Miners Sink as China Disappoints

Good Evening,

Welcome to Equity Espresso’s Market Recap.

Markets declined again on Monday, with the S&P/ASX 200 index dropping 0.57% to 8,249.5 points, marking its fifth consecutive day of losses amid disappointment over China's latest economic stimulus measures and concerning economic data.

The downturn was primarily driven by weaker commodity prices and mining stocks, with the Materials (-2.25%) sector sinking. Fortescue (-3.80%), Rio Tinto (-2.06%) and BHP Group (-1.99%) led the losses as iron ore prices held around US$104/t after a weekend dip.

The market's negative sentiment was further compounded by China's disappointing November retail sales and house price data, along with the lack of concrete stimulus measures from the Communist Party's Central Economic Work Conference.

Only the two sectors finished the day in green, with Financials (+0.17%) the best performer, followed by Consumer Staples (+0.10%). All four big banks ended the day higher, with Westpac (+0.75%) seeing the largest rise.

Bitcoin surged past US$105,000 to a new record high after President-elect Donald Trump suggested a U.S. Bitcoin strategic reserve was in the works. "Yes, I think so. That’s still on my mind." Trump said in response to a question about whether the U.S. will create a Bitcoin strategic reserve similar to its oil reserve.

ASX Company News

• Meridian Energy’s (+2.81%) November operating report was received positively. Total inflows reached 119% of the historical average, and Waitaki catchment storage was impressive at 151%. The company saw robust retail growth, with overall sales volumes up 1.8% year over year.

• The Star Entertainment (+5.13%) shares fell after Mark Mackay, CEO of The Star Gold Coast, resigned with immediate effect.

• Ventia (-9.21%) shares continue to tumble after executives were named in a case over alleged price-fixing brought by the ACCC last week.

Wall Street

U.S. markets showed mixed performance in Friday's trading session, with the Dow Jones falling 0.20%, the S&P 500 remaining essentially flat, and the Nasdaq gaining 0.12%. The Semiconductor (+3.2%) sector saw positive activity, with Marvell Technology surging 10.8% while Nvidia declined 2.2%.

Looking at the broader week, the Nasdaq achieved a significant milestone by crossing 20,000 for the first time on Wednesday, marking its fourth consecutive week of gains. Market sentiment was supported by an inflation report that aligned with expectations, leading to strong confidence (97% according to CME's FedWatch Tool) in a 25 basis-point rate cut at the Federal Reserve's December meeting, though January's outlook remains less certain.

Broadcom's (+24.43%) shares surged, pushing its market cap above $1 trillion, following strong fourth-quarter earnings and tripled A.I. revenue for the year. CEO Hock Tan revealed partnerships with three major cloud customers for custom A.I. chip development. Quarterly revenue jumped 51% to $14.05 billion, and net income rose 23% to $4.32 billion. Walgreens Boots Alliance (+6.78%) shares rose following reports that Sycamore Partners is securing bank funding for a potential buyout.

S&P500 Sector Performance

Economic Data

• China's Retail sales rose by 3% year-on-year in November 2024, slowing from a 4.8% growth in the previous month and below market expectations of a 4.6% gain.

• China’s Unemployment rate held at 5.0% in November 2024, unchanged from October, which was in line with expectations.

• China’s Industrial Production expanded by 5.4% YoY in November 2024, slightly exceeding market estimates and the last month’s growth rate of 5.3%,

• The European Central Bank (ECB) has decided to cut its key interest rates for the fourth time this year by 25 bps to 3.15% in December 2024, as expected.

• U.K. GDP contracted by 0.1% month-over-month in October, following a similar decline in September and falling short of market forecasts of a 0.1% expansion.

• U.S. Import Prices rose by 0.1% from the previous month in November of 2024, extending the unexpected 0.1% increase in October and contrasting with market expectations of a 0.2% drop.

Sponsor

200% Revenue Growth: Be Part of Their Global Expansion

• Fast-growing product expanding globally – invest now

• 200% revenue growth in five years

• Entering 41 international markets, major partnerships

Invest in Med-X Now

Quick Singles

🌎️ Around The Globe

• BuzzFeed has sold First We Feast, the creator of the popular YouTube show Hot Ones, to a Soros family-led fund for $82.5M. The company will use the proceeds to reduce its $124M debt.

• Global EV and plug-in hybrid sales hit a third consecutive record in November 2024, rising 32% to 1.83 million vehicles. China dominated with 1.27 million sales (up 50%), North America saw 17% growth to 170,000 units, and Europe experienced a slight year-over-year decline to 280,000 vehicles.

• Marriott International is acquiring Postcard Cabins, which operates over 1,200 rural cabin units across America, while also partnering with boutique hotel operator Trailborn as the company expands into outdoor-focused hospitality.

• McKinsey & Company will pay $650 million to resolve federal investigations into its role advising Purdue Pharma on OxyContin sales strategies, adding to nearly $1B in state settlements over their part in the opioid crisis.

• The FTC has filed a lawsuit against Southern Glazer's Wine and Spirits, charging the nation's largest alcohol distributor with illegal price discrimination for offering deep discounts to major retailers while charging significantly higher prices to independent businesses.

• YouTube TV announced a $10 monthly price increase, raising its base subscription from $72.99 to $82.99. The increase is effective immediately for new members and January 13 for existing customers.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

Global Health Check

ETF Prices

🔍️ ETF Watch

Want to see how one of your ETFs compares to the rest?

Please reply to this e-mail and tell us an ETF or two you want to be included in the tables below.

Australian Index

Australian Sectors

Global Indices & Sectors

Global Strategy

Property & Infrastructure

Fixed Income

Mixed Assets

Geared

*1-year, 3-year and 5-year returns are calculated as of October 31 2024.

The Last Word

How are we doing?

We always love hearing from our readers and are constantly seeking feedback.

• How are we doing with Equity Espresso?

• Is there anything you’d like to see more of or less of?

• Which aspects of the newsletter do you enjoy the most?

Hit reply and say hello - or leave us feedback in the poll below:

If you enjoyed this newsletter, forward this e-mail to a friend.

If you’re that friend, subscribe here.

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.