Good Evening,

Welcome to Equity Espresso's Daily Recap. Markets continue to rebound from a torrid October despite the likely cup-day interest rate hike. Meanwhile, Origin’s takeover takes another twist today as AussieSuper plays hardball. Lets jump in.

The Recap

It felt like doom and gloom last week, but suddenly, it has been three consecutive days of gains on the ASX200, finishing the session 0.90% higher to close at 6,899.70. Overnight, Wall Street also rose as the U.S. Federal Reserve held rates steady in what was perceived to be a more moderate tone from chairman Jerome Powell, which sparked hope that the Federal Reserve is done with its rate hikes.

Interest rate-sensitive sectors Tech (+3.2%) and Real Estate (+2.3%) were the biggest movers of the nine ASX sectors that finished in the green today.

The Utilities (-3.83%) sector fell the most after Origin Energy shares sunk 6.6% as its takeover looks to be on thin ice. Brookfield and EIG increased their takeover offer for Origin Energy to $9.53 after AustralianSuper said it would not support the previous offer. The improved offer wasn’t enough for the super fund, which plans to vote against the new and improved price. AustralianSuper owns a 13.67% stake in Origin Energy.

Commodity prices rose today, with Gold trading at around US$1,993, whilst Iron Ore futures remain elevated, trading at US$123.50.

Economic Data

• New Australian Home Loans for owner-occupied homes fell by 0.1% in September from August, falling short of estimates of a 1.2% rise. The drop was due to a 0.9% decrease in the construction of dwellings.

• Australia’s Goods Trade Surplus fell to a two-and-a-half-year low of $6.79 billion in September from $10.6 billion in August as exports fell by 1.4% while imports increased by 7.5% from industrial transport equipment.

• U.S. Interest Rates remained unchanged at a 22-year high of 5.50% for the second consecutive month, with policymakers reiterating an inflation target of 2%

• U.S. Manufacturing PMI fell to 46.7 in October after reaching 10-month highs of 49 during September. October PMI fell short of expectations of 49. The lower-than-expected read marks 11 consecutive months of contraction (sub-50)

• U.S. Job Openings rose by 56,000 in September to 9.55 million, hitting its highest level in four months and beating the market consensus of 9.25 million.

Wall Street

Wall Street’s mini-rebound continues, recording another day of gains led by the NASDAQ (+1.64%), while the S&P 500 (+1.05%) also finished the day higher. In a surprise to no one, the U.S. Fed Reserve kept interest rates unchanged, with comments from Jerome Powell fuelling optimism that the rate hikes are nearing their conclusion.

Qualcomm (QCOM) surpassed analysts’ expectations in its Q4 result, reporting adjusted earnings of $2.02 - beating consensus estimates of $1.91 per share. Revenue for the period was $8.67 billion, exceeding expectations of $8.51 billion.

Mondelez International (MDLZ) stock rose 3% higher after beating expectations in its Q3 report and full-year guidance. The food company reported adjusted earnings of 82 cents per share on $9.03 billion in revenue. Analysts estimated 79 cents in earnings per share and revenue of $8.83 billion.

Airbnb (ABNB) stock fell after it guided for a weaker-than-expected revenue outlook in Q4. Shares dropped by 3% in after-hours trading after the company reported revenue of $3.40 billion, which beat estimates of $3.37 billion. Revenue guidance for Q4 was between $2.13 billion and $2.17 billion in Q4, less than the $2.18 billion analysts expected.

Paypal (PYPL) rose by over 4% in after-hours trading after beating earnings expectations with an EPS of $1.30, above estimates of $1.23, in the company’s Q3 report. Revenue reached $7.42 billion, slightly above consensus estimates of $7.38 billion. Paypal guided for Q4 EPS of $1.36.

Outlook

Early signs are of another positive night on the market, with the S&P 500 (+0.21%) and NASDAQ futures (+0.36%) trading higher.

The biggest night of the week for earnings tonight, with Apple, Starbucks, Novo Nordisk, Shopify, Coinbase, Block, Eli Lilly and Moderna a small sample of the companies set to report.

