Good Evening,

Welcome to Equity Espresso.

We’re here to catch you up on the day’s stock market news in Australia and abroad.

Here’s a sample of what you may have missed today:

1. 🏦 Markets In ‘Extreme Fear’

2. 💵 Aussie Dollar Continues To Fall

3. 📞 Vocus Exclusivity Expires

4. 📈 Top Stock Performers in September

5. 🏦 Chaos in Congress

The Recap

Markets Continue To Slide

How quickly the tide can turn.

All of the 2023 gains have been wiped out, as the ASX200 index sunk to an 11-month low, shedding 53.2 points or 0.7% to 6,890.2. Over in the U.S., the S&P 500 lost over 1.3%, closing at its lowest levels since June.

Sentiment has started to shift in equity markets. Global treasury yields keep rising; economic data remains positive, giving the reserve bank ammunition to continue the rate hike cycle.

The ASX200 index was trading at 7,318.0 as recently as September 4 - a mere 30 days ago but has since fallen by more than 6.0%. It’s a reminder of how quickly sentiment can shift.

The Financials (-1.5%) and Telco (-1.1%) sectors fell the most today, whilst Utilities (+0.3) was the only bright spot on the market.

The Australian dollar continues to tumble, briefly falling below US63¢, adding to the case for new governor Michele Bullock to raise interest rates when the RBA meets next month. Higher interest rates can attract more foreign investment, increasing the demand for the currency and can help drive prices higher.

In company news, Vocus’s exclusivity rights to complete due diligence on acquiring part of TPG’s business expired. Orora moved one step closer to acquiring French glass maker Saverglass.

We also look at five of the best-performing ASX stocks during September.

Outlook

It’s looking like another night of red in the U.S. The S&P 500 (-0.27%) and NASDAQ (-0.31%) futures are down this afternoon, indicating more pain to come overnight. Non-farm employment change and PMI data are the key items on the economic calendar tonight in the U.S.

Economic Data

• The Judo Bank Australia Services PMI Business Activity Index rose from 47.8 to 51.8 in September, the highest growth since May.

• U.S. job openings unexpectedly increased in August amid a surge in demand for professional and business services workers. Job openings increased by 690,000 to 9.61 million in August. The jump snapped a three-month straight decline in job openings.

• The Reserve Bank of New Zealand kept rates on hold at 5.5%, which was in line with expectations, warning rates may need to stay higher for longer to return inflation to target.

Wall Street

The S&P 500 (-1.37%) index closed at its lowest level since June 1 as a stronger job opening read underscored the view the Federal Reserve may need to keep interest rates high. Treasury yields continue to climb, with the 10-year yield closing in at 4.80% while the 2-year is at 5.15%.

A political bombshell overnight - The republican party turned on one of their own as The House of Representatives ousted speaker Kevin McCarthy nine months after winning a dramatic 15-round battle for the chair.

Eli Lilly announced plans to purchase cancer therapy developer Point Biopharma for $12.50 a share in cash, or about $1.4 billion. Point Biopharma shares surged nearly 85% after the news.

The Fear and Greed index is now sitting in ‘Extreme Fear’ with a 17 rating - the last time it was this low was October 2022.

The Fear & Greed Index is a measure to gauge the market's mood.
It operates under the belief that excessive fear typically results in declining share prices, while excessive greed can have the opposite effect. The index uses seven different distinct indicators that measure stock market behaviour.

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Quick Singles

🪃 Local News

• Australian cattle costs are declining significantly, with numbers at their lowest in nearly nine years. The situation will likely worsen as ranchers are forced to cull their herd due to the onset of El Niño. The Eastern Young Cattle Indicator has already decreased by almost 60% this year. Australia experienced its driest September on record, and with El Niño expected to continue until at least the end of February, the country can expect warmer conditions and lower rainfall.

• Tasmania's Attorney-General Elise Archer resigned from her position after messages were leaked, allegedly showing her insulting premier Jeremy Rockliff - calling him “gutless”. An independent investigation has also been launched, claiming Ms Archer engaged in bullying and inappropriate behaviour, sending a text message to a staffer saying, "Turn off comment please. Sick of victim-survivors." Ms Archer says the comments are old and taken out of context.

🌏 Around The Globe

• On Tuesday, the House voted 216 to 210 to remove Kevin McCarthy, a Republican from California, from his position as House speaker. This decision was made after he reached an agreement with House Democrats to prevent a government shutdown at the last minute. The move was initiated by Matt Gaetz, a Republican representative, who on Monday night called for a vote to vacate the office of the speaker, following through on a threat he had made the previous week to remove McCarthy from his position.

• Meta will charge European Union Facebook and Instagram users a $14 monthly fee to access both platforms without ads.

• Berkshire Hathaway has sold off $130 million of HP stock in the last three trading days, bringing their total cashed-in printer and PC maker shares to $540 million in the past month.

• Billionaire LVMH founder Bernard Arnault is being investigated for money laundering allegations by French authorities. Arnault's team denies the claims.

