Good Evening,

Welcome to Equity Espresso’s Daily Recap. 

The Australian market followed Wall Street's positive lead overnight despite a higher-than-expected inflation reading in the U.S., which did nothing to deter the positive sentiment of global markets. The ASX 200 index closed 16.9 pts. or 0.22% higher to 7,729.40. This leaves the index around 1.5% short of last Friday’s record high close of 7,847.00.

Seven sectors finished the day higher; Discretionary (+1.30%) stocks continued their stellar run in 2024, leading the pack for the day with Wesfarmers (+1.53%) and Aristocrat Lesuire (+2.07%) both higher. The other significant movers were the Real Estate (+1.04%) and Financials (+0.85%) sectors.

On the other side of the ledger, Materials (-0.75%) were the worst performers of the four sectors to finish lower. Iron Ore futures dipped to US$111.00, the lowest point since August last year. BHP Group (-1.34%) and Fortescue (-1.01%) both fell, while Rio Tinto (+1.39%) bucked the trend to finish higher.

Staying with the material sector, Lithium miner Liontown Resources (+6.1%) shares rose after securing a $550 million debt funding deal to progress the development of its Kathleen Valley project. Core Lithium (-9.1%) shares fell after it reported an interim loss of $167.6 million, which included an impairment loss of $ 119.6 million. The miner also said its CEO Garth Manderson will leave the company departure of its CEO.

In other company news, Treasury Wine Estates (+1.5%) shares rose as it expects China to remove tariffs on the import of Australian wine in the near future. Appen (-10.6%) shares fell today after it confirmed it was in talks about a potential takeover from a U.S. company, which may explain yesterday's 31% lift in its share price.

And finally, the price of Bitcoin surpassed its previous record to trade above US$70,000, passing Silver to become the eighth largest asset, with a market cap of $1.417 trillion.

Wall Street

U.S. stocks ended sharply higher on Tuesday, with the S&P 500 (+1.1%) recording another record high close, while the NASDAQ (+1.5%) also gained ground. Nvidia (+7.2%) shares were a big mover, dragging the semiconductor index (+2.1%) higher, snapping a two-day losing streak.

Oracle’s (+11.75%) stock price surged after it posted fiscal third-quarter earnings that beat Wall Street’s expectations. The software reported a 12% increase in revenue within its cloud services and license support segment due to a spike in demand for A.I. servers. Southwest Airlines (-14.86%) stock plummeted after it announced it was “reevaluating all prior full year 2024 guidance, including the expectation for capital spending.” Southwest stated that its first-quarter leisure bookings were weaker than expected, forecasting its unit revenue would be flat to up no more than 2% compared to a year earlier.

Economic Data

• U.S. Annual Inflation increased to 3.2% in February, slightly above forecasts of 3.1% and January’s figure of 3.1%. Energy costs fell less than expected (-1.9% vs -4.6% in January).

• India’s Annual Inflation was 5.09% in February - only a whisker below the 5.1% figure recorded in January. Food inflation was 8.66%, slightly higher than 8.3% in January, mainly due to vegetable prices.

• South Korea’s Unemployment Rate fell to 2.6% in February, down from 3.0% a month earlier, as the economy added 300,000 jobs during the month.

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Quick Singles

🌎️ Around The Globe

• Toyota Motors has agreed to give factory workers their biggest pay increase in 25 years, with monthly pay increases of as much as 28,440 yen (US$193) and record bonus payments.

• The U.K.’s Financial Conduct Authority (FCA) will not object to requests from recognised exchanges to build a listed market segment for crypto asset-backed exchange-traded notes (ETNs). The products will only be available to professional investors and not retail.

• Reddit is targeting a $6.5 billion valuation in its upcoming IPO. The company plans to sell about 22 million shares at $31 to $34 per share. If the listing goes ahead as planned, Reddit could raise as much as $519 million.

• Airbnb is banning the use of indoor security cameras in listings globally. In an update announced Monday, the company emphasised that most Airbnb listings currently do not report having a security camera.

• TikTok is fighting against a U.S. bill that could lead to a nationwide app ban. The Company is encouraging users to call their representatives with a full-screen notification about the legislation, arguing that the ban would harm 5 million businesses that rely on the platform.

   

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A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of March 7

📂 Broker Ratings

1. Accent Group (AX1) - Upgrade to Overweight from Equal-weight (Morgan Stanley)

2. Metcash (MTS) - Upgrade to Outperform from Neutral (Macquarie)

3. Telstra Group (TLS) - Upgrade to Buy from Hold (Bell Potter)

4. Task Group (TSK) - Downgrade to Hold from Buy (Bell Potter)

5. Task Group (TSK) - Downgrade to Hold from Buy (Ord Minnett)

6. Zip Co. (ZIP) - Upgrade to Buy from Neutral (Citi)

👨‍💼 Director Transactions

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

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 financial decisions. We strongly recommend conducting your own research before making any investment decisions.