Good Evening,

Welcome to Equity Espresso’s Daily Recap. 

The Aussie market rose higher on Tuesday after spending parts of the morning in the red before an afternoon rally saw the ASX 200 index close 27.4 pts. or 0.36% higher to 7,703.20. Today's big news event was the Reserve Bank of Australia’s announcement that it would leave the cash rate unchanged at 4.35%, which market analysts expected. More on the RBA’s statement later in the newsletter.

Only the four sectors finished in the green today, with Materials (+2.11%) and Energy (+1.98%) the big movers. Iron Ore prices saw a slight recovery today after briefly falling below US$100/t to trade at US$104.50. BHP Group (+2.8%), Rio Tinto (+2.5%) and Fortescue (+3.6%) led the way for the miners. Crude Oil prices held above US$82/bbl on Tuesday, hovering near their highest levels since November as supply concerns continue to support oil prices. Woodside Energy shares (+2.3%) finished higher, as did Santos (+1.8%) and Beach Energy (+1.7%).

Markets rallied this afternoon after the Reserve Bank board took a more softer stance than in previous statements about the possibility of another interest rate rise. After announcing it would leave the cash rate on hold at 4.35%, the RBA board said, “The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain, and the board is not ruling anything in or out”. The RBA does not expect inflation, currently 3.4%, to return within its 2% to 3% target range until December 2025. Markets have priced in the RBA to cut the cash rate to 4.1% at its September meeting, with a 50% chance of another cut to 3.85% at its December meeting.

In company news, Boral (+2.4%) shares rose after it told shareholders to reject a takeover bid from Seven Group, saying the offer was “not fair and not reasonable.” KMD Brands (+2.1%), owner of Kathmandu and Rip Curl, rose thanks to an afternoon rally after reporting a 14.5% drop in sales for the first half of FY24. The company said it would postpone expanding overseas plans as it focuses on its local business.

The Aussie Broadband (-%) and Superloop (+9.4%) saga took another twist today, with Aussie commencing legal proceedings in the Federal Court of Australia to stop Superloop from forcing it to lower its 19.9% stake. Pacific Smiles (+11.4%) shares surged after it received an improved takeover offer from Genesis Capital, who upped their offer by $279 million.

Wall Street

All three leading indices on Wall Street closed higher on Monday, with a rebound in mega-cap technology stocks helping the NASDAQ (+0.82%) snap a three-day losing streak. Alphabet (+4.4%) is in talks with Apple to bring its AI engine to the iPhone, causing a spike in Alphabet's stock. Tesla (+6.3%) shareholders saw some much-needed relief after the carmaker said it would increase the price of its Model Y cars by US$1,000 in parts of Europe.

The Dow Jones rose 75.66 points, or 0.20%, while the S&P 500 gained 32.33 points, or 0.63%. Of the 11 major sectors, the weakest were rate-sensitive real estate and healthcare, with both off 0.02%.

Economic Data

• The Reserve Bank of Australia maintained its cash rate at 4.35% during its March meeting, which was in line with expectations.

• The Bank of Japan (BoJ) raised its key short-term interest rate to around 0% to 0.1% from -0.1% during its March meeting. This was in line with market expectations and broke an eight-year streak of negative interest rates.

• The U.S. Housing Market Index increased to 51 in March, from 48 in February and above the forecasts of 48.

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Quick Singles

🌎️ Around The Globe

• The Bank of Japan (BOJ) ended eight years of negative interest rates, setting a new policy rate range between 0% and 0.1% from -0.1%. It was the first interest rate rise in almost 17 years.

• Apple is in talks with Google to build its artificial intelligence engine, Gemini, into the iPhone, according to a Bloomberg report on Monday. Negotiations are underway regarding licensing some of Gemini’s features into the iPhone software this year.

• Uber has agreed to pay Australian taxi drivers over $175 million to resolve a lawsuit. The lawsuit claimed that Uber operated unlawfully in the country without proper approval.

• The Federal Trade Commission (FTC) is investigating Reddit's licensing of user data to AI companies. The inquiry aims to understand how the rapidly changing industry impacts competition and consumer data privacy.

• Accounting firm Grant Thornton is set to sell the majority stake in its U.S. arm to private equity firm Mountain Capital.

• LinkedIn is developing puzzle-based games on its platform, although no launch date has been announced yet.

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A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of March 13

📂 Broker Ratings

1. Baby Bunting (BBN) - Upgrade to Overweight from Equal-weight (Morgan Stanley)

2. Iluka Resources (ILU) - Upgrade to Neutral from Sell (UBS)

3. Southern Cross Media (SXL) - Downgrade to Accumulate from Buy (Ord Minnett)

👨‍💼 Director Transactions

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

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DISCLAIMER: Please note that the information provided in this newsletter is for educational purposes only and should not be considered financial advice. It is not intended to encourage you to buy/sell assets or make financial decisions. We strongly recommend conducting your own research before making any investment decisions.