Good Evening,

Welcome to Equity Espresso’s Daily Recap. 

The Australian market broke its two-day losing streak to eke out the slimmest of gains after spending most of the trading day in the red, as the ASX 200 index finished 5.5 pts. or 0.07% higher to 7,675.80.

Six sectors finished the day in the green, with Financials (+0.56%) the big mover, with all five major banks closing higher. The most significant laggard on the day came from the interest rate-sensitive Real Estate (-1.87%) sector, with heavyweights Goodman Group (-3.63%), Scentre Group (-1.80%) and Stockland (-1.03%) all finishing in the red.

The key economic event on the radar this week is the Reserve Bank of Australia’s (RBA) two-day meeting, which kicked off today, where they will announce their latest cash rate decision. It is all but certain the RBA will keep rates on hold at 4.35% when they announce their decision tomorrow.

In company news, telco provider Superloop (-6.4%) told its rival and shareholder, Aussie Broadband, to dispose of 37,621,056 shares to reduce its stake in the company from 19.9% to 12%. Superloop said that Aussie Broadband’s recent share purchase breached its constitution, which prohibits acquisitions of 12% or more without approval from Singaporean regulators. Perseus Mining (+0.50%) secured approval from the Tanzanian government for its $258 million takeover bid for One Corp, which owns a stake in the Nyanzaga gold project in Tanzania.

Wall Street

U.S. stocks fell further on Friday, led by the technology megacap companies that have propelled this year's rally. Investors will be awaiting hints at next Wednesday’s Federal Reserve meeting on when the interest rate-cutting cycle will commence.

Adobe's (13.7%) shares dropped after it forecasted that second-quarter revenue would be below analysts' estimates, saying revenue would be between $5.25 billion and $5.30 billion, below the $5.31 billion analysts expected. The software design company said competition and weak demand for its artificial intelligence-integrated photography, illustration and video were to blame for the lower-than-expected revenue. The company’s first-quarter results did come in higher than expected:

• Revenue: $5.18 billion vs. $5.14 billion est. (+11% y/y)

• Adj. EPS: $4.48 vs. $4.38 est. (+18% y/y)

• Operating Cash Flow: $1.17 billion (-30% y/y)

Economic Data

• U.S. Consumer Sentiment edged down to 76.5 in March, the lowest mark in three months, which was also below forecasts of a 76.9 reading.

• U.S. Industrial Production rose by 0.1% during February month-on-month after falling by 0.5% drop in January, rebounding from two months of straight declines. Expectations were for no growth in the sector.

• Chinese Banks extended ¥1.45 trillion in new loans in February, missing expectations of ¥1.50 trillion and down from a record ¥4.92 trillion in January.

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Quick Singles

🌎️ Around The Globe

• Apple will pay $490 million to settle a lawsuit alleging CEO Tim Cook concealed falling demand for iPhones in China. The lawsuit stemmed from a 2019 announcement that the iPhone maker would slash its revenue forecast by up to $9 billion due to US-China trade tensions.

• Uber and Lyft will halt operations in Minneapolis on May 1 due to a new ordinance mandating a $15.57 minimum wage for ride-hail drivers.

• Morgan Stanley has hired its first-ever head of artificial intelligence, Jeff McMillion, who was elevated from a technology executive position in its wealth management division.

• The European Parliament has passed the landmark Artificial Intelligence Act. Applications banned under the new regulation include biometric and facial recognition of sensitive characteristics, social scoring, and AI that manipulates behaviour or exploits vulnerabilities.

• Apple has acquired DarwinAI, a Canadian AI startup that provides technology for visual inspection in manufacturing and specialises in making AI systems smaller and faster.

• ByteDance has attracted several potential buyers for TikTok in the U.S. if a proposed bill in the Senate forces the company to sell. Among the interested parties are Treasury Secretary Steven Mnuchin, online video platform Rumble, and former Activision Blizzard CEO Bobby Kotick.

• SpaceX has signed a $1.8 billion contract with the National Reconnaissance Office to deploy a network of advanced imaging satellites into low-Earth orbit.

• Mcdonald's blamed a global outage on a third-party provider, which affected stores from taking orders and processing credit cards. The issue, which the company said did not relate to a cybersecurity event, affected several countries, including the U.S., Japan, Australia, the UK, and Hong Kong.

• Zscaler acquired cybersecurity startup Avalor for $310 million. With its advanced data handling and vulnerability management tools, Avalor provides a comprehensive view of cybersecurity assets and manages risk data from various sources.

Markets

ASX Company Movers

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A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of March 12

📂 Broker Ratings

1. BHP Group (BHP) - Downgrade to Neutral from Outperform (Macquarie)

2. Champion Iron (CIA) - Downgrade to Neutral from Outperform (Macquarie)

3. IGO (IGO) - Downgrade to Neutral from Outperform (Macquarie)

4. Pilbara Minerals (PLS) - Downgrade to Neutral from Outperform Macquarie

5. Strike Energy (STX) - Downgrade to Hold from Accumulate (Ord Minnett)

6. Tabcorp Holdings (TAH) - Downgrade to Accumulate from Buy (Ord Minnett)

7. TechnologyOne (TNE) - Upgrade to Buy from Hold (Bell Potter)

👨‍💼 Director Transactions

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

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.