China Stimulus Falls Flat, Tech and Bitcoin Continue To Surge

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Welcome to Equity Espresso’s Market Recap.

The Australian share market fell 0.35% to 8,266.20 points on Monday, despite only four sectors finishing in the red, with Materials (-2.80%) and Energy (-0.67%) stocks leading the downturn following disappointing economic stimulus measures from China. Consumer Staples (-1.84%) also saw a sharp fall after Endeavour Group warned of lower profits, sending its share price to a record low. Technology (+1.39%) and Real Estate (+1.24%) gains partially offset the losses, with Wisetech Global (+2.65%) and Goodman Group (+2.44%) leading their respective sectors higher.

Mining giants were particularly affected, as Iron Ore and oil prices fell after Beijing's latest economic measures fell short of expectations amid looming U.S. tariff threats. BHP Group (-3.99%) and Rio Tinto (-3.46%) both fell sharply, while Fortescue (-7.32%) shares were savaged. Beach Energy (-1.56%) and Ampol also retreated 1.4% and 0.8%, respectively.

On Friday, China unveiled a 10 trillion yuan (US$2.1 trillion) fiscal support package, with 6 trillion yuan allocated immediately and an additional 4 trillion yuan available through special local bond quotas over five years, aimed at helping local governments restructure their mounting debt obligations.

Gold dipped to around US$2,670/oz on Monday, marking a second consecutive decline as markets brace for U.S. inflation data set to drop on Wednesday. Bitcoin continues to soar, crossing US$81,000 as investors bet that Donald Trump’s return as President will be a positive for Cryptocurrency.

Company News

• Endeavour Group (-4.86%) shares plunged to a record low of $4.50 after warning of lower profits due to flat sales and increased promotions. The company expects a first-half FY25 retail earnings margin of 7-7.5% while maintaining other financial guidance.

• HMC Capital (+4.05%) rose after announcing plans to launch a $4 billion data centre REIT, including the $400 million acquisition of iseek. The company has secured $2.5 billion in Australian assets and is conducting due diligence on $1.6 billion of North American data centres.

• Incitec Pivot (+0.32%) reported a $311 million net loss in FY24, compared to the previous year's $560 million profit, following asset sales and facility closure. The companies dividend was reduced to 10.6¢

• Liontown Resources (+0.60%) says it aims to focus on higher-margin ore at Kathleen Valley, targeting unit costs of $775-855 million DMT in H2 FY25 amid falling lithium prices. The revised plan will achieve 2.8 million tonnes annually by FY27-end and deliver up to $100 million in cost savings.

• Qube (+0.53%) maintained its FY25 guidance despite projecting lower first-half earnings due to increased borrowing costs, weaker Patrick earnings, and MITCo joint venture losses. The company plans to generate $180-250 million through asset sales by early FY26, starting with NSW property.

• Resolute Mining's (-32.84%) CEO, Terence Holohan, and two employees have been temporarily detained by the military-controlled government of Mali, while in Bamako for discussions with mining and tax authorities.

• PointsBet (+10.17%) has denied media speculation from The Australian's November 8 article about a potential transaction, stating that the company is not in any discussions as suggested in the report.

• Stockland (+2.18%) raised its FY25 funds from operations guidance to 33-34¢ per share and received approval for a $1.1 billion residential communities acquisition.

Wall Street

U.S. stock markets closed a milestone week higher, with the S&P 500 (+0.38%) approaching the 6,000-point mark and the Dow Jones (+0.59%) surpassing 44,000 for the first time, driven by Donald Trump's election victory and the Federal Reserve's quarter-point rate cut.

Friday’s rally was particularly strong in rate-sensitive sectors like Real Estate (+1.66%) and Utilities (+1.79%), benefiting from falling Treasury yields, though yields remained near four-month highs. However, the positive sentiment was somewhat tempered by disappointment over China's fiscal support measures and concerns about potential inflation risks from the incoming administration's proposed tariffs, leading markets to reduce expectations for Federal Reserve rate cuts in 2025.

Major indices posted their best weekly gains since late 2023, with the S&P 500 rising 4.66%, the Nasdaq climbing 5.74%, and the Dow advancing 4.61%, while the small-cap Russell 2000 recorded its largest weekly gain since April 2020, up 8.51%.

Tesla's (+8.19%) stock soared, catapulting the electric vehicle giant's market capitalisation beyond $1 trillion. The surge made it a 29% weekly rally, fueled by investor confidence following former President Trump's return to office. Pinterest's (-14.00%) stock dropped despite exceeding Q3 earnings expectations, with revenue of $898 million and adjusted EPS of 40 cents versus expected $896 million and 34 cents, respectively.

S&P500 Sector Performance

Economic Data

• Canada’s Unemployment Rate stood at 6.5% in October, unchanged from September and slightly below market expectations.

• China’s Annual Inflation rate stood at 0.3% in October 2024, compared with market estimates and September’s figure of 0.4%.

• China's Producer Prices fell by 2.9% year-on-year in October 2024, following a 2.8% drop in the previous month and exceeding market expectations of a 2.5% decline.

• U.S. Consumer Sentiment increased to 73 in November, the highest in seven months, compared to 70.5 in October and above forecasts of 71.

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Quick Singles

🌎️ Around The Globe

• Anthropic has partnered with Palantir and AWS to provide Claude AI to U.S. intelligence agencies through a highly secure platform. The collaboration enables classified data analysis and intelligence work.

• Meta is launching a Los Angeles pop-up store called Meta Lab to showcase Ray-Ban Meta Smart Glasses through December.

• Nissan plans to cut 9,000 jobs globally and reduce production by 20% following losses in late 2023. While facing global market challenges and E.V. competition from China, the cuts aren't expected to impact its Sunderland UK factory.

• Roblox has implemented new safety measures restricting users under 13 from accessing unrated content. Creators must now complete questionnaires to make their experiences available to children.

• Sotheby's announced its historic debut live auction in Saudi Arabia, titled "Origins," scheduled for February 8, 2025, in Diriyah - marking the first international auction ever held in the kingdom.

• TikTok has launched a "Share to TikTok" feature enabling users to directly share Apple Music and Spotify content to their feeds, Stories, and DMs.

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

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