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Welcome to Equity Espresso’s Daily Market Recap.

The Australian share market fell sharply on Friday as investors lowered hopes of a rate cut, as all sectors finished the day in the red. The ASX 200 index lost 84,2 pts. or 1.1% on the day, ending the week lower at 7,727.60. Wall Street fell sharply overnight after better-than-expected manufacturing data signalled continued strength in the world's largest economy, sending bond yields higher.

There went many places to hide on the ASX today; all 11 sectors finished the day lower, with Discretionary (-2.45%), Real Estate (-1.64%) and Staples stocks (-1.52%) seeing the largest falls.

Gold prices fell to around $2,330/oz on Friday, nearing two-week lows, and on track to record its first weekly drop in three weeks. Copper futures continue to release some steam, falling to $4.8/Lbs less than a week after hitting record highs of $5.20 on May 20.

In company news:

• Playside Studios (+6.32%) shares rose after it announced the development of a multiplayer strategy game based on the TV series Game of Thrones in a deal with Warner Brothers Interactive.

• Accent Group (+5.43%) climbed after it reported that like-for-like sales dropped by only 0.6% until the end of December. NPAT for the period was $42.2 million, down from $58.3 million in the prior period.

Wall Street

U.S. stocks ended Thursday’s session lower despite a bumper session for Nvidia, which rose by over 9%, hitting $1,000 per share. The Dow Jones (-1.53%) lost the most ground of the major indices, followed by the S&P 500 (-0.74%) and Nasdaq (-0.39%).

Only one sector finished in the green, with Technology (+0.56%), thanks to Nvidia’s stellar quarterly earnings report, which saw it beat earnings expectations and provide better-than-expected revenue guidance for the coming quarter. Real Estate (-2.16%), Utilities (-1.70%) and Consumer Discretionary (-1.52%) were the worst performers on the day.

In company news, Boeing's (-7.6%) stock dropped after the aircraft manufacturer said it expects to have negative free cash flow in 2024 as it deals with production challenges. Nvidia (+9.3%) was among the best performers in the session after issuing better-than-expected earnings guidance and announcing a 10-for-1 stock split.

S&P500 Sector Performance

Economic Data

• U.S. initial jobless claims fell by 8,000 to 215,000 during the week ending May 18, below market expectations of 220,000.

• U.S. Manufacturing PMI rose to 50.9 in May, rebounding from 50 in April. This was ahead of forecasts by the same amount.

• U.K Retail Sales fell 2.3% month-on-month during April, following a 0.2% drop in March, with the decline steeper than the 0.4% decline expected.

• Japan's Annual Inflation rate fell to 2.5% in April from a 2.7% rise in March, the country's lowest reading since January.

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🌎️ Around The Globe

• Mattel is partnering with Outright Games on three PC and console games based on its Monster High, Matchbox, and Barbie brands.

• OpenAI has agreed to a 5-year, $250 million content licensing deal with News Corp. to use the news publishers' content to improve ChatGPT.

• Humane is reportedly exploring a potential sale for between $750 million and $1 billion, just weeks after its $699 AI Pin wearable device launched to poor public reviews.

• Oaktree Capital Management said it had taken ownership of Inter Milan after a missed €395 million payment from the club's Chinese majority shareholder, Suning.

• Johnson & Johnson is facing a lawsuit from a group of cancer victims. They are accusing the company of committing fraud by repeatedly trying to use a shell company's bankruptcy to resolve thousands of lawsuits alleging that their talc products contained asbestos and caused cancer.

• The Consumer Financial Protection Bureau is proposing a new rule that would give customers of Buy Now Pay Later products the same protections as those with credit cards.

• South Korea has no plans to lift the short-selling ban prohibited in November 2023 until a system is developed to detect illegal trading activities.

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