Good Evening,

Welcome to Equity Espresso’s Daily Market Recap.

The Australian stock market closed higher on Wednesday, with the Materials (+1.19%) sector leading the way, helped by the federal budget announcement of support for the critical minerals sector. The ASX 200 index gained 26.9 pts. or 0.35% to 7,753.70 as eight sectors finished in the green.

Some mining sub-sectors saw gains, including in the critical mineral sector, after the federal government announced $17.6 billion in tax credit support. Hydrogen will also receive a $6.7 billion tax incentive. Arcadium Lithium (+2.83%) and Silex Systems (+2.08%) were some of the companies that benefitted from the announcement.

BHP Group (+2.2%) gained ground despite its takeover target Anglo American announcing a plan to divest its assets and narrow in on its potash, copper and iron ore assets

In company news:

• Australian Agricultural Company (-1.42%) fell after reporting a full-year loss of $94.6 million. The company's challenging year was driven by weaker cattle prices.

• Iperionx (-4.25%) fell after completing its $50 million capital raise.

• Patriot Battery Metals' (-5.33%) shares slumped after its nine-month contract with Canadian mining giant Albemarle failed to become a formal deal.

• Southern Cross Media (0.00%) has rejected ARN Media’s attempt to revive its acquisition plans.

Wall Street

U.S. stocks rose on Tuesday, with the NASDAQ (+0.75%) leading the charge, closing at a record higher, while the S&P 500 (+0.48%) and Dow Jones (+0.32%) both gained ahead of April’s key inflation data set to drop on Wednesday.

U.S. producer prices increased more than expected in April as the cost of services and goods rose sharply. Investors were also encouraged by Federal Reserve chair Jerome Powell's comments that he did not expect the central bank's next interest rate move to be a hike.

It feels like 2021 (just without the Covid). Meme stocks surged for a second day running, led by the OG GameStop, which rose by almost 60% today after a 70% rise on Monday. AMC (+30.98%) followed suit, another stock popular among the retail traders

What is causing the surge in these meme stocks? The return of “Roaring Kitty” - real name Keith Gill, who posted online for the first time in almost three years. Mr.Gill was one of the leaders of the WallStreetBets Reddit forum, which inspired a wave of GameStop buying in 2021.

S&P500 Sector Performance

Economic Data

• U.S. Producer Price Inflation increased by 0.5% month-on-month during April, ahead of market expectations of a 0.3% increase after a 0.1% fall in March.

• Argentina’s Central Bank slashed benchmark interest rates to 40% from 50% at its May meeting, making six consecutive rate cuts since December as inflation growth slows.

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Quick Singles

🌎️ Around The Globe

• OpenAI debuted GPT-4o on Monday, a new advanced multimodal model that integrates text, vision and audio processing, setting new benchmarks for performance.

• Squarespace is set to be taken off the stock market. U.K. private equity firm Permire will buy the web design platform at a $6.6 billion valuation.

• Kraft Heinz is exploring a sale of its Oscar Mayer meats business that could fetch between $3 billion and $5 billion, according to the Wall Street Journal.

• Cocoa futures prices dipped more than 19% on Monday to levels not seen since March but are still up 137% over the past year.

• SoftBank Group subsidiary Arm plans to launch artificial intelligence chips by Spring 2025. The company is discussing with contract manufacturers, including Taiwan’s TSMC, to produce the chips.

• Meta is in the early stages of designing AI-enabled headphones called “Camerabuds,” which feature outward-facing cameras to detect surroundings and power real-time AI features.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

Global Health Check

ETF Prices

🔍️ ETF Watch

The new and improved ETF Watch section.

Want to see how one of your ETFs compares to the rest? Reply to this e-mail and tell us an ETF or two you want included in the tables below.

Australian Index

Australian Sectors

Global Indices & Sectors

Global Strategy

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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 9

📂 Broker Reports

1. ARB Corp. (ARB) - Upgrade to Neutral from Underperform (Macquarie)

   FleetPartners Group (FPR) - Downgrade to Accumulate from Buy (Ord Minnett)

2. Qube Holdings (QUB) - Upgrade to Buy from Neutral (UBS)

👨‍💼 Director Transactions

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

The Last Word

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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.