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Quick Singles

🪃 Local News

• Treasurer Jim Chalmers has said Australia will need to do more to meet its net-zero emission targets, encouraging the need for more subsidies. The Treasurer will call for $22 billion in additional investment in low-emissions technology by 2050.

• Over 3,000 employees of Crown Casino in Melbourne are threatening to strike if their demands for better working conditions and wage increases are unmet. The United Workers Union revealed that approximately 3,600 casino workers are contemplating striking.

• According to Domain's latest Vacancy Rate Report released today, the national rental vacancy rate remained at a record low of 0.8% for the second straight month in October. Sydney and Melbourne recorded a vacancy rate of 0.9%, unchanged from the previous month.

🌏 Around The Globe

• Disney will buy the remaining 33% of streaming platform Hulu from Comcast in a deal estimated to be valued at $8.61 billion.

• Canada has banned the Chinese app WeChat on official government devices, citing cybersecurity risks.

• WeWork shares plunged 47% after reports that the company is filing for bankruptcy.

• Beer brewer Carlsberg has cut ties with its Russian business and refuses to enter a deal with the Russian government, its new CEO said on Tuesday.

• Toyota announced an additional $8B investment in the construction of a North Carolina battery plant to increase hybrid car production.

• Tesla aims to manufacture 200,000 units of the Cybertruck per year, according to Elon Musk. Previously, Tesla had stated its ability to produce more than 125,000 Cybertrucks annually.

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Markets

ASX200 Company Movers

Index & Commodity Prices

Sector

Bond Prices

ASX News

🗞️ Company Announcements

• Bowen Coking Coal (BCB) went into a trading halt today as it plans on raising $50 million in capital at $0.90 per share. Bowen also updated its Coal Reserve estimates at its Lenton deposit by 32% from ROM Coal and 18% Marketable Coal. BCB shares closed Wednesday at $0.09.

• CSR Limited (CSR) - reported half-year profits ending September of $94 million, down 15% from the pcp. Aluminum EBIT losses were $24 million during the half due to higher energy and coal-pass-through costs, while raw material expenses remain elevated.

• Charter Hall Retail REIT (CQR) property values lifted by 4.1% or $21.3 million as of the end of October based on external valuation estimates. CQR reaffirmed FY24 operating earnings to be approximately 27.4 cents per unit.

• Charter Hall Long Wale REIT (CLW) property valuation rose by 4.1% or $22.4 million in the company’s Australian portfolio, along with a 2.2% or $14.0 increase in its LWIP pub portfolio.

• Janus Henderson (JHG) has submitted a request to delist its CDI holdings from the Australian Stock Exchange (ASX) due to an ongoing decline in ownership and lower volumes traded. Trading of the CDIs will be suspended from December 4. ASX shareholders will be able to convert their interest to NYSE shares in Janus Henderson or sell their interest via the NYSE shares from December 13 to February 12

• GQG Partners (GQG) have held their ground on a $11.00 per share bid for Pacific Current, despite Pacific’s major shareholder, River Capital, not in support of the deal.

• Perpetual (PPT) has promoted Craig Squires to the role of COO, who will take on an expanded role overseeing the integration program of Pendal Group.

• Sayona Mining (SYA) said it has unearthed new lithium hits at its Canadian operations, which can potentially upgrade the known Resource at the site.

• The Federal Court has stopped Santos (STO) from commencing work on its 292km pipeline to its $5.8 billion Barossa gas project in the Timor Sea.

Social Media

 📱 Post of The Day

Deep Dive

📈 Best Performing Stocks - October

We take a look at five companies that had bumper months during October

1. Dacian Gold (DCN) +154.5%. Genesis Minerals (GMD) announced during the month that it would acquire the remaining 20% stake of Dacian in an off-market takeover valuing Dacian at $0.27 per share. Dacian shores rose from $0.125 to $0.28 after the announcement.

