Good Evening,

Welcome to Equity Espresso’s Daily Recap. 

The ASX 200 index hit a record high on Friday, making it six positive sessions in the last seven gaining 46.9 pts. or 0.61% to close at 7,745.60 in another late afternoon rally. The index gained 1.3% for the week, following in the footsteps of the U.S., which rose overnight with the NASDAQ also hitting its all-time high.

Eight of the 11 sectors finished in the green; Materials (+1.99%) were the best performers despite Iron Ore's future prices holding steady at US$117.50. BHP Group (+2.25%), Fortescue (+1.08%) and Rio Tinto (+0.88%) all recorded gains, while Lithium miners continued their recent mini-resurgence, which saw Pilbara Minerals (+4.29%) and IGO (+4.53%) both close higher.

Technology (+1.87%) continued its positive run, with Xero (+5.99%) and Life360 (+38.48%!) the big movers in the sector (more on Life360 below!). Xero reiterated its FY24 outlook yesterday as it targets an operating expense-to-operating revenue ratio of around 75%. Health Care (-1.52%) had the most significant drop of the three sectors in the red, with CSL (-1.36%), Cochlear (-3.90%) and Sonic Healthcare (-2.35%) the biggest fallers.

In ASX company news:

• Life 360 (+38.5%) was by far and away the big winner on the All Ordinaries after it reported a 33% revenue increase to US$305 million for 2023, with adjusted EBITDA of US$20.6 million. This was ahead of previous guidance of US$12 million to US$16 million. Global Monthly Active Users (MAU) grew by nearly 13 million or 26% to 61.4 million.

• Dubber remains suspended from trading after it said that up to $26.6 million had gone missing from a term deposit account. Chief Executive Steve McGovern has been suspended with immediate effect.

• Syrah Resources (+13.2%) signed an offtake agreement with Posco Future M Co. for natural graphite fines from Syrah’s Balama Graphite Operations in Mozambique.

Wall Street

The NASDAQ hit a record-high close on Thursday, beating its previous high set in November 2021, rising by 0.90% or 144.18 pts. to 16,091.92 with the recent artificial intelligence rally led by Nvidia driving the tech-heavy index to a new record. The S&P 500 (+0.52%) also ended Thursday’s session higher, as did the Dow Jones (+0.12%).

Monster Beverage (+5.8%) shares after it reported strong January sales and expanded its gross margins. Hormel Foods (+14.6%) shares rose after beating first-quarter earnings and revenue expectations. The food processing company reported revenue of $3 billion, with earnings of $0.41 - beating estimates of $2.91 billion and $0.34.

Economic Data

• Indonesia's Annual Inflation rose to 2.75% in February, up from 2.57% in January and ahead of expectations of 2.60%.

• China’s Manufacturing PMI rose to 50.9 in February 2024, up from 50.8 in the past two months - beating estimates of 50.6.

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Quick Singles

🌎️ Around The Globe

• Github, the site that hosts millions of code repositories, has come under attack by malicious repositories acting as clones of legitimate ones that steal passwords or cryptocurrency.

• Coinbase users’ accounts were shown a “zero balance” on Wednesday afternoon; however, the crypto exchange said customers ’ funds were safe, with the outage caused by increased traffic to the website.

• Google has been hit with a $2.3 billion antitrust lawsuit by Axel Springer and other European media companies who claim the company’s digital ad policies harmed them.

• Stripe has secured a deal with investors valuing the company at $65 billion, lower than the last round of funding, where the company was valued at $95 billion.

• Tesla said it would aim to release its electric sports car called the Roadster next year, according to CEO Elon Musk.

• Electronic Arts plans to cut 5% of its employees, costing the company between $125 million and $165 million.

• Wendy’s issued a clarification - it’s not planning on implementing surge pricing after consumers reacted badly to the company saying it planned to roll out dynamic pricing next year.

• Adobe showcased Project Music GenAI Control, a prototype that simplifies generating and editing audio using AI. The tool enables creators to create personalised music tracks by providing text prompts.

   

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A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of February 26

🗂️ Broker Ratings

1. Pentanet (5GG) - Downgrade to Hold from Buy (Bell Potter)

2. Australian Finance Group (AFG) - Upgrade to Neutral from Sell (Citi)

3. Collins Foods (CKF) - Downgrade to Sell from Neutral (Citi)

4. Cromwell Property (CMW) - Downgrade to Hold from Accumulate (Ord Minnett)

5. Harvey Norman (HVN) - Downgrade to Lighten from Hold (Ord Minnett)

6. Orica (ORI) - Downgrade to Neutral from Buy (Citi)

7. Pepper Money (PPM) - Upgrade to Outperform from Neutral (Macquarie)

8. Service Stream (SSM) - Upgrade to Outperform from Neutral (Macquarie)

👨‍💼 Director Transactions

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

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 financial decisions. We strongly recommend conducting your own research before making any investment decisions.