Good Evening,

Welcome to Equity Espresso. We’re here to catch you up on the day’s important stock market news in Australia and abroad. Here’s a sample of today’s top stories:

1. 💼 Business Confidence Holds Steady

2. 💡 Origins Illuminated Path Forward

3. ⛽️ Chevron & Unions at Crossroads

4. ✈️ Virgins IPO Voyage Delayed

5. 🤖 Alexa’s Fake News

The Recap

ASX Regains 7000 Mark
Following Easing Rate Signals

The ASX200 index finished over the 7,000 mark, making it three straight sessions in the green and the biggest one-day increase since September 15, ending 70.4 points higher to 7,040.6. This followed a positive night on Wall Street after commentary from the Fed Reserve indicating that rates may not need to be raised due to the recent spike in bond prices.

All sectors closed in the green, with Utilities (+4.1%) leading the way after Origin Energy rose by 5.5% as the ACCC gave Brookfield/MidOcean the green light to acquire the Aussie-based Energy provider.

Tech (+3.02%), Teclo (+2.24%) and Real Estate (+1.80%) were the other big sector movers on the market today.

Bond yields fell, which was another contributor to the positive market movement, with the Aussie 10-year trading at 4.47%.

Outlook

Futures markets are trading flat in the U.S. so far, with the S&P 500 (-0.01%) down by the slimmest of margins while the NASDAQ (+0.04%) is higher.
Some of the key events to keep an eye on this week includes:

• Pepsi Co. Qtr. Earnings (Tue)

• Bank of Queensland Earnings (Wed)

• Infosys. Qtr. Earnings (Thr)

• U.S. CPI Sep (Thu)

• U.S. Banks Qtr. Earnings (Fri) - Black Rock, JP Morgan, Citi Group, Wells Fargo

Economic Data

• The NAB business confidence index steadied at 1 in September 2023 for the third consecutive month. However, it remains well below average, indicating that companies are less anxious about the future than in the past.

• Mexico's annual inflation rate dropped to 4.45% in September 2023 from 4.64% in August, slightly below market expectations of 4.47%. This marks the eighth month of easing inflationary pressures, bringing the inflation rate to its lowest since February 2021.

Wall Street

Both the S&P500 (+0.63%) and NASDAQ (+0.39%) rose on Monday, with the Energy sector finishing higher as oil prices lifted following the conflict in the Middle East. Exxon Mobile (+3.5%) and Chevron (+2.77%) were the big movers in the sector. The rest of the market saw an unexpected rise after comments from Federal Reserve Vice Chairman, Philip Jefferson, and Bank of Dallas President, Lorie Logan. They suggested that the recent increase in long-term Treasury yields might reduce the need for the U.S. central bank to raise its benchmark interest rate again. Bond markets closed Monday for the Columbus Holiday as the 10-year treasury yield remained at 4.7%.

Tesla stock fell 2.3% on Monday after news that the company’s year-over-year sales declined 10.9% in China during September, according to data from the China Passenger Car Association.

Defence stocks also rallied on the back of the rising conflict in the Middle East, with Northrop Grumman (10.8%), L3Harris Technologies (+9.1%) and General Dynamics (+8.4%) all rising.

Quick Singles

🪃 Local News

• Bain Capital has postponed an IPO for Virgin Australia Airlines until 2024, according to a report by Bloomberg. The airline recently announced an after-tax profit of $129 million for FY23, which marks its first profit in 11 years. In 2020, Bain purchased Virgin Australia for $3.5 billion, including its liabilities, after the airline was placed in voluntary administration.

• Boral's CEO Vik Bansal said that higher electricity prices and a slowing energy transition are prompting them to halt manufacturing each day temporarily. “At a certain point during the day, when the price goes up to a certain level, our manufacturing stops,” Bansal told The Australian Financial Review energy and climate summit on Monday.

• Chevron has approached Australia's industrial tribunal to help resolve a few issues preventing a deal with unions at its two liquefied natural gas (LNG) facilities in Western Australia. Meanwhile, the unions have informed Reuters that they have given a seven-day notice to Chevron, and workers are planning to resume strikes next week.

🌏 Around The Globe

• Michelin Guide will now rate hotels in addition to restaurants, awarding "keys" to those that meet its criteria.

• Delta Airlines will pay $27 million to settle claims from customers who said they weren’t refunded for flights cancelled due to COVID-19.

• Despite the Bank of Israel's announcement that it is willing to sell tens of billions of dollars in foreign exchange to support the currency, the shekel continues to slump. The central bank said it would sell as much as $30 billion and extend up to $15 billion through swap mechanisms as part of an unprecedented program to support markets.

