Market Snaps Losing Streak | Oil Pains Remain

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Welcome to Equity Espresso’s Market Recap.

The Australian share market rebounded strongly on Tuesday, with the S&P/ASX 200 index gaining 0.8% or 64.5 pts. to close at 8,314 points. Today’s gain broke a five-day losing streak, which saw eight out of eleven sectors finishing higher, defying earlier predictions of continued market weakness based on futures trading.

The Industrials (+1.34%) sector led the day’s rally, with Transurban (+2.09%) and SGH (+1.60%) some of the best performers, followed by the Real Estate (+1.32%), Technology (+1.31%) and Financials (+1.16%) sectors.

The Energy (-1.09%) sector faced downward pressure as oil prices remained low, with Brent crude at $US74/bbl due to concerns over Chinese consumer demand and disappointing stimulus news from Beijing. This resulted in declines for major energy stocks, with Woodside dropping 1.01% and Santos falling 0.62%.

ASX Company News

• Data#3 (-9.84%) shares dropped after the company announced significant changes to its Microsoft partnership incentives, effective January 2025. While the revisions will reduce Data#3's earnings from Microsoft Enterprise agreements, the company maintained its profit guidance and plans to adapt by focusing on small-to-medium businesses, cloud solutions, and Copilot services.

• Novonix (+3.42%) shares jumped after the company received a conditional $755 million U.S. government loan to build a synthetic graphite plant in Tennessee. The facility will produce 31,500 tons annually for North American E.V. manufacturers.

• Karoon Energy (-9.68%) shares fell after production at its Brazilian Bauna oil field was halted due to mooring system damage. The facility, which produces 24,000 barrels daily, will remain offline until at least one of the two failed anchor chains is repaired next week.

• PEXA Group (+8.20%) shares rose after it announced the appointment of Russell Cohen as Group MD and CEO effective March 31, 2025.

Wall Street

U.S. stocks showed mixed performance on Monday, with the Nasdaq (+1.24%) leading the gains while the Dow Jones (-0.25%) declined 0.25%. The S&P 500 posted a modest increase of 0.38%, bolstered primarily by strong performance in the Discretionary sector.

Sector performance was uneven, with Consumer Discretionary (+1.74%) and Technology (+1.01%) leading the advances, while Energy (-2.19%) struggled amid falling oil prices. The cryptocurrency market saw significant activity, with Bitcoin reaching new highs.

Broadcom (+11.21%) emerged as a standout performer, continuing its strong momentum from Friday's earnings report with another substantial gain, adding over $300 billion in market capitalisation across two sessions. Meanwhile, Super Micro Computer (-8.26%) faced pressure following news of its removal from the Nasdaq 100 Index.

MicroStrategy's (-0.04%) stock fell following Nasdaq's announcement of its inclusion in the Nasdaq-100 index, based on November's market cap rankings. Despite initially surging 7%, the stock reversed course and traded slightly lower.

S&P500 Sector Performance

Economic Data

• Australia’s Consumer Sentiment index fell 2% to 92.8 points in December 2024, reversing two months of positive momentum.

• U.S. Composite PMI rose to 56.6 in December 2024 from 54.9 in November, preliminary estimates showed.

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🌎️ Around The Globe

• Amazon workers at two New York facilities voted to authorise strikes after the company allegedly refused to recognise their union. The Teamsters union set a December 15 deadline for Amazon to agree to contract negotiations, citing concerns over wages and working conditions.

• ABC News has agreed to a $15 million settlement with Donald Trump in his defamation lawsuit against the network and anchor George Stephanopoulos, with the funds to be directed toward Trump's presidential library.

• Apple is reportedly developing an 18.8-inch foldable iPad with a creaseless design targeted for 2028 release, with prototypes already created.

• Goldman Sachs has secured regulatory approval to sell funds in China through its securities brokerage unit, following China's recent commitment to welcome foreign financial firms.

• Meta has petitioned California's Attorney General to block OpenAI's conversion from non-profit to for-profit status, arguing that charitable assets shouldn't be used for private gain.

• Porsche SE, holding a 31.9% equity stake in Volkswagen, announced potential writedowns of up to €20 billion on its VW investment. The news reflects VW's ongoing struggles with high costs and strong Asian competition.

Markets

ASX Company Movers

Commodity Prices

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Forex

Global Health Check

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*1-year, 3-year and 5-year returns are calculated as of November 30 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.