• Netflix plans to boost engagement and revenue by selling merchandise inspired by their shows, including for upcoming releases.

• Faster Drive-Thru - An Intouch Insight study found that the average total time spent in a drive-thru land shrank by 29 seconds in the U.S. as the average number of cars in line to place orders fell from 2.76 to 1.27. The study included 1,500 locations ranging from McDonald’s Burger King, KFC, Taco Bell and Wendy’s

₿ Crypto Corner

• Nine Ethereum-based futures ETFs launched in the U.S. this week, including VanEck and ProShares. Demand was low, according to Bloomberg; by halfway through the day, a little under $2 million in volume had been traded.

• Bankrupt crypto lender Celsius plans to establish a new entity funded with $450 million to repay creditors by year-end.

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Markets

ASX200 Company Movers

Index & Commodity Prices

Bond Prices

ETF Watch

ASX News

ASX Company Announcements

The fate of Vocus Group's attempt to acquire TPG Telecoms (TPG) is uncertain as Vocus' exclusive due diligence period has expired. Nevertheless, discussions are ongoing between the two parties. Vocus put forward a $6.3 billion offer to purchase TPG's Enterprise, Government, and Wholesale assets and its fixed infrastructure assets.

Hancock Prospecting has upped its stake in Liontown Resources (LTR) by another 50,766,886 shares, taking its ownership stake to 14.67%.

Mineral Resources (MIN) fell after finalising a $US1.1 billion debt offer. MinRes says it intends to use the cash proceeds for general corporate purposes, including capital expenditures.

Orora’s (ORA) bid for French glass-maker saverglass has taken another step forward following the completion of a works council consultation process in France. The acquisition is expected to be finalised during the last quarter of 2023.

Post of The Day

Deep Dive

5 Big Movers During September

We recap 5 of the best-performing stocks on the ASX during September

1. Stickland Metals (STK), +75%. The mining explorer reported “excellent” drilling results at its Horse Well prospect at the Tandal Gold project in September. Stricklands share price jumped from $0.053 to $0.068 in the subsequent days following the announcement on September 27. Strickland provided an additional update this past Monday, reporting it had found an additional gold discovery, assaying at 58m at 1.7 grams per tonne.

2. Lithium Power Intl. (LPI), +50%, saw its share price surge late in the month on media speculation that the company is discussing a potential transaction with Chilean mining company Codelco. Lithium Power confirmed that discussions are taking place, but no agreement on terms has been reached.

3. Deep Yellow (DYL), +48%. As regular readers will know, Uranium prices have been rising recently, benefiting ASX-listed companies with exposure to the sector. Uranium prices rose 40% during September. Deep Yellow didn’t report any pertinent news during the month but did present at the Bell Potter Emerging Leaders conference on September 12. Deep Yellow has two flagship projects in Nambia and Western Australia, where it claims to have the largest uranium resource base of any ASX-listed company (409 million pounds).

4. Boss Energy (BOE), +40%. Another Uranium company benefiting from the spike in prices. Boss has a 100% ownership interest in the Honeymoon uranium project covering 2,595 sq. km. in South Australia. Boss reported strong infill drilling results at the Gold Dam deposit at its Honeymoon Uranium project during the month. The next step will be to start baseline studies to advance the deposit towards production.

5. Bowen Coking Coal (BCB), +27%. The Queensland-based coking coal explorer had a positive month as the price of coking coal rose 38% to reach heights last seen in March this year. The company also announced late in the month that it had agreed to revised payment terms of its US$51 million loan, which has been pushed back 12 months.

Daily Quiz

Test Your Knowledge

Yesterday’s Daily Quiz Question. What is the length of Michele Bullock's appointed term as Governor of the RBA?

Answer: 7 years. The most popular, winning 62% of the vote. The Australian RBA Governor role usually lasts for seven-year terms. Michele Bullock’s term will end on September 17, 2030.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of September 28

1. Pilbara Minerals (PLS) - 11.59%

2. Genesis Minerals (GMD) - 10.17%

3. Flight Centre (FLT) - 9.59%

4. Syrah Resources (SYR) - 8.98%

5. IDP Education (IEL) - 8.88%

6. Core Lithium (CXO) - 8.81%

7. Sayona Mining (SYA) - 8.50%

8. Select Harvests (SHV) - 7.83%

9. Liontown Resources (LTR) - 7.77%

10. Appen (APX) - 7.69%

📊Broker Ratings

What do the brokers have to say?

1. ALS Ltd (ALQ) - Downgraded to Sell from Lighten (Ord Minnett). Target price is $8.40

2. Seven Group (SVW) - Downgrade to Lighten from Hold (Ord Minnett). Target price is $27.50.

3. Tabcorp Holdings (TAH) - Upgraded to Accumulate from Hold (Ord Minnett). Target price is $1.10

👨‍💼 Director Transactions

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

💲Dividends

Companies trading ex-dividend today

📅 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.