Rio's $6.7B Lithium Leap

Good Evening,

Welcome to Equity Espresso’s Market Recap.

Australian shares edged higher on Wednesday, with the S&P/ASX 200 Index rising 0.1% to 8,187.4 points. Technology (+1.41%) and Telco. (+1.40%) stocks led the gains, helping to offset losses in the Energy (-2.45%) and Materials (-1.39%) sectors. Wall Street's rally further supported the positive sentiment, which approached record highs.

The market's upward momentum was limited by a significant drop in Energy stocks, which fell 2.5% following a 4% decline in oil prices overnight. This decline was partly attributed to China's modest stimulus plans announced Tuesday. Major Energy companies like Woodside Energy (-2.96%) and Santos (-1.79%) saw notable decreases in their share prices as investors took profits after last week's oil price surge caused by Iran's attacks on Israel.

Company News

• NOVONIX (+11.57%) and ICoNiChem have signed a Joint Collaboration Agreement to develop nickel-based cathode active materials. The project, funded under the 2024 Canada-UK critical minerals initiative, aims to improve NOVONIX's sustainable technology using recycled metal feedstock.

• Rio Tinto (-2.27%) said it plans to acquire Arcadium Lithium for $5.85 per share, valuing the company at $6.7 billion. This all-cash transaction represents a 90% premium to Arcadium's recent share price. The deal aims to establish Rio Tinto as a global leader in energy transition commodities by integrating Arcadium's world-class lithium business into its portfolio. Arcadium's current annual lithium production capacity is 75,000 tonnes, with plans to double by 2028.

Wall Street

Wall Street rebounded on Tuesday, with all three major indexes closing higher as investors shifted their focus to upcoming inflation data and the start of the third-quarter earnings season. The Dow Jones gained 0.3%, the S&P 500 rose 0.97%, and the Nasdaq climbed 1.45%. This recovery came after Monday's sell-off, triggered by surging Treasury yields, escalating Middle East tensions, and a reassessment of U.S. rate expectations.

The Technology sector led the gains, jumping 2.1%. High-growth stocks benefited from easing Treasury yields, as lower debt costs fuel their growth. Notable performers included Palantir Technologies (+6.58%) and Palo Alto Networks (+5.09%), which saw significant increases. Among the "Magnificent Seven" tech stocks, Nvidia stood out with a 4.1% gain, its largest one-day percentage increase in a month. Apple, Tesla, and Meta Platforms also saw gains between 1.4% and 1.8%.

Traders are now pricing in an 89% chance of a 25 basis-point interest rate cut in November, according to CME FedWatch, reflecting ongoing market optimism despite recent volatility.

Roblox (-2.13%) shares fell after Hindenburg Research disclosed a short position on the gaming platform, alleging the company inflated metrics. Roblox rejected the claims, calling them “misleading.”

S&P500 Sector Performance

Economic Data

• The Reserve Bank of India kept its benchmark policy repo at 6.5% for the tenth consecutive meeting in October 2024, which was in line with the market expectations.

• The Reserve Bank of New Zealand lowered its official cash rate (OCR) by 50 basis points to 4.75% during its October 2024 policy meeting, marking the second consecutive rate cut and aligning with market expectations.

• Germany's Trade surplus widened to €22.5 billion in August 2024, up from an upwardly revised €16.9 billion in July, significantly exceeding forecasts of €18.4 billion.

Sponsor

The 32,481% Boom: First Disruption to $martphones in 15 Years

Mode saw 32,481% revenue growth from 2019 to 2022, ranking them the #1 overall software company, on this year's Deloitte 500 fastest-growing companies list. Mode is on a mission to disrupt the entire industry with their “EarnPhone”, a budget smartphone that’s helped consumers earn and save $325M for activities like listening to music, playing games, and… even charging their devices?!

Mode has over $60M in revenue - this is your chance to invest in a $1T+ market opportunity!

Secure Your Shares Today

This is a paid advertisement for Mode Mobile Reg A offering. Please read the offering statement at https://invest.modemobile.com/.

Quick Singles

🌎️ Around The Globe

• Berkshire Hathaway has reduced its stake in Bank of America from 13.1% to 10.1% since July, netting over $10 billion. The investment firm began its involvement with the second-largest U.S. lender in 2011.

• FTX plans to repay 119% to 98% of customers with $50K or less within 60 days. Larger account holders will receive 100% plus interest, likely in 2025. Exact dates are pending, with FTX's cash reserves estimated to reach $14.7B-$16.5B.

• Google is facing a permanent injunction forcing it to offer alternatives to its Play store for Android app downloads following a U.S. judge's ruling in Epic Games' antitrust lawsuit. The decision prohibits Google from paying companies to avoid competition and establishes a compliance committee.

• Hyundai Motor India's upcoming $3 billion IPO, India's largest, is priced at 1,865-1,960 rupees per share. Opening Oct. 14-17, it offers a 186-rupee discount to eligible employees.

• TikTok faces lawsuits from 13 U.S. states and D.C., alleging harm to youth through addictive software and inadequate protection. The suits seek financial penalties and challenge TikTok's content moderation claims, escalating the platform's legal battles with U.S. regulators.

• Fast Retailing, owner of Uniqlo, is expected to surpass its profit forecast for the third consecutive year. Analysts predict a 24% increase in operating profit to 478.3 billion yen for the fiscal year ended August, slightly above the company's 475 billion yen estimate. This growth is attributed to Uniqlo's expansion in Western markets and recovery in China.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

Global Health Check

ETF Prices

🔍️ ETF Watch

Want to see how one of your ETFs compares to the rest?

Please reply to this e-mail and tell us an ETF or two you want to be included in the tables below.

Australian Index

Australian Sectors

Global Indices & Sectors

Global Strategy

Property & Infrastructure

Fixed Income

Mixed Assets

*1-year, 3-year and 5-year returns are calculated as of August 31 2024.

The Last Word

How are we doing?

We always love hearing from our readers and are constantly seeking feedback.

• How are we doing with Equity Espresso?

• Is there anything you’d like to see more of or less of?

• Which aspects of the newsletter do you enjoy the most?

Hit reply and say hello - or leave us feedback in the poll below:

If you enjoyed this newsletter, forward this e-mail to a friend.

If you’re that friend, subscribe here.

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 economic decisions. We strongly recommend conducting your research before making any investment.