Good Evening,

Welcome to Equity Espresso’s Daily Market Recap.

It was a positive start to the week for the Australian share market, extending gains from Friday. The ASX200 index added 59.3 pts, gaining 0.77% to finish at 7,761.0. This followed a positive session on Wall Street on Friday when the Dow Jones recorded its highest one-day gain since November last year.

The Financials (+1.54%) sector was the big mover, led by pack leader Commonwealth Bank (+1.46%). Westpac (+2.50%) and QBE Insurance (+2.58%) also saw significant gains. The Utilities (+1.47%) and Real Estate (+1.42%) sectors also saw major moves.

Only the two sectors finished in the red, with Technology (-0.72%) seeing a significant fall, while Wisetech Global (-1.31%) sent the sector lower.

In company news:

• Lovisa (-10.35%) slumped on news it has head-hunted Smiggle Managing Director John Cheston, appointing him as Chief Executive from June 2025, replacing current CEO Victor Herrera, who will leave the company at the end of May 2025. Premier Investments (-4.09%) owns Smiggle, whose shares also fell on the news.

• WA1 Resources (-14.25%) had an up-down day, starting the session higher before ending in the red after announcing further high-grade niobium intercepts from ongoing drilling at its 100% owned Luni carbonatite deposit in Western Australia.

• Vulcan Energy Resources (+7.17%) got a kick-up after announcing it had received €77.5 million in ‘strategic investments’ from CIMIC Group, Hancock Prospecting and Victor Smorgon Group.

• Galileo Mining (+12.25%) announced it is selling 30% of its lithium stake in its Norseman project for $7.5 million as part of a Joint Venture in Mineral Resources.

Wall Street

The Dow Jones (+1.51%) recorded its highest one-day gain since November last year in some end-of-the-month repositioning. All three major indices registered positive gains for May. The S&P 500 (+0.8%) was another big mover on Friday, while the NASDAQ (-0.01%) lost ground.

Volume on U.S. exchanges totalled 14.60 billion shares, compared with the 12.56 billion average for the entire session over the last 20 trading days.

It was almost a clean sweep on the sector boards, with Energy (+2.5%) and Real Estate (+1.86%) as two of the big movers, while Technology (-0.01%) was marginally in the red.

The U.S. personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred gauge to measure inflation, increased by 0.3% during April. PCE was slightly below expectations of a 0.3% rise aso below March’s rise of 0.3%.

Zscaler (+8.50%) shares rose after reporting Q3 earnings and revenue that beat expectations. Zscaler reported adjusted earnings of 88 cents per share on revenue of $553 million. Analysts expected earnings of 66 cents on $535 million in revenue. Clothing retailer Gap (+28.60%) soared after smashing estimates, reporting Q1 earnings of 41 cents per share, which beat estimates of 14 cents per share. Revenue was $3.39 billion, well ahead of forecasts of $3.29 billion. Trump Media & Technology Group (-5.30%) stock slumped after former president Donald Trump was found guilty on 34 felony counts.

S&P500 Sector Performance

Economic Data

• US Core PCE Prices rose by 0.2% during April from March, after a 0.3% increase in March, the slowest increase so far in 2024.

• South Korean Exports grew by 11.7% from a year earlier to a 22-month high of US$58.15 billion in May 2024, below market forecasts of a 14.2% gain.

• China’s Manufacturing PMI rose to 51.7 in May from 51.4 in April, surpassing estimates of 51.5, marking the seventh straight month of expansion in factory activity.

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🌎️ Around The Globe

• Amazon has received federal approval to fly its delivery drones longer distances without being within a pilot’s view.

• Moderna has received approval from the U.S. FDA for its vaccine against respiratory syncytial virus (RSV) in adults 60 and older.

• Open AI is reportedly relaunching its robotics team after scrapping the division in 2020. Instead of creating its hardware, the company aims to develop models for other companies’ robots.

• Palantir has been awarded a $480 million contract from the U.S. Department of Defense for the Maven Smart System prototype, which is expected to be completed by May 2029. Maven is designed to gather data from different sources to identify military points of interest.

• Red Bull has bought a minority stake in Leeds United FC and will become their principal shirt sponsor next season.

• Saudi Arabia is selling a 0.64% stake in oil giant Aramco. The country is offering 1.545 billion Aramco shares, and the offering period will commence on June 2.

• TikTok is working on a clone of its recommendation algorithm for US users, which may result in a version that operates independently of its Chinese parent.

• WeWork's Chapter 11 bankruptcy plan was approved by a U.S. judge, allowing the company to eliminate $4 billion in debt and hand its equity over to real estate technology company Yardi Systems.

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*1-year, 3-year and 5-year returns are calculated as of the end of April 2024.

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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.