Good Evening,

Welcome to Equity Espresso’s Daily Recap. 

The ASX 200 index finished higher on Friday, climbing 0.4% or 32.4 pts. to 7,643.60, lifted by a record close on the S&P 500 as a blockbuster profit report from artificial intelligence company Nvidia lifted Technology stocks across Wall Street.

The Aussie Technology (+1.52%) sector followed the NASDAQ bumper session on Thursday, leading the way of the nine sectors to finish higher. Wistech (+1.1%), Xero (+2.8%) and Altium (+0.2%) all ended higher. Discretionary (+1.49%) stocks were another significant sector winner on Friday, with Wesfarmers (+2.1%) and Aristocrat Leisure (+2.3%) the major movers.

Company earnings reports continued to roll in on Friday as we hit the tail-end of the reporting season. Aussie Broadband (+18.5%) was a big winner after it beat profit growth and subscriber forecasts in its half-year report. The internet service provider reported a 15% increase in net profit to $9.8 million, with broadband connections up 20% to 765,806. Jumbo Interactive was another big mover after it reported an 18.4% lift in revenue to $73.9 million, lifting its interim dividend by 14.5% to 33.1 cents per share.

Brambles’ (+0.59%) share price barely budged despite reporting a lift in NPAT of 17% to US$392.1 million in the first half of the fiscal year. The pallets and logistics company increased its full-year underlying guidance to between 13% and 15%.

Shipbuilder Austal (-12.6%) shares sunk even after they swung to a net profit of $12 million during the first half of the fiscal year, a revelation from the $7.3 million loss in the same period.

Wall Street

The S&P 500 and Dow Jones Industrial Average recorded another closing high on Friday, with all three of Wall Street’s leading indices nothing up weekly gains, as artificial intelligence stocks related stocks kept the recent market rally going.

Nvidia briefly hit $2 trillion in market cap on Friday following its bumper revenue forecast on Thursday, which saw it increase in market value by $277 billion - the largest one-day gain in Wall Street history.

In company news, Warner Bros. Discovery (-9.9%) shares dropped after reporting Q4 earnings that missed analysts’ estimates, with a loss of 16 cents per share vs. expectations of a 7 cents per share loss. Block (+16.5%) shares rose after reporting quarterly revenue of $5.77 billion - ahead of the $5.70 billion expected. Adjusted earnings per share was $0.45, with the company’s Cash App business reporting $1.18 billion in Gross Profit - a 25% rise year-on-year.

Economic Data

• U.S. Natural Gas Futures continue to fall, dropping by more than 6% to $1.6/MMBtu on Friday, driven by abundant supply, ample storage, and reduced heating demand amid a mild winter in the United States.

• The Brazilian Consumer Confidence Index fell by 1.1 pts to 89.7 pts. in February, its lowest point since May 2023.

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Quick Singles

🌎️ Around The Globe

• Cocoa prices continue to climb, rising to a record $6,400 per tonne, driven by shortages, with output from West Africa continuing to be lower due to adverse weather conditions. The region contributes around 70% of the world’s cocoa requirements.

• Around 153,000 people were notified by the White House yesterday that their Student Repayment Loans had been forgiven under President Joe Biden’s new SAVE repayment plan. The program applies to anyone paying off loans of $12,000 or less for at least ten years.

• Apple has released a new app - Apple Sports - which shows real-time scores, stats, and betting lines powered by DraftKings.

• Beyond Meat is launching a new, healthier version of its burger as it aims to reverse falling sales. The new product will be launched during the Northern Hemisphere Spring.

• Uber Eats has partnered with robotics firm Cartken to add robot drivers to its delivery team. The robots will be responsible for delivering Uber Eats orders.

• Google has unveiled Gemma, a new open-source family of AI models, allowing developers to build freely on language capabilities from its proprietary Gemini without restrictions.

• Reddit will offer shares to the top 75,000 users at the issue price once it hits the stock market as it looks to build loyalty amongst its user base.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

ETF Data

Global Health Check

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A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of February 19

🗂️ Broker Ratings

1. Auckland International Airport (AIA) - Upgrade to Buy from Neutral (Citi)

2. Eagers Automotive (APE) - Upgrade to Buy from Hold (Bell Potter)

3. Bega Cheese (BGA) - Upgrade to Hold from Lighten (Ord Minnett)

4. Clinuvel Pharmaceuticals (CUV) - Downgrade to Hold from Add (Morgans)

5. HMC Capital (HMC) - Downgrade to Hold from Add (Morgans)

6. Insignia Financial (IFL) - Downgrade to Sell from Neutral (Citi)

7. Iluka Resources (ILU) - Downgrade to Neutral from Outperform (Macquarie)

8. Lovisa Holdings (LOV) - Upgrade to Buy from Neutral (Citi)

9. Qube Holdings (QUB) - Downgrade to Accumulate from Buy (Ord Minnett)

10. SSR Mining (SSR) - Downgrade to Neutral from Buy (UBS)

11. Super Retail (SUL) - Upgrade to Add from Hold (Morgans)

12. Tabcorp Holdings (TAH) - Upgrade to Outperform from Neutral (Macquarie)

13. The Reject Shop (TRS) - Upgrade to Buy from Accumulate (Ord Minnett)

14. The Reject Shop (TRS) - Downgrade to Equal-weight from Overweight (Morgan Stanley)

15. Woolworths Group (WOW) - Downgrade to Neutral from Buy (UBS)

👨‍💼 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.