Goodmans Block Blues | GDP Slows

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Welcome to Equity Espresso’s Market Recap.

The Aussie market retreated from its record highs on Wednesday, with the ASX 200 index falling 0.4% or 32.6 pts. to 8,462.60. The decline came just a day after the market hit an all-time high, mirroring the strong performance of the S&P 500, which achieved 55 record highs this year.

The Real Estate (-1.71%) sector led the market lower, with Goodman Group (-2.89%) seeing the steepest fall following a significant $1.9 billion block trade repricing. There was some resilience in the market, with Materials (+0.63%) and Technology (+0.44%) managing to post gains.

Australia's GDP grew by 0.3% in the third quarter, falling short of the expected 0.4% and showing annual growth of just 0.8% against a forecasted 1.1%. The Australian dollar dropped to a four-month low following the data release. This slower growth reflects the Reserve Bank of Australia's efforts to cool the economy while maintaining employment gains, with interest rates at 4.35%. Unlike other central banks beginning to ease rates, markets don't expect RBA cuts until late 2025, with the next policy meeting set for December 10.

Company News

• Bravura Solutions (+20.85%) raised its financial year 2025 guidance, increasing expected revenue to $240-245m, EBITDA to $41-44m, and cash EBITDA to $33-36m. Following improved performance, the company will resume dividend payments in March 2025 and pay a capital return of at least $0.163 per share in January 2025.

• Commonwealth Bank (-0.54%) has suspended its controversial plan to charge "Complete Access" account holders a $3 fee for withdrawing cash at branches and post offices. The plan was to be implemented by switching customers to "Smart Access" accounts.

• Goodman Group (-2.89%) fell after it was revealed that China Investment Corporation (CIC) was trying to sell a large chunk of shares worth $1.9 billion yesterday. CIC owned around 7.89% of Goodman Group before the trade on Tuesday.

• Pro Medicus (+1.76%) shares rose despite founders Sam Hupert and Anthony Hall selling 1 million shares after the market close yesterday for $256.73 per share.

• Rio Tinto (+0.87%) has partnered with Sumitomo Metal Mining to develop the Winu copper-gold project in Western Australia. SMM will pay $614 million for a 30% stake, supporting Rio's diversification into copper while retaining operational control of the project.

• SG Fleet (+2.70%) shares increased after Pacific Equity Partners finalised its agreement to buy the vehicle leasing firm in a $1.4 billion deal.

Wall Street

Major U.S. stock indexes showed mixed performance on Tuesday, with the S&P 500 (+0.05%) and Nasdaq (+0.40%) reaching record closing highs while the Dow Jones (-0.17%) declined slightly. The Communication Services (+1.12%) and Technology (+0.56%) sectors were again the best performers on the day, while Utilities (-0.88%) and Financials (-0.75%) were the biggest drags.

Thursday's employment data will be crucial, as markets expect a 72% chance of a 25-point Fed rate cut when it meets later this month.

U.S. Steel (-8.01%) stock sunk after Donald Trump opposed its planned acquisition by the Japanese company Nippon Steel. The deal has faced resistance since being announced in 2023.

Salesforce (+10.52%) shares surged in after-hours trading following its third-quarter results, with revenue climbing 8% to $9.44 billion, surpassing analyst estimates. While earnings of $2.41 per share slightly missed expectations, net income grew 25% to $1.5 billion. The company projects fourth-quarter revenue between $9.90-$10.10 billion, with earnings expected at $2.57-$2.62 per share.

S&P500 Sector Performance

Economic Data

• Australia’s GDP grew by 0.3% QoQ in Q3 2024, following a 0.2% increase in the prior three quarters. This marked the 12th straight period of quarterly growth but fell short of market expectations of 0.4%.

• China General Services PMI declined to 51.5 in November 2024 from October's three-month high of 52.0, missing market forecasts of 52.5.

• U.S. Job openings increased by 372,000 to 7.744 million in October 2024 from a downwardly revised 7.372 million in September and above market expectations of 7.48 million.

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🌎️ Around The Globe

• Amazon Web Services partnered with A.I. startup Orbital Materials at re:Invent. The partnership aims to develop AI-designed solutions for carbon removal and data centre efficiency while making Orbital's technology available to AWS customers for sustainable innovation.

• Apple is facing a lawsuit from an employee who alleges the company illegally monitors workers' personal devices and iCloud accounts through mandatory software installation while restricting workplace discussions about pay and conditions.

• Jaguar has revealed its Type 00 concept car at Miami Art Week. It previews the brand's 2026 electric grand tourer with a dramatic fastback design, architectural interior features, and distinctive styling following its recent rebranding.

• Jeff Bezos and Samsung led a $700 million investment in A.I. chip startup Tenstorrent, valuing it at $2.6 billion. The Jim Keller-founded company aims to challenge Nvidia's A.I. hardware dominance.

• Tesla's $56 billion CEO compensation package for Elon Musk was struck down by a Delaware judge, upholding her previous ruling that the record-breaking 2018 pay deal was improperly granted, prompting plans for appeal.

• Volkswagen faces its largest worker strike in Germany since 2018, as IG Metall union members protest planned European manufacturing cuts amid challenges from Chinese competition and declining global EV demand.

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