Friday's Market Roundup: ASX Sees Red | Iluka Falls on Cost Blow Out

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Welcome to Equity Espresso’s Market Recap.

The Australian share market started Friday in the red and finished that way, giving back some of the gains made earlier in the week. The S&P/ASX 200 index closed 0.64% or 54.0 pts. lower to end the week at 8,420.90, with 10 of the 11 major sectors finishing lower.

Utilities (+0.39%) rose, led by Mercury NZ (+3.55%) on a BBB+/Stable credit rating confirmation and APA Group (+1.46%) after its Queensland pipeline avoided full price regulation. The sector was the day's sole gainer.

Energy (-1.21%) stocks were the worst-performing sector. WTI crude oil futures held their recent decline to around $68/bbl after OPEC+'s decision to delay restoring halted production failed to lift market sentiment amid expectations of oversupply next year. Woodside Energy (-2.12%) saw the sharpest fall in the sector, followed by Santos (-1.05%).

Company News

• Ampol (+0.63%) has priced a $600 million offering of subordinated notes due in 2054, expected to settle on December 11, 2024. The notes will be used for debt refinancing and general corporate purposes.

• APA Group (+1.40%) shares rose after the Australian Energy Regulator confirmed that APA’s South West Queensland Pipeline would not be subject to price regulation.

• Aristocrat Leisure (-2.97%) announced that Hector Fernandez, previously CEO of Aristocrat Gaming, has resigned and accepted a role with a competitor. Craig Toner has been appointed to replace Mr Fernandez, effective immediately.

• Charter Hall (-1.00%) announced a distribution of 23.42 cents per security, with a record date of December 31, 2024. The securities will trade ex-distribution on December 30, 2024.

• Iluka Resources (-10.04%) fell after its rare earth refinery project saw its capital costs surge from the initial $1.2 billion to $1.7-1.8 billion, creating a funding gap that required additional discussions with the Australian Government throughout 2024 to resolve.

Wall Street

U.S. stock markets retreated on Thursday following their record highs on Wednesday as investors turned cautious ahead of Friday's upcoming jobs report. The S&P 500 Technology index dipped 0.18% from its record close, while the major indices saw modest losses. The Dow Jones (-0.55%) dropped the most, followed by the S&P 500 (-0.19%) and Nasdaq (-0.18%).

American Eagle Outfitters (-14.23%) stock fell after it missed Q3 revenue expectations and provided cautious holiday guidance. While beating earnings estimates at 48 cents per share, the retailer said it’s facing challenges with value-conscious consumers and expects just 1% comparable sales growth. UnitedHealth Group (-5.21%) stock fell after its CEO, Brian Thompson, was killed in New York in what’s being described as a brazen targeted attack.

S&P500 Sector Performance

Economic Data

• U.S. Initial Jobless claims rose to 224,000 during the weekend of November 30, up from 213,000 in the previous week and above market expectations of 215,000.

• The U.S. Trade Deficit narrowed to $73.8 billion in October 2024 from an upwardly revised $83.8 billion gap in September, compared to forecasts of a $75 billion shortfall.

• Japan’s nominal wages rose by 2.6% year-on-year in October 2024, marking the slowest growth since May, which was in line with market expectations.

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🌎️ Around The Globe

• Amazon faces a D.C. lawsuit alleging it secretly denied its fastest Prime delivery service to two lower-income ZIP codes while charging full membership prices to 50,000 residents and then misleading customers who complained about slower deliveries.

• General Motors announced it will take over $5 billion in charges during Q4 2024, including a $2.6-2.9 billion writedown of its Chinese joint ventures and $2.7 billion in restructuring costs. While impacting net income, these non-cash charges won't affect adjusted pretax earnings.

• Mattel faces a lawsuit from a South Carolina parent after their Wicked dolls' packaging accidentally included a URL to an adult website, which the plaintiff's daughter allegedly accessed.

• OpenAI has launched a "12 Days of OpenAI" initiative, promising to release or demonstrate a new product or feature daily via live stream until Christmas. CEO Sam Altman confirmed the plan, with potential releases including a text-to-video tool called Sora and a new reasoning model.

• Seven & i Holdings plans to IPO its North American 7-Eleven business, potentially raising over $6 billion as part of a $58 billion management buyout. The offering would include 7-Eleven stores, Speedway, and Sunoco stations, while the company faces takeover interest from Alimentation Couche-Tard.

• U.K. electric vehicle sales hit a two-year high in November, capturing 25% of new car registrations. The surge, driven by discounts and reduced gas-car sales, exceeded the government's 22% E.V. sales mandate target for manufacturers this year.

• UnitedHealthcare CEO Brian Thompson was fatally shot at 6:44 a.m. outside Manhattan's Hilton Hotel by a masked gunman who fled on a Citi Bike. The attack occurred before the company's investor day, which was cancelled following the incident.

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