Good Evening,

Welcome to Equity Espresso’s Daily Market Recap.

The Australian share market started the week positively, pushing higher ahead of the Reserve Banks meeting tomorrow, where it’s expected the cash rate will remain on hold at 4.35%. Markets are pricing in a 97% chance of rates remaining on hold.

The ASX 200 index closed 53.4 pts. higher, rising by 0.70% to 7,682.40, led by gains in the Real Estate (+1.73%) and Utilities (+1.24%) sector. Goodman Group (+4.14%) was one of the best performers in the interest-rate sensitive REIT sector, closing at $33.98 - a share price it has not seen since pre-GFC. Origin Energy (+1.66%) shares continue to climb, leading the Utilities sector.

The Industrials (-0.18%) and Staples (-0.12%) sectors were the two biggest fallers, albeit marginally. Iron Ore futures traded above US$118.00 on Monday helping lift Fortescue (+2.57%), BHP Group (+0.80%) and Rio Tinto (+0.34%) higher.

Brent Crude prices rebounded after falling by more than 7% last week, its biggest one-week fall since February. Woodside (+0.18%) and Ampol (+0.82%) both rose.

In company news:

• Graincorp (-3.57%) shares fell after the company lowered profit expectations, blaming softer commodity prices, drier conditions in Western Australia, and more competition in the grain markets. The company expects FY24 underlying EBITDA to be in the range of $250 million to $280 million, down from the previously disclosed range of $270 million—$310 million.

• Qantas (+0.34%) has agreed to pay $120 million to resolve legal claims that it allegedly sold tickets for flights that had already been cancelled.

• Tourism Holdings (-36.78%) sunk after lowering profit expectations to between $50 million and $53 million, a sharp drop from the company's previous guidance of $57 million in February. Weaker vehicle sales volumes in the company’s Australian Retail Dealership division were to blame for the fall in profits.

Wall Street

U.S. stocks surged higher on Friday after a weaker-than-expected employment report boosted the case for interest rate cuts sooner rather than later. The NASDAQ (+1.99%) was the big mover thanks to a rebound in the Apple (+5.97%) share price after the iPhone maker announced a $110 billion share buyback. The S&P 500 (+1.26%) gained over 1%, as did the Dow Jones (+1.18%). Nvidia (+3.46%), Microsoft (+2.22%) and Meta Platforms (+2.23%) all saw big moves on the day.

The latest employment report from the Labor Department revealed the U.S. economy added fewer jobs than anticipated, with an increase in the unemployment rate and a drop in wage growth. The markets viewed this reading as favourable as it suggests that the labour market is weakening, which is essential for achieving sustainable inflation reduction, as Fed chair Jerome Powell noted.

Of the 11 major sectors in the S&P 500, all but Energy (-0.05%) ended the session in positive territory, with Technology (+3.01%) and Communication Services (+1.03%) seeing the largest gains.

First-quarter earnings season is approaching the final stretch, with 397 companies in the S&P 500 having reported as of Friday. According to data from LSEG, 77% have posted consensus-beating results.

Block (-1.1%) shares fell despite reporting first-quarter results that surpassed analysts’ expectations. Block reported adjusted earnings of 85 cents per share on revenue of $5.96 billion, which exceeded the earnings of 72 cents per share on revenue of $5.82 billion. Expedia (-15.25%) shares tumbled after lowering its full-year guidance due to weakness in its vacation rentals segment.

S&P500 Sector Performance

Economic Data

• U.S. Non-Farm Jobs rose by 175,000 on April 24, a fall from 315,000 in March, which fell short of expectations of a 243,000 increase.

• U.S. Unemployment increased to 3.9% in April from 3.8% in March, passing expectations of an unchanged rate.

• U.S. ISM Services PMI dropped to 49.4 in April from 51.4 earlier in the month, making it the first contraction in the services sector since December 2022.

• Euro Area’s unemployment rate held at a record low of 6.5% in March, the same as the previous three months and in line with expectations.

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Quick Singles

🌎️ Around The Globe

• Microsoft CEO Satya Nadella has told his staff to prioritise cybersecurity by announcing a series of new anti-hacking initiatives that include basing a portion of senior leaders’ compensation on meeting cybersecurity milestones.

• X is using Grok to create AI-generated summaries for news and discussions trending on its platform, offering them under the feature "Stories on X" exclusively to premium subscribers.

• Peloton’s CEO Barry McCarthy is leaving after just two years. The company also announced layoffs of around 15% of its workforce, which is expected to save $200 million.

• Universal Music Group's music catalogue is once again available on TikTok after the companies reached a new licensing agreement. The new deal includes improved remuneration for artists and addresses concerns related to AI-generated content.

• Collapsed U.S. lender SVB Financial Group is set to sell its VC business to an entity affiliated with Pinegrove Capital Partners for an undisclosed value.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

ETF Watch

Global Health Check

A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of April 30

📂 Broker Reports

1. Imdex (IMD) - Downgrade to Neutral from Buy (Citi)

👨‍💼 Director Transactions

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

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