2. Wildcat Resources (WC8) +57.8%. It was a bumper month for Wildcat after it announced broad, high-grade lithium intersections at its Tabba Tabba Lithium project. The results indicate the potential of a Tier-1 lithium deposit. Wildcat shares jumped from $0.58 after the earnings report release to close the month at $0.71.

3. Strickland Metals (STK) +57.1%. It was an eventful month for the gold explorer, with two ‘please explains’ from the ASX as its share price spiked on non-news days. The company did announce it had identified a significant gold target at its Marwari project with over 700 metres of a prospective strike. Strickland’s share price moved from $0.07 to $0.11 during the month.

4. Lithium Power International (LPI) +47.2%. Another company on this list to benefit from a takeover offer, with Chilean mining company Codelco set to acquire LPI at $0.57 per share, which sent the company’s share price rising to $0.53.

5. Syrah Resources (SYR) +31.3%. Syrah saw its share price spike after China announced new export restrictions on certain graphite products. The announcement sent several graphite-related companies like Syrah higher during the month.

Technical Analysis

Chart Watch

A short-term bullish chart to keep an eye on - Nanosonics (NAN)

Notes

• On a daily time frame, a bullish divergence is forming on the RSI.

• Another divergence is forming on the On Balance Volume (OBV)

• Selling is potentially getting weaker, which could see the share price make its way back to $4.25

• Keep an eye on lower time frames to see if the buyers can step in and get above $4.00

Newsletter Reccomendation

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Analyst Report

Immuron Limited

Code: IMC | Market Cap: $16.4m  | Current Price: $0.072
Price Target: $0.25 | Sector: Biotechnology | Broker: Pitt Street Research

Immuron (ASX: IMC) is an Australian biotech company developing products to transform the standard of care for gastrointestinal disorders. IMC creates pharmaceuticals to treat gut-mediated diseases through oral immunoglobulin-based therapies. The company has two flagship products, Travelan and Protectyn.

Product Highlights

Travelan is Immuron’s flagship product, available in Australia, Canada and the United States. Travelan is an immune supplement that helps reduce the risk of traveller’s diarrhoea (TD) and minor gastrointestinal disorders. Travelan is considered a superior product as it is a proactive and reactive treatment.

Protectyn is a dietary supplement for gut health developed to help maintain a healthy digestive function and support the liver. It is currently only available in Australia.

Clinical Programs 

Immuron is exploring various research and development avenues to unlock the full potential of its technology platform and assets. The company has three clinical-stage assets:

• IMC-124E: The drug substance in Travelan. Currenlty, Travelan is marketed as a dietary supplement and cannot make any claims about the benefits against Travellers diarrhoea. Immuron plans to license Travelan with the FDA as an approved drug to prevent travellers’ diarrhoea.

• IMM-529: an oral formulation for patients suffering from recurring Clostridiodes Difficile infection currently in pre-clinical trials.

• CampETEC: an oral therapeutic targeting Campylobacter and Enterotoxigenic Escherichia coli (ETEC) infections.

Valuation

The broker values Immuron at $0.25 per share under its base case projections with an optimistic price target of $0.35 as a bull case. The broker sees key catalysts being the advancement of the clinical-stage assets, with the end goal of bringing these assets to market.

You can download a copy of the full report here.

Daily Quiz

❓️ Test Your Knowledge

Yesterday’s Daily Quiz Question. Which of these companies had the largest share price movement during October?

Answer: Dacian Gold's (DCN) share price increased by 154% during October after Genesis Minerals bought out its remaining stake in the company.

A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of October 27

📊 Broker Ratings

What do the brokers have to say?

1. Amcor (AMC) - Upgrade to Add from Hold (Morgans)

2. Infomedia (IFM) - Upgrade to Buy from Hold (Bell Potter)

3. LiveHire (LVH) - Speculative Buy (Morgans)

4. SiteMinder (SDR) - Upgrade to Overweight from Equal-weight (Morgan Stanley)

👨‍💼 Director Transactions

What are the insiders doing? (On-market trade only)

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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.