WiseTech's $1M Consultant Has Some Explaining To Do

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Welcome to Equity Espresso’s Market Recap.

The Australian share market reached a new record close on Friday, with the S&P/ASX 200 index climbing 0.9% to 8,393.8, driven by rising oil prices amid escalating tensions between Russia and Ukraine. The index recorded a 1.3% weekly gain, with Energy (+2.30%) stocks leading the advance as major players like South32 (+2.68%), Woodside (+2.20%), Santos (+1.77%), and Whitehaven Coal (+3.60%) all posted significant gains.

The Technology (-4.45%) sector was the only decliner, dragged down by WiseTech Global's 12.37% fall to $121.74 after the company downgraded its FY25 forecasts. WiseTech Global (-12.37%) held its AGM today, clearing founder Richard White of bullying allegations following a board-commissioned review by Seyfarth Shaw law firm, which characterised his leadership style as "creative abrasion" rather than misconduct. Despite stepping down as CEO last month, White has apologised to shareholders for the recent scandal and will transition to a full-time consulting role, maintaining his $1 million annual salary. The company downgraded its 2024-25 financial outlook, with revenue now expected between $1.2-1.3 billion, down from previous guidance of $1.3-1.35 billion. Chairman Richard Dammery attributed the downgrade to media scrutiny surrounding White's conduct, including allegations about his relationships and social media interactions, which reportedly diverted attention from critical product development timelines.

Gold climbed to $2,680/oz on Friday, rising for the fifth straight run, and is on track to gain nearly 5% this week as investors turn to safe-haven assets amid increasing geopolitical risks in eastern Europe. Bitcoin topped $US99,000 for the first time on Friday, on the news that current US Securities and Exchange Commission chairman Gary Gensler plans to step down on January 20, the day of Trump's inauguration.

Company News

• a2 Milk Company (+13.31%) has raised its FY25 revenue guidance to mid-high single-digit growth and introduced its first-ever dividend policy, targeting a 60-80% payout of normalised NPAT. The first interim dividend is expected in February 2025 at 60% of NPAT.

• GQG Partners (+3.76%) has announced a new $100 million on-market buy-back program for its CDIs, citing current market volatility and belief that its stock is undervalued.

• Kogan (-2.66%) received a first strike at its AGM with over 60% of proxy votes opposing its remuneration report, largely due to a controversial $17 million options payout to executives. Despite shareholder discontent, the company reported positive trading, with sales up 7.8% year-to-date.

• Lovisa (+1.38%) said that sales were up 10% in the first 20 weeks of FY25, with comparable store sales rising 1%. The company has added 27 net new stores this financial year, expanding to 927 stores across 49 markets.

• Resolute Mining (-) received some positive news, confirming that the company’s CEO, Terence Holohan, and the two other employees have been released from the Economic and Financial Centre of Bamako, in Mali.

Wall Street

Wall Street experienced a positive session on Thursday, with the Dow Jones (+1.06%) and S&P 500 (+0.53%) reaching one-week highs despite volatile trading. The Nasdaq (+0.03%) edged up marginally after Alphabet shares dropped 4.7% to a four-week low following the Justice Department's argument that Google should sell its Chrome browser to end its search monopoly.

Meanwhile, chip giant Nvidia saw its stock rise 0.5% after reporting strong quarterly results and providing an optimistic fourth-quarter revenue forecast that exceeded market expectations.

Snowflake's (+32.7%) shares surged in their best trading day since going public in 2020, following impressive third-quarter results where revenue hit $942 million, surpassing expectations of $897 million. The company projected strong growth with $3.43 billion in fiscal 2025 product revenue. Baidu (-9.06%) reported mixed third-quarter results, with revenue declining 3% to $4.78 billion, though still exceeding analyst expectations of $4.63 billion. Despite the overall revenue drop, the Chinese tech giant saw positive growth in its AI cloud business, helping drive a 12% increase in non-online marketing revenue to $1.1 billion.

S&P500 Sector Performance

Economic Data

• Japan’s Annual inflation rate fell to 2.3% in October 2024 from 2.5% in the prior month, marking the lowest reading since January.

• The U.K. Consumer Confidence Index increased by 3 points to -18 in November 2024, marking its first improvement in three months.

• U.S. Initial Jobless Claims fell by 6,000 from the previous week to 213,000 on the period ending November 16th, the least since April, and well below market expectations of an increase to 220,000.

• U.S. Existing Home Sales rose by 3.5% from the previous month to a seasonally adjusted annualised rate of 3.96 million in October of 2024

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🌎️ Around The Globe

• Bill Hwang received an 18-year prison sentence for his role in the Archegos Capital Management collapse, which caused over $10 billion in losses to Wall Street banks. He was convicted of ten criminal charges, including fraud and market manipulation.

• Comcast revealed plans to create a new publicly traded company by spinning off several of its cable networks, including USA Network, CNBC, and MSNBC. The company will maintain ownership of core NBCUniversal properties such as the NBC broadcast network, Peacock streaming service, and Bravo.

• Elon Musk and Vivek Ramaswamy, proposed heads of the new Department of Government Efficiency, advocated in a Wall Street Journal op-ed for mandatory five-day office attendance for federal workers. They suggested that those unwilling to comply should leave, potentially setting up conflicts with federal unions.

• Ford announced plans to cut 4,000 jobs in Europe, primarily in Germany and Britain, representing 14% of its European workforce. The automaker cited weak electric vehicle demand, insufficient government support, and Chinese competition as key factors, joining other major manufacturers in reducing costs amid EV market challenges.

• McDonald's plans to extend its $5 value meal into 2025 and introduce a new "buy one add one" for $1 promotion, featuring items like double cheeseburgers, McChicken sandwiches, and breakfast options.

• OpenAI is reportedly exploring the development of its own web browser and potential partnerships with Samsung for AI tools, according to The Information.

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

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