ASX200 Ends Week on a High: Domino’s Pizza Plummets 31%, Resmed Rises 6.4%

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Welcome to Equity Espresso’s Daily Recap. 

It was a positive session for the Australian market, ending the week on a high before the Australia Day long weekend as the ASX 200 index notched up its fifth straight positive session, closing 36.2 pts. or 0.5% higher to 7,549.40. It was a mixed session on the sector boards, with Materials (+1.39%), Energy (+0.88%) and Health Care (+0.78%) stocks all closing higher, with Technology (-0.40%) and Real Estate (-0.40%).

Iron Ore futures rose again on Thursday to trade at US$136.00, helping the Australian miners. BHP Group (+1.45%), Fortescue (+2.04%), and Rio Tinto (+2.80%) all closed higher. Fortescue reported its quarterly production figures today, where it maintained its FY24 guidance.

Domino’s Pizza was the biggest story today, as its share price fell by 31% today to a five-year low of $39.51 after it said that its Net Profit Before Tax during the first half of FY24 will be between $87 million - $90 million, down from $104.8 million in the same half last year. Declining sales in Asia were the biggest driver of the slump, which dropped by 8.9%. Resmed continues its slow climb upward, rising by 6.4% after it maintained its quarterly dividend and reported a 12% increase in revenue to $1.2 billion. Incitec Pivot was another to rise as it told shareholders to expect $500 million returned to them by way of a special dividend and an equity reduction.

A mixed bag for Lithium producers, Mineral Resources rose 7.7% as it maintained its volume and cost guidance for FY23, with its two key mines still profitable despite the fall in Lithium prices. Sayona Mining dropped 9.1% to $0.04 as it cut 14% of its staff in North America as it looks to cut costs.

Wall Street

The S&P 500 climbed for the fourth straight day on Wednesday, notching up another all-time high close, rising 0.08% to 4,868.5 as Netflix shares rocketed 10.7% to a two-year high after reporting bumper subscriber numbers for the December quarter. Microsoft hit an all-time high stock price as it lifted above a $3 trillion market cap for the first time as it continues its tussle with Apple as the world’s most valuable company.

ASML, a producer of semiconductor equipment, rose by 8.8% today after it reported a quarterly sales jump of more than 12% year-on-year, which surpassed Wall Street estimates. Tesla shares fell by nearly 6% in after-hours trading after it warned of a slowdown of vehicle sales in 2024. In an earnings call on Wednesday, the company said it expects to start production of its new, next-generation vehicle during the latter half of 2025.

Economic Data

• The S&P Global US Composite PMI surged to 52.3 in January, marking a notable increase from the 50.9 in December.

• The Bank of Canada held the target for its overnight rate at 5% for the fourth consecutive decision in January 2024 - which was in line with expectations.

• According to preliminary estimates, South Korea’s GDP rose by 0.6% QoQ during December, the same as in the third and second quarters.

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Quick Singles

🪃 Local News

• Virgin Australia has won support from Australia’s International Air Services Commission over QANTAS to run extra flights between Australia and Bali.

🌎️ Around The Globe

• Johnson & Johnson has agreed to pay $700 million to settle a probe regarding claims that it misled patients about the safety of its talc baby powder and other talc-based products.

• Frances privacy watchdog has fined Amazon’s French warehouse business €32 million for using an “excessively intrusive system” to monitor worker performance and activity.

• Apple has delayed the launch of its self-driving car by another two years to 2028.

• Netflix will reportedly pay US$5 billion to be the official home of WWE’s “Monday Night Raw” for the next ten years, with the deal to start in January 2025.

• Vroom has announced that it will close its online used car marketplace and instead focus its resources and capital on auto financing and AI-powered analytics.

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A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of January 19

👨‍💼 Director Transactions

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

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.