Monday's Market: New Records, Radio Revolts, and Big Battery Deals

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Welcome to Equity Espresso’s Market Recap.

The Australian sharemarket reached a new record high on Monday, with the S&P/ASX 200 Index rising 0.28% or 23.8 pts. to 8,417.60 points, pushing the index close to the 8500-point milestone.

Seven of eleven sectors advanced, led by Real Estate (+1.57%) with Mirvac (+3.56%), Scentre Group (+3.39%) and Goodman Group (+2.23%) as the best performers, while Healthcare (+1.34%) and Discretionary (+1.11%) stocks also performed well.

The Financial (-0.20%) sector lagged as the big four banks declined, with ANZ and NAB down 1% each, while Westpac and Commonwealth Bank also posted losses.

Oil prices reached two-week highs, with Brent crude at $75.30 and WTI at $71.38 per barrel, rising about 0.2% following last week's 6% gains, driven by geopolitical tensions with Russia and Iran's response to UN nuclear watchdog resolutions.

Company News

• Air New Zealand (+3.16%) says it expects first-half FY2025 earnings before tax of $120-160 million despite challenges from engine maintenance delays affecting fleet availability. This includes one-off gains from travel credits, manufacturer compensation, and aircraft sales.

• IPD Group (-12.44%) provided a trading update, saying it expects first-half FY2025 EBITDA to be between $22.5-23.1 million and EBIT of $19.2-19.8 million. The lift is driven by strong order growth of 39% and a backlog reaching $93.1 million, up 50% from the previous year.

• SG Fleet Group (+18.54%) has received a non-binding $3.50 per share takeover proposal from Pacific Equity Partners, with the board granting exclusive due diligence rights until November 29, 2024, to enable a binding offer.

• Southern Cross Media (-1.84%), the owner of Triple M and Hit radio networks, received a first strike at its AGM with 28.1% of proxy votes opposing its remuneration report, reflecting shareholder dissatisfaction with company performance.

• NOVONIX (+30.41%) has signed a binding agreement to supply PowerCo SE with a minimum of 32,000 tonnes of high-performance synthetic graphite material over five years, starting in 2027.

Wall Street

Wall Street ended Friday positively, with all three major indexes recording weekly gains amid encouraging signs of robust U.S. economic activity. On Friday, the Dow Jones rose 0.97%, the S&P 500 increased 0.35%, and the Nasdaq gained 0.16%. Industrial (+1.36%) stocks led the S&P sectors, while Communication Services (-0.69%) saw the largest decline.

The major indexes performed strongly for the week, with the Dow climbing 1.96%, the S&P 500 gaining 1.68%, and the Nasdaq rising 1.73%. The small-cap Russell 2000 index notably outperformed its large-cap counterparts, advancing 4.3% for the week and reaching its highest level in over a week.

Market expectations indicate a 59.6% probability of a 25 basis point cut in interest rates when the Fed next meets on December 18.

Intuit (-5.68%) shares dropped despite beating earnings expectations, as the financial software company forecasted declining consumer group revenue for Q2, though it maintained its full-year guidance targets. 

S&P500 Sector Performance

Economic Data

• Canadian Retail Sales are expected to have increased by 0.7% from the previous month in October of 2024, according to a flash estimate.

• The S&P Global US Composite PMI rose to 55.3 in November 2024, up from 54.1 in October, preliminary data showed. This reading signalled robust expansion in the country’s private sector, marking the strongest growth since April 2022.

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Quick Singles

🌎️ Around The Globe

• Inversion Space secured $44 million in Series A funding, bringing total investments to $54 million, and gained a $71 million Space Force agreement. The company develops reentry vehicles for cargo delivery from space, with backing from Spark Capital, Adjacent, and others.

• Hyundai and Kia have recalled 208,000 electric vehicles in the US over potential sudden power loss issues. This setback comes at a challenging time for the EV industry, which is facing market slowdown and potential tax credit changes.

• Starbucks confirmed it's seeking strategic partnerships in China amid reports of potential local stake sales. Under new CEO Brian Niccol, the company aims to revitalise its operations in both the U.S. and China, where beverage demand has declined.

• The Container Store announced that a $40 million investment deal with Beyond is unlikely to proceed, following Beyond's concerns about meeting deal conditions.

• The CFPB has introduced a final rule to regulate major digital payment apps processing over 50 million transactions annually, including Apple Pay and PayPal. The oversight ensures these providers follow the same regulations as traditional financial institutions.

• xAI, Elon Musk's AI startup, reportedly raised $5 billion in funding, bringing its 2024 total to $11 billion and valuing the company at $50 billion. The funds will help acquire 100,000 Nvidia chips for AI model training.

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

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