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. 🩸 CSL AGM Drama

2. 💊 Ozempics Kidney Surprise

3. 🔋 Liontown Extends Due Diligence

4. 📉 IMF’s Somber 2024 Vision

5. 💵 TAB’s Wagers Wobble

The Recap

ASX Flat

Healthcare Tanks

The ASX200 index squeezed out another gain today to make it six consecutive positive trading days after another positive night on Wall Street, finishing 2.6 points or 0.04% higher to 7,091.0.

Seven of the 11 sectors ended the day higher, led by Financial (+0.86%) and Materials (+0.86%).

The big news came in the Healthcare space, with the sector losing 4.5% as CSL (-5.7%) and ResMed (-5.1%) were sold off heavily. This came after reports overnight that Novo Nordisks diabetes drug Ozempic showed surprisingly early effectiveness in a kidney failure study. After the news broke, German dialysis provider Fresenius Medical Care AG & Co.’s stock fell 17.4% overnight.

CSL also had an eventful AGM yesterday, with a 23% protest vote against the company's executive pay. Chairman Brian McNamee hit back at shareholders by stating, “We remain a growth company…we cannot control the share price”. Going on further to say, “If you want to clip the ticket and be a dividend investor, I can tell you there may be better investments for you.”

In other company news, Tabcorp warned of softer trading conditions as it reported a 6.1% drop in revenue during Q1 FY24, with Gaming Services revenue down 12.7%. Tabcorp finished the day down 6.1%.

Lithium miner Liontown Resources remains in a peculiar situation. Today, Liontown announced they have granted Albermale another seven days to complete due diligence regarding a takeover. Meanwhile, Hancock Prospecting added another 33million shares in the company to take its stake to 19.90%. While all this is happening, Liontown has crept up to #5 on the list of shorted companies on the ASX at 9.64%.

Outlook

The big data point tonight is the release of the U.S. consumer price index for September, where a positive report could trigger a significant market rally.

Early futures indicate a positive session, with the S&P 500 (+0.27%) and NASDAQ (+0.28%) higher.

Economic Data

• U.S. Producer Prices (PPI) increased by more than expected in September due to higher energy and food costs. Producer prices in the U.S. rose 0.5% month-over-month in September 2023 after a 0.7% rise in August - but above market forecasts of 0.3%.

Wall Street

U.S. stocks continued their recent rebound as investors focused on the less hawkish comments from the Federal Reserve speakers last week, which has spurned market positivity. The S&P 500 (+0.43%) and NASDAQ (+0.71%) finished the session higher. Treasury 10-year yields dropped 9bps to 4.56%.

Exxon Mobil is set to buy Pioneer Natural Resources for $58 billion, becoming the largest producer in the U.S.'s largest oilfield.

Birkenstock's IPO debut was disappointing, with shares opening 11% below their price, marking the worst opening for a $1 billion or more listing in New York in over two years. Only nine out of over 300 US IPOs of that size in the past century have performed worse.

Novo Nordisk shares climbed 6% in the U.S. overnight after the company said it is stopping its kidney trials of its Ozempic drug early based on the positive outcomes it has seen so far.

Quick Singles

🪃 Local News

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• Australian journalist Cheng Lei returned home after being detained on national security charges in China for over three years.

🌏 Around The Globe

• The International Monetary Fund left its forecast for global real GDP growth unchanged at 3.0% but cut its 2024 forecast to 2.9%.

• SpaceX's Starlink will soon be available for use by any aircraft operator for $25,000 per month and equipment purchases of $150,000. Starlink offers download speeds of 40-220 Mbps.

• General Motors has reached a tentative agreement with the union representing its Canadian workers. This comes after more than 4,000 employees in Canada went on strike. Meanwhile, the US's United Auto Workers (UAW) strike is still ongoing. On Tuesday, Canadian union Unifor initiated a national strike at GM’s four Canadian facilities.

• Adobe has announced an update to the models powering its A.I. image creation service, Firefly. The updated model is expected to better render humans, including their facial features, skin, body, and hands.

• The U.S. state of Utah is suing TikTok, claiming the app hurts children’s mental health, following Arkansas and Indiana lead, which have filed similar suits.

₿ Crypto Corner

• Israeli police have frozen hamas-linked cryptocurrency accounts with the help of Binance.

• The owner of crypto exchange Bitfinex is exploring a $150 million share buyback offer to hack victims.

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Markets

ASX200 Company Movers

Index & Commodity Prices

Sector

Bond Prices

ETF Watch

ASX News

🗞️ Company Announcements

Beach Energy (BPT) - Chairman Mr Glenn Davis will retire as a director at the commencement of the 2023 Beach Annual General Meeting (AGM) on November 14.

Tabcorp (TAH) - provided a Q1 trading update today, reporting a 6.1% drop in revenue as gaming services revenue declined 12.7%.

Takeover target Liontown (LTR) has given a seven-day extension to Albemarle for its due diligence. Meanwhile, Hancock Prospecting has upped its stake in Liontown to 19.9%.

Redbubble (RBL) shares popped after reporting a positive underlying cash flow in Q1 of $0.7 million - up $16.9 million from the pcp.

United Malt Group (UMG) confirmed today that the Foreign Investment Review Board (FIRB) has no objections to United Malts takeover by French-based Malteries Soufflet.

Daily Quiz

Test Your Knowledge

Yesterday’s Daily Quiz Question. Founded in 1889, Nintendo originally sold what?

Answer: Trading Cards. An easier question, with 58% of you getting it correct. Yes, Nintendo originally produced handmade Hanafuda playing cards before almost 100 years later, releasing its first console in 1977.

A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of October 6

📊 Broker Ratings

What do the brokers have to say?

1. Baby Bunting (BBN) - Downgrade to Neutral from Buy (Citi)

2. Boss Energy (BOE) -Downgrade to Sell from Hold (Shaw and Partners)

3. Bank of Queensland (BOQ) - Upgrade to Neutral from Sell (Citi)

4. BlueScope Steel (BSL) - Downgrade to Underweight from Overweight (Morgan Stanley)

5. Platinum Asset Management (PTM) - Downgrade to Sell from Hold (Bell Potter)

👨‍💼 Director Transactions

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

💲Dividends

Companies trading ex-dividend today

1. Future Generation Australia (FGX)

2. Duxton Water (D20)

3. Wam Global (WGB)

4. Gowing Bros (GOW)

📅 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.