Good Evening,

Welcome to Equity Espresso’s Daily Market Recap.

The Australian market fell on Friday, giving back some of yesterday’s massive gains, with the ASX 200 index losing 66.9 pts or 0.85% to finish the week at 7,814.40. For the week, the main index finished 0.8% higher as investors lifted hopes of an interest rate cut in 2024.

Ten of the 11 major sectors finished the day lower, with Technology (-3.05%), Health Care (-2.27%), and Real Estate (-1.76%) losing some of yesterday’s positive movement.

Materials (+0.39%) was the sole sector to finish higher, with the big players BHP Group (+0.79%), Fortescue (+1.24%) and Rio Tinto (+1.35%) all finishing higher. Lithium miner Pilbara Minerals (+2.24%) was another big mover. The price of copper added another 2% overnight to trade at around $4.95/lbs, the highest it has been since February 2022. Robust demand and tight output raised concerns of a supply deficit.

The price of Gold traded above US$2,400 during parts of the session overnight continuing its recent strength as investors continue to assess the mixed US economic data and its impact on the Federal Reserve’s monetary direction.

In company news:

• Lendlease (-2.08%) shares fell after selling half its stake in its Asia Pacific life sciences platform to private equity player Warburg Pincus in a $147 million deal

• SkyCity Entertainment (+0.33%) has agreed to pay $67 million for historical breaches of anti-money-laundering and counter-terrorism laws.

• Dicker Data (-13.15%) shares got whacked after a Q1 trading update, where the company reported a 9.6% decline in Gross Revenue and NPBT of $24.6 million, down 3.1% from the same quarter last week.

• Bendigo & Adelaide Bank's (+8.17%) share price got a lift despite reporting a cash profit fall of 2.3% to $464 million

Wall Street

U.S. stocks closed lower on Thursday after the Dow Jones (-0.10%) reached an intra-day high of 40,000 for the first time before an afternoon sell-down saw the index finish lower. The NASDAQ (-0.26%) and S&P 500 (-0.21%) also finished the day lower. All three of Wall Street’s major indexes had reached record closes on Wednesday after data showed a smaller-than-expected rise in consumer prices in April, indicating that inflation had resumed its downward trend.

Ten out of 11 S&P 500 sectors closed lower, with stocks in Consumer Staples the only one to finish in the green. Looking ahead, according to data from the CME FedWatch Tool, investors are betting on two quarter-point interest rate cuts from the Federal Reserve this year. September has a 70% chance of the first reduction.

Walmart's (+6.99%) stock rose 7% after it lifted its FY25 sales and profit forecast, betting that easing inflation will further boost demand for essentials. The retail giant reported adjusted first-quarter earnings of 60 cents per share, topping the 52 cents expected. Revenue was $161.5 billion, beating the $159.5 billion consensus estimate.

S&P500 Sector Performance

Economic Data

• U.S. Initial Jobless claims fell by 10,000 to 222,000 during the week ending May 11, less than market expectations of 220,000.

• China's Industrial Production expanded by 6.7% year-on-year in April 2024, above market forecasts of 5.5%, faster than a 4.5% gain in the prior month.

• Frances’ Unemployment rate remained unchanged at 7.5% in Q1 of 2024, making it three straight quarters.

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Quick Singles

🌎️ Around The Globe

• Frank McCourt, billionaire and former owner of the Los Angeles Dodgers, is reportedly assembling a ‘people bid’ to buy TikTok’s U.S. business.

• Anthropic, the creator of chatbot Claude AI, has hired Instagram co-founder Mike Krieger as its chief product officer.

• Netflix will stream Christmas Day NFL games for the next three years, paying around $150 million for two games this December.

• Berkshire Hathaway has bought nearly 26 million shares of Zurich-based Chubb for a stake worth $6.7 billion.

• Microsoft is asking some of its China-based staff who are involved in machine learning work to consider transferring outside the country as tensions between the U.S. and China heat up.

• Toyota Motors had to repeatedly stop production at a Mexico plant in February and March due to local labor shortages affecting suppliers.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

Global Health Check

ETF Prices

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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 the end of April 2024.

Newsletter Recommendation

A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of May 10

📂 Broker Reports

1. Fonterra Shareholders Fund (FSF) - Upgrade to Outperform from Neutral (Macquarie)

2. PSC Insurance (PSI) - Downgrade to Neutral from Buy (UBS)

👨‍💼 Director Transactions

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

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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 decisions.