Miner Misery as Commodities Crumble

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Welcome to Equity Espresso’s Daily Market Recap.

The Australian sharemarket closed Monday lower after commodity prices fell over the weekend sending our Material (-1.80%) and Energy (-1.45%) sectors in the red. Iron Ore futures fell by as much as 2.0% to trade at around US$111.00/t, which sent mining heavyweights BHP Group (-2.05%), Rio Tinto (-2.42%) and Fortescue (-2.63%) lower.

Lithium miners also felt the brunt of the sell-off with IGO (-3.88%), Latin Resources (-8.57%) and Pilbara Minerals (-1.33%) seeing some of the sharpest falls.

Oil prices continue to dip lower, with Brent Crude falling by another 1.0% on Monday to US$86.10/bbl which didn’t help our Energy sector today. Woodside Energy (-1.78%) and Santos (-2.13%) led the sector lower.

Consumer Discretionary (+0.33%) and Technology (+0.29%) stocks were the only shining light on an otherwise negative day for equities. Wesfarmers (+1.26%), JB Hi-Fi (+1.17%) and NextDC (+1.97%) were some of the winners in those sectors.

Some key economic items to watch for this week includes the NAB Business Confidence survey to be released tomorrow, followed by Consumer Inflation expectations for July on Thursday.

Not all miners were in the doc house today:

• Core Lithium (+9.89%) beat its production guidance, producing 95,020dmt of spodumene concentrate, beating the revised guidance of between 90,000dmt-95,000dmt.

• Ramelius Resources (+1.83%) jumped after reporting it had produced 293,033/oz of gold during FY24, which was at the upper end of increased guidance.

• Rex Minerals (+56.36%) shareholders got a nice payday, after the Copper and Gold miner announced it has entered into a Scheme Implementation Deed with MACH Metals Australia. The Indonesian owned company intends to acquire all of Rex’s shares that it doesn’t already own for $0.47.

Wall Street

Wall Street's major indices closed higher on Friday, with the NASDAQ (+0.90%) and S&P 500 (+0.54%) both closing at record highs. Markets got a boost following weak labour market data, which boosted hopes of a rate cut in September. Meta Platforms (+5.84%) and Apple (+2.19%) were some of the best performers of the mega-cap stocks.

Labour Department data showed that U.S. job growth slowed marginally to 206,000 in June from 218,000 in May, although this was above forecasts of 190,000. The unemployment rate rose to a two-and-a-half-year high of 4.1% during June, while wage gains slowed.

Macy’s (+9.54%) shares jumped on reports from the Wall Street Journal that Arkhouse Management and Brigade Capital Management increased its buyout offer to $24.80 per share from the previous offer of $24.00.

Bitcoin’s price continues to plunge, down almost 20% in the last month, to trade around US$56,000 on Friday as the trustee for the now defunct Mt.Gox exchange said it has started making payments in Bitcoin to creditors. Marathon Digital (-3.86%), Coinbase (-0.56%) and Microstrategy (-1.56%) all finished the day lower.

S&P500 Sector Performance

Economic Data

• Australian Home Loan Values for owner-occupied homes fell by 2.0% month-on-month to $18.13 billion during May, well below market forecasts of a 2.0% rise.

• German Exports declined by 3.6% month-over-month to €131.6 billion in May-24, after climbing by 1.7% in the prior month.

• The Euro slipped to as low as $1.080/USD on Monday before recouping some losses, weighed down by a potential political deadlock in France after no party won a clear majority in the parliamentary elections.

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Quick Singles

🌎️ Around The Globe

• The European Union has raised tariffs on Chinese electric vehicles. The new tariffs on individual manufacturers range from 17.4% to 37.6%, on top of a 10% duty that was already in place for all electric cars imported from China.

• Amazon founder and executive chair Jeff Bezos is planning to sell almost $5 billion worth of shares as the stock trades are a record high price.

• Metas Twitter clone, Threads, has reached over 175 million monthly active users, according to CEO Mark Zuckerberg.

• Chinese E.V. maker, BYD, will acquire a 20% stake in its local distributor Rever Automotive in Thailand.

• Samsung Electronics expects operating profit for the June quarter to be approximately ₩10.4 trillion, about a 1,452.2% rise from ₩670 billion a year ago. This better-than-expected performance is driven by explosive demand for the company's AI technologies.

• Carlsberg has agreed to buy British soft drinks maker Britvic for £3.3 billion and buy out U.K.pub group Marston's (MARS.L), opens new tab from its joint venture with the Danish brewery.

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