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. 🏦 RBA Plays Wait & See

2. 🛢️ Energy Sector Gets Wiped

3. 🏠️ Australian Dwelling Approvals Leap

4. ✈️ Slimmer Travellers Can Save Airlines

5. 🏎️ A New Player in the Pits?

The Recap

October's Ominous Opening

The futures market indicated it was going to be a sea of red, and well, they were right. The ASX200 fell below the 7,000 mark for the first time since March this year, closing the day down 89.8 points or 1.28% to 6,943.4.

New RBA governor Michelle Bullock followed the script at today’s RBA meeting, with rates remaining on hold at 4.1% for the fourth straight month.
The governor said this will give the board time to “assess the impact of the increase in interest rates to date and the economic outlook.”
However, we’re not out of the woods yet, as Ms. Bullock warned that “some further tightening of monetary policy may be required”.

Aussie bond prices continue to creep higher, with the 10-year treasury yield at 4.55%, heights not seen since August 2011. The increase in longer-duration bond yields indicates that the market believes interest rates will stay higher for longer - which is bad news for equity markets.

Energy (-3.69%) stocks saw the sharpest falls, with Woodside (-3.7%), Santos (-4.3%) and Ampol (-1.4%) all finishing lower. Oil’s upward momentum looks to be stalling, as the price of WTI traded near $US88 a barrel after declining by 2.2% overnight. Good news for when you're next at the petrol pump.

The defensive Healthcare (+0.24%%) sector was the only bright spot on the index, as CSL shares rose 0.95%, leading the sector higher.

Outlook

The S&P 500 (-0.03%) and NASDAQ (-0.07%) futures are both trading marginally lower. Non-farm employment change and PMI data are the key items on the economic calendar tonight in the U.S.

Economic Data

• The number of approved dwellings in Australia rose in August, reaching 13,647 units. This rise comes after a revised 7.4% decrease in July. August’s figures smashed expectations, which predicted a 2.5% increase.

• The Unemployment rate in the Eurozone fell by 0.1% from July to August, sitting at 6.4%. This is the lowest-ever figure for the currency union, which is also down 0.3% from August 2022.

• The Nationwide House Price Index in the U.K. dropped by 5.3% year-on-year in September 2023, the same pace as in the previous month, compared with market expectations of a 5.7% decrease.

• The U.S. ISM Manufacturing PMI rose to 49 in September from 47.6 in August, well above market expectations of 47.8.

• The S&P Global U.S. Manufacturing PMI was revised to 49.8 in September, surpassing the preliminary estimate of 48.9 and exceeding August's final reading of 47.9. This is the fifth consecutive month of contraction in the sector's health, albeit a small one.

Wall Street

The S&P 500 (+0.01%) ended flat on Monday, while the NASDAQ (+0.67%) was higher, thanks to a 2.9% rise from chip designer Nvidia after Goldman Sachs added it to its conviction list of top stock picks.

The Utilities sector was the worst performer in the S&P sector, falling 4.7% in its biggest one-day percentage decline since April 2020. Energy also fell as oil prices took a breather, while Technology was up 1.3%. S&P 500 companies are set to release their Q3 results this month. Analysts predict a 1.6% increase in earnings YoY, following a 2.8% decline in Q2.

Sphere Entertainment rose 11.1% on Monday after a U2 show debuted its Las Vegas Sphere venue Friday night. Sphere is the newest iteration of immersive and futuristic concert experiences with a next-generation wraparound screen.

Tesla stock traded flat despite reporting lower-than-expected deliveries in Q3. The company delivered 435,059 cars, which fell short of the estimated 456,722. This decline was due to planned factory downtimes and lower deliveries compared to Q2, where 466,140 vehicles were delivered. However, Tesla reassured investors that it is still on track to achieve its target of 1.8 million annual deliveries by 2023.

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Quick Singles

🪃 Local News

Due to hot, dry, and windy conditions, NSW authorities have imposed total fire bans in eight local government areas, including the Greater Sydney region.

The federal government’s plan to raise the earnings on tax from superannuation to 15% to 30% is expected to receive opposition from the Greens and Coalition. The tax will apply to superannuation balances over $3 million.

The Australian Tennis Open will be extended to a 15-day tournament in response to an increasing number of matches running late into the night. Next year’s tournament starts on January 15.

🌏 Around The Globe

Too hot to handle - Apple has acknowledged that some of its latest iPhone models may generate more heat than previous models during initial use, as the devices work to transfer data and apps from the previous phone.

Wait, What? - A Jefferies financial analyst estimated that United Airlines would save $80 million yearly in fuel costs if the average passenger weighed 10 pounds (4.5kg) less. Would you like the Chicken, Fish or Ozempic?

Revival - Toys “R” Us stores are making a comeback, announcing an expansion of up to 24 flagship stores, including at airports and cruise ships.

