Monday Momentum: Zip Soars While Appen Plummets

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Welcome to Equity Espresso’s Daily Recap. 

The Aussie market continued its positive momentum, with the ASX 200 index posting a 55.4 pts. or 0.75% gain today following Wall Street’s positive lead on Friday, which saw the S&P 500 reach a record high

Nine of the 11 sectors closed higher, with Discretionary (+1.68%) stocks being the biggest positive mover, followed by Staples (+1.33%) and Financials (+1.20%). Wesfarmers (+1.65%), Aristocrat Leisure (+2.68%) and JB Hi-Fi (+1.45%)  were some of the big winners in the Discretionary sector.

In company news, Zip shares surged 16.5% after it said it would record a positive cash EBITDA result of between $29.0 million and $33.0 million in the first half of FY24. Meanwhile, Appen shares continue to freefall, losing 38% today after it announced that one of its major customers, Google, has terminated its contract and will cease all projects with Appen by March 19, 2024.

Plenty of news from miners today. Lynas Rare Earths fell 1.3% after its December quarter output more than halved following a temporary shutdown in Malaysia. Liontown Resources lost 21.3% after it said it was reviewing the planned expansion of its WA lithium project, Kathleen Valley, due to weak spodumene prices. Perseus Mining rose 2.6% as it announced plans to make an all-cash bid for African gold developer OreCorp. Cooper Energy shares fell 24.1% after the oil and gas producer increased the cost of decommissioning its Basker-Manta-Gummy operation to between $240 million and $280 million, up from estimates of between $193 million and $198 million.

Wall Street

The S&P 500 (+1.23%) hit an all-time high on Friday, closing 1.23% higher to 4,839.81, exceeding the previous highest close on January 3, with the session fueled by chipmakers on increased A.I. optimism. The S&P 500 has gained 35% since its most recent low in October 2022, continuing the bull market trend.

The Dow Jones (+1.05%) index also ended the day higher, finishing at its all-time high, while the NASDAQ (+1.70%) is still another 4.8% away from reaching its all-time high set in November 2021.

Economic Data

• U.S. Consumer Sentiment soared to 78.8 during January - its highest point since July 2021, well above 69.7 in December and the forecast of 70.

• U.S. Existing Home Sales fell by 1.0% month-on-month to 3.78 million units during December-23, the lowest level since August 2010 and below market estimates of 3.82 million units.

• U.K. Retail Sales fell by 3.2% in December-23 after a 1.4% rise in November, exceeding market estimates of a 0.5% drop.

• Canada’s Retail Sales grew by 0.8% month-on-month during December, the sharpest rise in 11 months.

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Quick Singles

🪃 Local News

• On Monday, Australian Prime Minister Anthony Albanese said that his government were looking at ways to “put extra dollars” in the pockets of low-to-middle-income earners, fuelling expectations of some form of relief package.

🌎️ Around The Globe

• Reddit is finally going public in March after trying for three years. If successful, Reddit will be the first social media platform to go public since 2019. The company is expected to file for its IPO in February and complete the process by the end of March.

• Macy's will cut 2,350 jobs, or about 3.5% of the workforce, amid slowing sales. Will close five of its namesake mall locations as the legacy department store moves to trim costs and turn around slowing sales.

• Huawei has set up a separate smart car unit as it continues its attempts to enter the automotive industry. Last year, it also rolled out two new vehicles, including its first electric sedan, the Luxeed S7.

• Microsoft is reportedly considering making some Xbox-exclusive games available on rival consoles, like PlayStation and Nintendo Switch. Sea of Thieves and Hi-Fi Rush have both reportedly been under cross-platform consideration.

• Instagram has announced a new feature for teens called “nighttime nudge”, which will gently suggest users limit the time on the app when they’ve spent more than 10 minutes on the app.

• Uniqlo is suing its rival Shein over a small shoulder bag, which the retailer says is an unlawful copy of its “Mary Poppins” bag.

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A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of January 16

👨‍💼 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.