Good Evening,

Welcome to Equity Espresso’s Daily Recap. 

It was almost a clean sweep on the boards today, with all 11 sectors finishing the day higher, with the ASX 200 index ending the session 41.3pts. or 0.53% higher to close at a two-week high of 7,811.90.

The Real Estate (+1.76%) sector continued its upward rise as the interest-rate-sensitive sector continues to benefit with investors pricing in several interest rate cuts during 2024. Goodman Group (+3.93%) continues to lead the pack, while Mirvac Group (+2.24%) and GPT Group (+1.56%) were a couple of the other big gainers. The sector is up 9.80% during March, second only to the Technology (+10.86%) sector.

Energy (+1.13%) stocks closed higher on Monday as oil prices increased. Crude Oil is trading above US$81.00, reversing a recent decline on signs of a tightening market. Woodside Energy (+1.18%), Santos (+1.07%) and Yancoal Australia (+2.48%) were some of the best performers. Healthcare (+1.01%) was the other big mover, thanks to a jump in CSL (+0.98%) and Cochlear’s (+1.68%) share price, while the Discretionary (-0.01%) sector saw the slimmest of all drops.

Today was a busy day for takeover offers. Oil and gas contractor Mma Offshore received an offer from Cyan Renewables to buy the company at $2.60 per share, an 11% premium to its last closing price. MMA Offshore shares rose 10.6% to $2.60 on the back of the announcement. The board of McGrath Holding Company has recommended that shareholders approve a takeover offer from Knight Frank and Bayleys of $0.60 per McGrath share. The company’s share price is 24.4% to close at $0.585 on the back of the announcement.

ALS (-4.8%) shares fell after announcing plans to take full control of European drug research business Nuvisan. “Following a strategic review of Nuvisan, ALS has determined that taking full control and ownership of Nuvisan provides the best opportunity to deliver earnings growth and maximum shareholder value optionality,” the company said.

Wall Street

It was a mixed session on Wall Street Friday, with the S&P 500 (-0.14%) falling but still registering the biggest weekly percentage gain so far in 2024. The NASDAQ (+0.16%) rose, dragged higher by the Semiconductor Index (+0.21%), up 1.53% for the week amid continued optimisation over artificial intelligence. Nvidia (+3.12%) stock had another bumper session to close at a new record of $942.89 after UBS analyst Timothy Arcuri raised his price target to $1,100.

The Discretionary (-0.63%) sector saw one of the larger falls on the day as Nike and Lululemon reported earnings that illuminated a weaker-than-expected outlook. Nike (-6.90%) stock slumped after it provided a soft outlook for the full year as it saw a slowdown in Chinese sales. Despite beating analysts' expectations during the previous quarter, sales from China were $2.08 billion, just below the $2.09 billion analysts had expected, with growth slowing to 5%. The company expects revenue to grow by 1% for fiscal year 2024.

Nike’s 2024 third quarter result:

• Revenue: $12.43 billion vs. $12.28 billion estimated

• EPS: 77 cents vs. 74 cents estimated

Lululemon (-15.8%) stock plummeted after providing weaker-than-expected guidance as demand slows in North America. For the full year, it expects sales to be between $10.7 billion and $10.8 billion, compared with estimates of $10.9 billion. The stock price drop came despite beating earnings and revenue expectations for its fiscal fourth quarter:

• Revenue: $3.21 billion vs. $3.19 billion estimated

• EPS: $5.29 vs. $5.00 estimated

S&P500 Sector Performance

Economic Data

• Germany’s Business Climate indicator surged to 87.8 during March, up from February’s figure of 85.7, beating expectations of 86.0. Sentiment reached its highest point since June 2023.

• U.K. Retail Sales were unchanged during February after rising by 3.6% Month over Month in January, beating market forecasts of a 0.3% decline.

• Canadian Retail Sales edged 0.1% higher in February after declining by 0.3% during January.

• The Bank of Russia maintained its benchmark interest rate at 16% during its March meeting, as expected, marking the fourth consecutive month at this level.

• The Swiss National Bank reduced its key policy rate by 25 bps to 1.5% in March, marking the first cut in nine years in a surprising move, making it the first major central bank to ease monetary policy.

• Turkey Central Bank unexpectedly raised its benchmark interest rate by 500 bps to 50% during its March meeting to try to curb annual inflation of 67%.

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Quick Singles

🌎️ Around The Globe

• The U.S. Environmental Protection Agency (EPA) has released strict new emissions limits for cars built from 2027 through 2032. The EPA says these limits will cut carbon dioxide emissions from passenger cars by nearly 50% in model year 2032.

• Two shoppers have filed a lawsuit against the luxury brand Hermès. The lawsuit alleges that requiring customers to purchase other items in the store before being allowed to buy a Birkin bag constitutes a violation of antitrust law.

• DoorDash is rolling out a drone delivery service in partnership with Alphabets Wing drone delivery company. The pilot will commence at selected Wendy’s stores in Christiansburg, Virginia.

• U.S. Medicare can start covering certain weight loss drugs for the first time, provided they are approved for an added health benefit such as Novo Nordisk’s Wegovy, which is approved under heart health.

• LVMH’s second in charge, Antonio Belloni, is stepping down from his role as Group Managing director after joining the company in 2001.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

Global Health Check

A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of March 15

📂 Broker Ratings

1. Sims (SGM) - Upgrade to Buy from Neutral (UBS)

👨‍💼 Director Transactions

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

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