Google Bard is developing a 'Memory' feature to remember and adapt to user's personal details. 'Memory' will retain information like dietary restrictions or family details to provide personalised responses.

According to Business F1 magazine, Apple is interested in making a move into Formula 1 as their next big venture in sports. The potential offer could be worth around $2 billion annually, granting Apple exclusive streaming rights for Formula 1 racing.

The production of Cocoa is expanding beyond West Africa as farmers in Brazil, Ecuador, and Colombia try to cash in how rising cocoa prices

₿ Crypto Corner

The SBF criminal trial begins this week to determine if FTX CEO Sam Bankman-Fried committed massive fraud while building his now-collapsed $32 billion crypto.

Su Zhu, one of the founders of the bankrupt crypto hedge fund Three Arrows Capital, was apprehended in Singapore.

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Markets

ASX200 Company Movers

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

ASX News

ASX Company Announcements

Avita Medical (AVH) shares slumped 19% after it submitted a premarket approval supplement application to the U.S. FDA for its RECELL GO™ device. The FDA has requested additional information, which is expected to delay Avita’s product launch to between May 1 and July 1 2024.

Boss Energy (BOE) and Coda Minerals (COD) have been granted four highly prospective tenements for uranium and copper mineralisation as part of the Kinloch Project, which is situated in the northern Murray Basin. Boss Energy will have 100% rights to the Uranium, while Coda will be entitled to 100% of the base metal rights.

Computershare (CPU) is selling its U.S. mortgage services business CLS for $US720 million ($1.13 billion) to New York Stock Exchange listed asset manager Rithm Capital. The deal is aimed to be completed by early Q4 FY24.

RPM Global (RUL) fell 1% despite providing the market with a Q1 FY24 business update today, reporting a 154% increase in Total Contracted Value (TCV) software sales during the quarter to $13.2 million. Annually recurring revenue (ARR) from software license and maintenance ended the first quarter at $56.0 million.

West African Resources (WAF) and Candian-listed Orezone Gold Corp. announced they intend to enter an MOU to investigate potential synergies on their respective mining projects. The two projects are located 14km from each other.

Post of The Day

What The?

TikTok Trends or Tech Lapse: Who's Behind the Surge in Kia and Hyundai Thefts

Two of the most globally recognised car manufacturing giants, Kia and Hyundai, are facing an unparalleled rise in car thefts.

Both companies are pointing the blame at social media platforms, highlighting how these platforms have become the breeding grounds for tutorials on how to steal these specific car models effortlessly. Thieves aren't shy about parading their stolen vehicles on these platforms, either.

The significant increase in thefts of Kia and Hyundai cars has led to legal battles and class actions. Court filings reveal that both manufacturers claim that the rise in thefts is not due to the absence of basic anti-theft technology in their vehicles but rather the impact of social media.

They stress that their vehicles were not frequently stolen before the popular "Kia Boys" trend emerged on social media. Therefore, they argue that the responsibility should fall on the criminals and the platforms they use, not the car manufacturers.

This argument has raised eyebrows. Despite the companies downplaying the absence of engine immobilisers in their cars, statistics from the National Insurance Crime Bureau contradict their stance. The most stolen vehicles in 2022, apart from Chevy and Ford pickups, include older models predating immobiliser installation.

An immobiliser is an electronic security device fitted to a motor vehicle that prevents the engine from being started unless the correct key (transponder or smart key) is present.

Hyundai did release a software update in February to curb these thefts. Meanwhile, platforms like TikTok have redirected queries to their community guidelines that discourage promoting criminal activities.

Daily Quiz

Test Your Knowledge

Last Week’s Daily Quiz Question. Where does Daniel Andrew's tenure of 8 years and 297 days rank him among Victoria's longest-serving premiers?

Answer: 4th, A tricky one, with only 21% getting that correct. 2nd was the most popular answer. Dan Andrews sits behind Sir James McCulloch, who did 4 separate stints as premier between 1863 and 1877, totalling 8 years and 304 days. Sir Henry Bolte is Victoria’s longest-serving premier, with a 17-year and 77-day stint between 1955 and 1972.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of September 27

1. Pilbara Minerals (PLS) - 11.95%

2. Genesis Minerals (GMD) - 10.08%

3. Flight Centre (FLT) - 9.59%

4. IDP Education (IEL) - 8.89%

5. Syrah Resources (SYR) - 8.83%

6. Core Lithium (CXO) - 8.80%

7. Sayona Mining (SYA) - 8.59%

8. Select Harvests (SHV) - 8.20%

9. Liontown Resources (LTR) - 7.83%

10. Appen (APX) - 7.67%

📊Broker Ratings

What do the brokers have to say?

Atlas Arteria (ALX) - Downgraded to Hold from Add (Morgans). Target price is $5.67.

👨‍💼 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.