From Shareholder Revolts to Crypto Records

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Welcome to Equity Espresso’s Market Recap.

Aussie shares edged lower on Thursday, with the S&P/ASX 200 index closing down 3.3 points at 8,323, despite an initial 0.4% gain in early trading. The Consumer Discretionary (-0.82%) sector was the worst performer, primarily driven by Wesfarmers (-1.40%), which fell following a sell rating from Jarden analysts,

The market's performance mirrored mixed results in U.S. markets, where the Dow Jones rose, the S&P 500 remained flat, and the Nasdaq declined. This came ahead of Nvidia's highly anticipated earnings report, which, despite beating expectations, saw the company's stock fall 2.5% in after-hours trading.

Consumer Staples (-0.68%) and Real Estate (-0.51%) also saw falls, with supermarket giants Woolworths (-0.86%) and Coles (-0.44%) both falling. Goodman Group (-1.07%) also lost ground in the REIT sector.

Bitcoin reached a record high of above $US97,000, driven by potential crypto policy developments in Donald Trump's team, including discussions of a dedicated White House cryptocurrency position. Market sentiment was further boosted by MicroStrategy's (+10.05%) plans to increase bitcoin purchases and the launch of bitcoin ETF options, contributing to a $US900 billion crypto market gain since Trump's election.

Company News

• GQG Partners (-19.32%) is reviewing its significant Adani Group holdings after charges were filed against founder Gautam Adani in the U.S.

• IDP Education (-4.17%) shares dropped after major investor Bennelong Funds Management disclosed selling over 6.5 million ordinary shares in the international education services provider.

• Mineral Resources (-2.51%) faced a significant shareholder revolt at its Perth AGM today, with 65.9 million votes against the remuneration report versus 21.26 million in favour. The opposition followed recommendations from major proxy advisors, including Glass Lewis and ISS Governance.

• Pinnacle Investment Management's (+3.17%) shares rose after completing a $400 million institutional placement at $20.30 per share. The funds will support investments in VSS Capital and Pacific Asset Management, along with existing affiliate initiatives.

Wall Street

U.S. stock markets showed mixed performance on Wednesday, with the Dow Jones rising 0.32%, while the S&P 500 remained flat and the Nasdaq declined 0.11%. The tech-heavy Nasdaq's retreat marked a pause from the previous session's rally, influenced by disappointing results from Target and anticipation of Nvidia's post-market earnings report.

Market sentiment was particularly impacted by escalating tensions between Russia and Ukraine following reports of Ukraine firing British Storm Shadow missiles into Russian territory. Health Care (+1.18%) and Energy (+1.00%) were the best performers of the six sectors in the S&P to finish higher.

Target's (-21.41%) stock dropped following disappointing third-quarter results, as the retailer missed earnings and revenue expectations. The company acknowledged weak discretionary spending as it lowered its full-year adjusted earnings guidance to $8.30-$8.90 per share, down from the August forecast of $9.00-$9.70 and below analysts' expectations of $9.55.

Nvidia saw its stock decline nearly 2.53% in after-hours trading despite beating analyst expectations with third-quarter earnings of 81 cents per share and revenue of $35.08 billion. The company provided strong forward guidance, projecting fourth-quarter sales of approximately $37.5 billion (+2%), above the expected $37.08 billion. However, this represents a more modest 70% year-over-year growth rate than the previous year's 265% growth rate, suggesting a potential slowdown in its explosive expansion.

S&P500 Sector Performance

Economic Data

• U.K. Annual Inflation rose to 2.3% during October 24, the highest mark in six months, above Septembers figure of 1.7%. This was slightly above market expectations of a 2.2% increase.

• The average 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) in the U.S. rose for a fourth straight week to 6.9% in the week ended November 15th 2024, the highest level since early July.

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🌎️ Around The Globe

• Indian billionaire Gautam Adani faces U.S. indictment over an alleged $265 million bribery scheme involving solar power contracts. Prosecutors claim Adani and seven others, including his nephew, paid bribes to Indian officials for contracts worth $2 billion in potential profits while concealing corruption to secure $3 billion in financing.

• Delta Air Lines will exclusively offer Shake Shack burgers to first-class passengers on flights over 900 miles from Boston, starting December 1. The airline plans to expand this offering to other U.S. markets throughout 2025.

• The Department of Justice (DOJ) plans to ask a judge to force Google to sell its Chrome browser following a federal ruling that found the company guilty of maintaining an illegal search monopoly. The request will also include measures relating to A.I. and Android operating systems.

• Meta has launched a new business AI unit, led by former Salesforce AI CEO Clara Shih, to develop AI tools for its 200 million business users. The initiative includes features like AI chatbots for WhatsApp and Messenger, aiming to boost ad growth through enhanced business support.

• Microsoft is introducing 'Interpreter in Teams,' a feature launching in early 2025 that will allow users to clone their voices and speak in nine different languages during meetings, including English, Mandarin, and Spanish, enabling real-time speech-to-speech interpretation.

• Snowflake is acquiring data pipeline management startup Datavolo, which raised $21 million since its 2023 founding. The undisclosed deal strengthens Snowflake's market position and suggests expansion into data processing capabilities, potentially for AI applications.

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*1-year, 3-year and 5-year returns are calculated as of October 31 2024.

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