• Employees at some Walgreens stores in the U.S. will reportedly lock their gates and walk out on Monday due to challenging working conditions, which make it difficult to fill prescriptions safely.

• According to a report by Garner Inc., worldwide personal computer shipments declined by 9% in the 3rd qtr, marking a two-year low.

₿ Crypto Corner

• The world’s leading crypto options exchange, Deribit, will soon offer options trading for alternative coins Ripple, Solana and Polygon.

• Huobi’s Global’s crypto exchange has received $8 million in stolen Ether that was taken off the exchange in September.

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Markets

ASX200 Company Movers

Index & Commodity Prices

Sector

Bond Prices

ETF Watch

ASX News

🗞️ Company Announcements

Atlantic Lithium (A11) announced that Ghana’s Environmental Protection Agency has authorised it to divert transmission lines that run across planned mining areas at its flagship Ewoyaa lithium project in Ghana.

Baby Bunting (BBN) had their AGM today, where they provided an FY24 trading update. YTD sales are down 3.3% from the Pcp, whilst comparable store sales are down 8.5%. On the positive, the Gross Margin (%) is up 70bps, to 37.9%. Baby Bunting provided no further FY24 financial guidance.

Eagers Automotive (APE) announced it will acquire a group of dealerships under Nick Politi, totalling $245 million, comprised of $25 million in Eagers shares, with the remainder to be paid in cash. The group of dealerships reported an annual turnover of $1.0 billion, about 10% of Eager’s total revenue.

Kathleen Conlon, Chairwoman of Lynas Rare Earths (LYC), is set to resign at the end of November after serving the WA-based mining company for 12 years. Independent non-executive director John Humphrey will take over as the new Chairman.

NRW Holdings (NWH) announced it had been awarded circa $200 million in contracts by Landlease for infrastructure works at a residential development in Redland Bay, QLD.

The ACCC has authorised the buyout of Origin Energy (ORG) by Brookfield and MidOcean in a $18.7 billion takeover deal that values Origin at $8.91 a share. The takeover remains subject to the Foreign Investment Review Board and the National Offshore Petroleum Titles Administrator.

Weebit Nano (WBT) shares rose after confirming today that the attack on Israel has not currently impacted its Israel operations. Weebit said its lab is operating normally in a protected location, and none of its employees have been affected by the conflict.

Post of The Day

In yesterday’s recap, we briefly discussed the U.S. government's staggering interest debt repayment. This graph visualises it best!

What The?

Alexa's Ballot Bungle

Alexa, who won the 2020 U.S. Federal election?

According to the Washington Post, Amazon's voice assistant, Alexa, present in around 70 million households, has been found to have provided false information to users about the 2020 election being rigged.

Alexa has falsely claimed that Joe Biden's victory over Donald Trump was "stolen by a massive amount of election fraud" and that Trump won Pennsylvania. However, Amazon has clarified that these were isolated incidents and were quickly rectified.

Amazon declined to explain why its voice assistant draws 2020 election answers from unvetted sources.

You can read the full story here.

Daily Quiz

Test Your Knowledge

Last week’s Daily Quiz Question. Which metal commodity has risen the most in the previous 12 months?

Answer: Iron Ore. A tough one. 60% of you said Gold. Only two respondents got the one correct. Iron Ore is up 21.9% in the last 12 months, followed by Gold (+11.8%) and Copper (+4.4%). Meanwhile, Steel is down -8%

A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of October 4

📊 Broker Ratings

What do the brokers have to say?

1. 29Metals (29M) - Upgrade to Outperform from Neutral (Macquarie)

2. Cromwell Property (CMW) - Downgrade to Accumulate from Buy (Ord Minnett)

3. Core Lithium (CXO) - Upgrade to Neutral from Sell (Citi)

4. Fortescue Metals (FMG) - Upgrade to Hold from Reduce (Morgans)

5. IGO Ltd (IGO) - Upgrade to Buy from Neutral (Citi)

6. Magellan Financial (MFG) - Upgrade to Neutral from Underperform (Macquarie)

7. Magellan Financial (MFG) - Upgrade to Accumulate from Hold (Ord Minnett)

8. Pilbara Minerals (PLS) - Upgrade to Buy from Neutral (Citi)

👨‍💼 Director Transactions

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

💲Dividends

Companies trading ex-dividend today

1. Reece Ltd (REH)

2. Turners Automotive Group (TRA)

📅 Economic Calendar

Data to keep an eye on this week

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.