Banks Boost ASX to New Heights

Good Evening,

Welcome to Equity Espresso’s Market Recap.

The Australian sharemarket reached a new record closing high on Tuesday, with the S&P/ASX 200 Index rising 0.8% to 8,318.4 points. This rally was primarily driven by strong performance in the major banks and supported by nine out of eleven sectors making gains. The positive momentum was influenced by a strong session on Wall Street, where the S&P 500 also hit a new peak due to increased demand for tech stocks, particularly chipmakers.

The Financials (+1.32%) sector led the gains, with the big four banks among the top performers. Commonwealth Bank saw the most significant increase at 1.8%, followed by Westpac at 1.6%, National Australia Bank at 1.5%, and ANZ at 0.9%. This strong showing in the banking sector was key in pushing the market to new heights.

The Materials (+0.59%) sector also contributed to the market's positive performance, albeit with more modest gains. Despite a slight dip in iron ore futures in Singapore, major mining companies still saw increases. Fortescue Metals rose 2.3%, while BHP Group and Rio Tinto saw gains of 0.5% and 0.9%, respectively.

The Energy (-1.25%) sector was the worst peformer on the ASX, as oil prices fell for a third session. Reports of Israel potentially avoiding Iran's crude infrastructure eased supply disruption concerns, causing Brent futures to drop nearly 3%. This impacted energy stocks, with Woodside Energy falling 2.2% and Santos down 1%.

Company News

• Ampol (-2.33%) shares fell despite announcing a $50 million cost-cutting plan for 2025. The company reported 6.5 billion litres in fuel sales for Q3 2024, with growth in shop sales. However, performance was impacted by planned refinery maintenance and weaker product cracks. Ampol plans additional maintenance in November, reducing production at its Lytton refinery.

• Hub24's (+2.7%) shares rose after reporting record quarterly net inflows of $4 billion, pushing total funds under administration to $113 billion. The company's platform FUA increased 8% to $91.6 billion, driven by strong inflows and positive market movements.

• Tyro Payments (-11.05%) got whacked after the federal government announced plans to potentially ban debit card surcharges from January 1, 2026, pending a Reserve Bank review. While the total impact of these surcharges on Australians is unclear, Assistant Treasurer Stephen Jones emphasised their significant cumulative effect on consumers' wallets.

• IDP Education (-7.44%) fell after it warned that it expected international education student volumes in its markets to “decline 20% to 25% in the year ahead”.

Wall Street

Wall Street ended on a high note Monday, with the S&P 500 (+0.77%) and Dow Jones (+0.47%) reaching new record closes. The rally was primarily driven by solid performances in the Technology (+1.36%) sector, particularly in semiconductors. The semiconductor index jumped 1.8% to a two-month high, bolstered by Arm Holdings' 6.8% advance and Nvidia's 2.4% rise to a record close.

Major tech stocks, including Alphabet, Apple, Microsoft, and Tesla, also saw significant increases ranging from 0.6% to 1.6%. This positive momentum comes ahead of a crucial week filled with corporate earnings reports and important economic data releases, highlighting investors' optimism in the tech sector's continued growth and its potential impact on the broader market.

SoFi Technologies' shares surged 11.4% following the announcement of a $2 billion loan platform business agreement with Fortress Investment Group. Sirius XM Holdings' stock jumped 7.9% after Warren Buffett's Berkshire Hathaway disclosed an increased stake in the company. Berkshire purchased approximately 3.6 million additional shares last week, bringing its total holdings to over 108 million, as revealed in a recent securities filing.

S&P500 Sector Performance

Economic Data

• U.K. Average Earnings increased 4.9% year-on-year to £648/week in the three months to August 2024, a fresh low since June 2022, following a 5.1% rise in the previous period and in line with market estimates.

• Germany’s wholesale prices dropped by 1.6% year-on-year in September 2024, steeper than a 1.1% decline in the previous month. This marked the 17th straight month of falling producer prices and the fastest decrease since April.

Sponsor

What do Nvidia and Amazon have in common?

Well, other than trillion-dollar market caps. Both Nvidia and Amazon chose to collaborate with Miso. Miso’s the leader in AI-powered kitchen robots. That’s why Nvidia offered Miso its premier AI vision tech, and Amazon handpicked Miso to partner and use its RoboMaker simulation environment. Now, Miso launched their first commercial AI-powered robot, and it sold out in seven days. On the back of that success, they’re focused on scaling to 170+ US fast food brands in need.

Invest in Miso by 10/18.

Quick Singles

🌎️ Around The Globe

• 7-Eleven announced the closure of 444 "underperforming" locations across North America, representing 3% of its 13,000-store portfolio. Parent company Seven & I Holdings cited factors including slowing sales, declining traffic, inflation, and decreased cigarette purchases as reasons for the closures. Specific store locations affected were not immediately disclosed.

• Apple is reportedly planning to launch a more affordable version of its Vision headset, priced at $2,000, potentially as early as next year. This lower-end model aims to address the disappointing sales of the $3,500 Vision Pro, offering a more accessible entry point into Apple's mixed reality ecosystem.

• Boeing announced a 10% workforce reduction, cutting 17,000 jobs, amid financial and reputational challenges. CEO Kelly Ortberg cited concerns about competitiveness, delaying the 777X program and halting 767 production.

• Global electric and plug-in hybrid vehicle sales increased by 30.5% year-over-year in September, driven by record-breaking numbers in China and renewed growth in Europe. The U.S. market showed steady but slower gains.

• Stellantis announced CEO Carlos Tavares will retire in early 2026 when his contract expires. The company has begun searching for his replacement, aiming to have a successor in place by Q4 2025. Additionally, Stellantis is implementing other management changes, including appointing Santo Ficili as CEO for both Alfa Romeo and Maserati brands.

• SpaceX achieved a significant milestone in its fifth Starship test flight over the weekend. The company successfully launched the Super Heavy Starship rocket and, for the first time, used giant "mechazilla" mechanical arms to catch and return the first-stage booster to the launch pad in Texas.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

Global Health Check

ETF Prices

🔍️ ETF Watch

Want to see how one of your ETFs compares to the rest?

Please reply to this e-mail and tell us an ETF or two you want to be included in the tables below.

Australian Index

Australian Sectors

Global Indices & Sectors

Global Strategy

Property & Infrastructure

Fixed Income

Mixed Assets

*1-year, 3-year and 5-year returns are calculated as of September 30 2024.

The Last Word

How are we doing?

We always love hearing from our readers and are constantly seeking feedback.

• How are we doing with Equity Espresso?

• Is there anything you’d like to see more of or less of?

• Which aspects of the newsletter do you enjoy the most?

Hit reply and say hello - or leave us feedback in the poll below:

If you enjoyed this newsletter, forward this e-mail to a friend.

If you’re that friend, subscribe here.

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