuts.

Colgate-Palmolive (-4.14%) shares fell despite exceeding Q3 expectations, reporting adjusted EPS of $0.91 and revenue of $5.03 billion. The company grew with revenue up 2.4% and net income rising 4.1% year-over-year, maintaining a 15% profit margin. L3Harris Technologies (+3.54%) shares climbed after beating Q3 expectations with EPS of $3.34 and revenue of $5.3B. The defence company raised its full-year earnings guidance to $12.95-$13.15 per share.

S&P500 Sector Performance

Economic Data

• U.S. Durable Goods decreased by $2.2 billion or 0.8% to $284.8 billion in September 2024, following a 0.8% decline in August, compared with market expectations of a 1.0% fall.

• China’s Industrial firms dropped by 3.5% YoY to ¥5,228.16 billion in the first nine months of 2024, reversing from a 0.4% growth in the prior period.

• U.S. Consumer Sentiment was revised higher to 70.5 in October 2024 from a preliminary of 68.9, marking a third consecutive month of rises and reaching the highest level in six months.

• Canada’s retail sales are expected to increase by 0.4% from the previous month in September 2024, according to a flash estimate.

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Quick Singles

🌎️ Around The Globe

• Ioneer's Rhyolite Ridge lithium-boron mine in Nevada received federal approval and a $700m loan from the Biden administration. Set to quadruple U.S. lithium production by 2028, the project could power 370,000 EVs annually, reducing Chinese dominance in critical minerals.

• LinkedIn was fined €310 million ($335 million) by Ireland's Data Protection Commission for GDPR violations following an investigation triggered by French authorities. The penalty addresses unlawful data processing for advertising purposes on the professional networking platform.

• Major fast-food chains, including Burger King, KFC, Taco Bell, and Pizza Hut, have removed onions after McDonald's E. coli outbreak, linked to Taylor Farms' supply, caused 49 illnesses and one death across ten states. Quarter Pounders remain unavailable in affected regions.

• The NYSE plans to expand trading hours on its Arca platform from 1:30 a.m. to 11:30 p.m. ET on weekdays, extending from its current 9:30 a.m. to 4:00 p.m. schedule. This 22-hour trading day aims to serve global investors.

• OpenAI is set to release Orion, reportedly 100 times more powerful than GPT-4, by December. The model will first be available to select partner companies, with Microsoft preparing to host it on Azure by November.

• TKO, the parent company of WWE and UFC, is acquiring Professional Bull Riders, On Location, and IMG from Endeavor Group for $3.25B in stock. The deal supports Endeavor's privatisation plans with Silver Lake while expanding TKO's sports entertainment portfolio.

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