Good Evening,

Welcome to Equity Espresso’s Daily Recap. 

The Aussie market fell for the second consecutive day, with the ASX 200 index dropping by 0.15% to 7,603.60. Healthcare giant CSL (-2.75%) dragged down the market on a weaker-than-expected earnings outlook.

Seven sectors ended the day in red, with health care (-1.64%) being the biggest faller, followed by Telco (-1.12%) and technology (-0.94%). Despite an 11% lift in Net Profit to $2.02 billion during the first half of FY24, shares fell after the company guided for a weaker outlook in its Vifor therapy unit.

Temple & Webster was the big mover on the All Ordinaries, climbing 9.88%, following the lead of fellow retailers JB Hi-fi and Nick Scali. The online retailer increased revenue in the first half of FY24 by 23% to $25 million, with EBITA margins of 2.9%. Investment firm Challenger (+8.3%) rose after increasing normalised NPAT by 16% to $290 million while confirming it expects FY24 to be at the top end of its NPBT guidance range.

Seven West Media was one of the biggest losers today, tumbling 11% to $0.245 after it reported a 53% fall in TV advertising revenue during the first half of FY24. Total revenue fell 5% to $775 million, while EBITA dropped by 40% from the pcp. to $124 million. James Hardie declined 8.5% to $54.19 after reporting a lower net profit margin in the March quarter compared to the three months ending December. Seek (-4.6%) shares also dropped after it said volumes in Australia and New Zealand were similar to those in FY19. The company’s revenue fell 5% to $596.8 million, while Reported NPAT declined by 74% to $35.2 million.

Macquarie Group fell 1% to $186.25, warning that FY24 profit was “substantially lower” year to date compared to 2023.

Wall Street

It was a mixed session on Wall Street Monday, with the Dow Jones (+0.35%) rising while the NASDAQ briefly surpassed its record high before finishing the day down 0.27%. The benchmark S&P 500 closed slightly lower but remained just above the 5,000-point level it crossed on Friday.

Some key data points investors will watch for this week include January’s Consumer Price Index (CPI), Producer Price Index (PPI) and Retail Sales. Nvidia (+0.16%) briefly passed Amazon (-1.21%) to become the fourth-most valuable company in the world by market cap but ended the day behind the online retailer.

Economic Data

• Australia's NAB Business Confidence Index rose to 1 in January 2024 from zero in December but remains below the long-run average.

• Australia’s Consumer Sentiment index rose 6.2% to 86 in February from 81 in January - the highest reading in 20 months.

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Quick Singles

🦘 Local News

• At least 150 Australian Taxation Office officials have been investigated over an elaborate GST fraud scheme, with some terminated and others facing criminal charges.

• The warmer weather in Victoria has put the state's electricity system under pressure, causing major outages. The Australian Energy Market Operator reported a “significant power system event” just after 1 p.m. on Tuesday.

• Nicholas O’Kane, the head of Macquarie Group’s commodities and global markets group, has resigned. Mr Kane joined the company in 2017 and earned over $171 million, making him the highest-paid Macquarie executive.

🌎️ Around The Globe

• Cybersecurity company Blackberry is aiming for an additional $100 million in annual profit as it plans to cut costs by laying off 200 staff, which is estimated to save $50 million.

• Cocoa prices have surged to a record high of $5,860/t, with climate issues in West Africa affecting production and constraining supply. Around two-thirds of global cocoa production comes from Ivory Coast and Ghana alone.

• Google CEO Sundar Pichai announced that Google One, the company's all-in-one subscription service, has surpassed 100 million subscriptions.

• OpenAI CEO Sam Altman is reportedly angling to raise $5-7 trillion to ramp up global AI chip production. Discussions are reportedly underway with investors like the UAE government, with plans also involving partnerships with chipmakers like TMSC/

• Sony Group is acquiring a half interest in pop star Michael Jackson’s music catalogue from the late singer’s estate for at least $600 million.

• A mob surrounded and set fire to a Waymo self-driving car in San Francisco. The windows were broken, and lit fireworks were thrown inside.

• Apple has created two foldable iPhone prototypes in the early stages of development. They likely wouldn’t come to market until at least 2026.

• Barclays will buy most of the banking operations of Britain's biggest supermarket group, Tesco, for about £600 million.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

ETF Data

Global Health Check

Recommendation

A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of February 7

🗂️ Broker Ratings

1. Beach Energy (BPT) - Upgrade to Buy from Neutral (Citi)

2. Beach Energy (BPT) - Upgrade to Outperform from Neutral (Macquarie)

3. CAR Group (CAR) - Downgrade to Neutral from Outperform (Macquarie)

👨‍💼 Director Transactions

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

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.