Monday's Metal Mania | CSL Gets Vaccine Spook

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Welcome to Equity Espresso’s Market Recap.

Markets continued their upward momentum, with the S&P/ASX 200 Index gaining 0.18% to reach 8300.2 points, marking its third consecutive session of gains, closing within 55 pts. of its all-time high sent in October.

Six sectors finished the day higher, led by Staples (+1.95%), Utilities (+1.82%) and Energy (+1.47%) companies. The Healthcare (-0.88%) sector faced pressure, notably affected by CSL's (-1.65%) decline to a six-month low, following news of vaccine sceptic Robert F. Kennedy Jr's appointment to lead the US Health Department by President-elect Donald Trump.

It was a newsworthy day for the Materials (+1.15%) sector:

• Uranium prices rose over 3.5% after Russia announced temporary export restrictions on enriched uranium to the United States on Friday, responding to earlier U.S. import bans. Paladin Energy (+5.49%), Silex Systems (+13.37%), Boss Energy (+7.34%) and Deep Yellow (+7.02%) all jumped on the news.

• Aluminium prices climbed after China announced it would end its aluminium export tax rebates from December 1, 2024. The decision will likely increase Chinese aluminium prices internationally and potentially reduce export volumes, which had grown 13% in early 2024. South32 (+6.20%) shares jumped today on the news.

• Iron ore prices surged above $US100/t on Monday, with Singapore futures rising 3.5% to $US100.10, driven by positive signals from China's steel sector. The uptick was supported by October data showing Chinese steel production reached 81.88 million tonnes, representing a significant increase of 6.2% from the previous month.

Company News

• Clarity Pharmaceuticals (-15.41%) shares dropped after it announced a new Phase II trial at St Vincent's Hospital Sydney comparing its 64Cu-SAR-bisPSMA diagnostic product against standard-of-care 68Ga-PSMA-11 for detecting prostate cancer recurrence. The 50-patient study will evaluate detection rates in patients with biochemical recurrence post-radical prostatectomy.

• FleetPartners Group (+4.73%) reported record New Business Writings of $924 million, up 21% from FY23, with a strong performance in Novated (+36%) and Fleet Australia (+28%). The company’s Assets Under Management of Financed (AUMOF) grew 11% to $2.3 billion, with warehouse-funded assets increasing 20%.

• Life 360 (-6.73%) shares fell after Co-founder and Chief Executive Officer Chris Hull sold around $19.5 million, or 1.2% of the total company shares. Following the sale, Mr.Hulls will hold approximately 3.8% of the company's outstanding shares.

• New Hope's (+2.34%) shares rose after reporting strong quarterly results, with underlying earnings up 41% as its average coal sales price reached $US192.4/t. The miner forecasts 5% production growth in FY25, while group sales increased 8% due to Bengalla Mine's performance.

• Resolute Mining (-5.59%) has signed a Protocol with Mali's government, agreeing to settle outstanding government claims, with Resolute paying US$80 million initially and another US$80 million due soon. The company is working to secure the release of three detained employees, including CEO Terence Holohan, while operations continue normally.

Wall Street

Wall Street took a beating on Friday, with all the major indexes deep in the red. The NASDAQ (-2.24%) saw the sharpest drop, while the S&P 500 (-1.32%) and Dow Jones (-0.70%) saw significant falls. The Technology sector was particularly hard hit, falling 2.5%, while the small-cap Russell 2000 index (-1.40%) recorded its fourth consecutive session of losses.

The market downturn was largely driven by Federal Reserve Chair Jerome Powell's comments suggesting a more cautious approach to interest rate cuts, citing strong economic growth, a robust job market, and above-target inflation. This led traders to adjust their expectations, with the probability of a December rate cut dropping to 60% from 86% a month ago and reducing expectations for easing in 2025.

For the week, the S&P 500 fell 2.08%, the Nasdaq declined 3.15%, and the Dow dropped 1.24%., marking their biggest weekly losses in over two months.

Vaccine makers' stocks tumbled after Donald Trump named vaccine sceptic Robert F. Kennedy Jr. as health secretary. Moderna (-7.34%) and Pfizer (-4.69%), while their peers also saw significant declines including BioNTech (-3.71%), GSK (-3.55%), Eli Lilly (-4.93%), and Novo Nordisk (-5.36%).

S&P500 Sector Performance

Economic Data

• U.S. Retail Sales increased 0.4% month-over-month in October 2024, following an upwardly revised 0.8% gain in September and above market forecasts of 0.3%.

• U.S. Industrial production fell by 0.3% in October 2024, matching forecasts, after an upwardly revised 0.5% drop in September.

• U.S. Export Prices rose by 0.8% in October 2024, the largest increase since August 2023, surprising markets that expected a 0.1% decline

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🌎️ Around The Globe

• ByteDance, TikTok's parent company, has valued itself at approximately $300 billion in a recent share buyback offer at $180 per share, despite ongoing concerns about potential TikTok bans in the United States.

• NASA and Microsoft have collaborated to create 'Earth Copilot', an AI chatbot powered by Azure cloud computing. The tool aims to make NASA's satellite data and planetary information more accessible and understandable for the general public.

• Netflix experienced a six-hour outage in the US on Friday night, with over 90,000 users reporting issues during Jake Paul's boxing match against Mike Tyson. Service was restored by Saturday morning, with reports dropping below 100.

• Nvidia's new Blackwell AI chips face challenges as servers housing up to 72 chips have reportedly overheated. The issue has reportedly sparked concerns among customers about data centre readiness.

• Austrian energy firm OMV confirmed Russian gas deliveries ceased Saturday morning. While incoming gas flows to Austria dropped by 12-15%, the regulator E-Control reported that customer supplies remain stable despite the disruption.

• Turkey's data protection authority fined Twitch 2 million lira ($58,000) following a 125 GB data breach. The investigation revealed inadequate security measures and insufficient risk assessments by the Amazon-owned gaming platform.

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

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