Markets Hit Record High | China Makes Nice With Our Beef

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Welcome to Equity Espresso’s Market Recap.

The Australian share market reached new heights, with the S&P/ASX 200 Index gaining 0.6%, closing at 8,495.2 points and marking its fourth record close in just over a week, pushing the year-to-date gains to 11%. Nine of the eleven major sectors finished higher, led by Healthcare (+1.15%) stocks, with CSL (+1.42%) edging higher. Pro Medicus (+3.18%) moved up to #2 in the sector, closing at $256.73 with a market cap of $26.83 billion.

Consumer Discretionary (+1.05%) stocks had another positive day after yesterday's release of October retail sales, which showed a better-than-expected 0.6% rise. Wesfarerms (+0.90%), Aristocrat Leisure (+1.85%), and JB Hi-Fi (+1.78%) were some of the big movers.

Utilities (-0.51%) were the day’s worst performer as Origin Energy (-1.28%) and Meridian Energy (+2.95%) both dipped.

In trade news, China has lifted sanctions on the final two Australian abattoirs, ending four years of trade restrictions that affected over $20 billion in Australian exports. The decision follows recent talks between Prime Minister Albanese and President Xi Jinping at the G20 summit. Despite previous bans on ten abattoirs, beef exports to China increased from $2.1 billion in 2022 to $2.5 billion in 2023, with Australian red meat exports expected to reach record levels in 2024-25.

Company News

• Collins Foods (-4.29%) reduced its FY25 earnings forecast due to inflation pressures. The KFC and Taco Bell operator's profits halved to $24.1 million.

• Star Entertainment Group (+7.14%) gained after it said it expects to receive $100 million from a $200 million debt facility on December 9.

• Steadfast Group (+2.73%) says a review of its strata insurance operations found no evidence of misconduct or compliance issues. This follows earlier media reports about a broker directing business to a related entity despite cheaper alternatives.

• Woolworths Group (-0.36%) faces ongoing industrial action at four distribution centres. The United Workers Union has been striking since November 21 over wage negotiations. The strike has impacted sales by $50 million, with uncertain impacts on Christmas trading and inventory.

• Zip (-0.58%) co-founder Larry Diamond is departing the company to focus on philanthropy ventures.

Wall Street

Major U.S. stock indexes showed mixed performance on Monday, with the Nasdaq (+0.97%) and S&P 500 (+0.24%) reaching record closing highs while the Dow Jones (-0.29%) declined.

The market's performance was largely driven by strength in Technology (+1.03%), Communication Services (+1.45%), and Consumer Discretionary (+1.06%) sectors, while the other eight S&P 500 sectors declined. Utilities (-2.08%) was the worst performer, followed by Real Estate (-1.44%).

Super Micro Computer (+28.68%) shares surged 29% following a special committee's confirmation, which found no evidence of misconduct and the appointment of a new accounting officer. Intel (-0.50%) CEO Pat Gelsinger stepped down after nearly four years at the helm, with his resignation announced Monday following a reportedly tense board meeting regarding his response to Nvidia's dominance and concerns about his turnaround strategy.

S&P500 Sector Performance

Economic Data

• Australia's current account deficit decreased to $14.1 billion in Q3 2024 from an upwardly revised $16.4 billion shortfall in Q2.

• U.S. ISM Manufacturing PMI increased to 48.4 in November 2024 from 46.5 in October, beating forecasts of 47.5.

• U.K. Retail Sales dropped 3.4% on a like-for-like basis in November 2024, reversing four consecutive months of growth and falling short of market expectations for a 0.7% increase.

• South Korea's Annual Inflation rate increased to 1.5% in November 2024, falling short of market expectations of 1.7% but up from a 45-month low of 1.3% in October.

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Quick Singles

🌎️ Around The Globe

• Black Friday 2024 set new records, with U.S. online spending reaching $10.8 billion (up 10.2% from $9.8 billion in 2022) and global spending hitting $74.4 billion (up 5% from $70.9 billion), according to Adobe and Salesforce, respectively.

• Cargill announced plans to reduce its workforce by approximately 8,000 employees (5% of staff) following revenue declines tied to multi-year lows in crop prices. Agricultural trading companies face mounting pressure from decreased commodity prices and shrinking processing margins.

• President-elect Donald Trump has threatened to impose 100% tariffs on BRICS nations unless they maintain support for U.S. dollar dominance and avoid creating an alternative currency.

• Elon Musk filed for a preliminary injunction against OpenAI to prevent its for-profit conversion and alleged anti-competitive practices.

• SpaceX is reportedly in talks for an insider share sale that could value the company at approximately $350 billion. This would be a substantial increase from its $210 billion valuation earlier this year and the recently discussed $255 billion figure.

• The U.S. is planning new semiconductor export controls targeting approximately 140 Chinese companies, including Naura Technology Group, as part of ongoing efforts to restrict China's access to advanced AI and military-capable chip technology.

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*1-year, 3-year and 5-year returns are calculated as of October 31 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.