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Welcome to Equity Espresso’s Daily Recap. 

The Aussie market fell again on Wednesday, with a sell-off in Consumer Staples stocks Woolworths (-6.6%) and Coles (-4.2%) driving the market lower. The ASX 200 index finished the day 50.6 pts. or -0.66% lower, with seven sectors closing in the red.

Woolworths (-6.6%) was the big story today, finishing well down after releasing a trading update while also announcing that chief executive Brad Banducci is stepping down after more than eight years at the helm. This followed a Four Corners interview aired on Monday, where the CEO walked out. The retailer reported a 4.5% sales growth during the quarter - slightly below estimates of a 5.0% rise.

Materials (-1.41%) and Telco (-1.08%) stocks also dragged the market lower, while the Technology (+2.2%) sector was the big positive mover of the four sectors to finish in green, thanks to an 11.2% increase from Wisetech following its half-year earnings reports.

Here is a snapshot of some of the companies reporting earnings today:

• National Austalia Bank (+0.4%) shares rose despite a 16.9% drop in cash earnings in the December quarter to $1.8 billion as the bank warned of an increase in arrears in home loans. NAB also increased its Net-Interest Margin during the quarter, although it did not quantify the amount.

• Domino’s Pizza (+2.2%) regained some ground despite cutting its first-half dividend to $0.55 from $0.67 in the same period last year. Net profit fell 9.2% to $58 million. Total revenue was up 11% to $1.27 billion.

• WiseTech (+11.2%) increased its statutory profit by 8% to $118.2 million during the half-ending of December, with a 32% lift in revenue to $500.4 million, helped by an increase in prices. WiseTech reconfirmed its fiscal 2024 guidance range for revenue of $1.04 billion to $1.095 billion.

• Corporate Travel Management (-20.2%) sunk after missing analysts e’ expectations by around 6%, reporting a 25% increase in revenue to $363.7 million and a 96% spike in underlying EBITDA to $100.7 million.

Wall Street

U.S. stocks finished lower on Tuesday, with the NASDAQ (-0.92%) seeing the largest fall of the three main indices as Nvidia (-4.35%) stock fell ahead of its much-anticipated earnings report set to drop after the market close on Wednesday. Nvidia's fall was its biggest one-day percentage drop since October 17, dragging the semiconductor index down. The S&P 500 index fell by 30.06 pts. to 0.60%, while the Dow Jones Average dropped 64.19 pts. or 0.17%

Amazon will join the Dow Jones Industrial Average next week, replacing Walgreens Boots Alliance, with the swap to take effect next Monday. The Dow Jones measures the daily stock market movements of 30 U.S. publicly traded companies listed on the NASDAQ or the New York Stock Exchange (NYSE).

Walmart's (+3.23%) stock closed at a record high and was the best performer on the Dow Industrials after the U.S. retailer forecasted fiscal 2025 sales well above Wall Street expectations while raising its annual dividend by 9%.

Discover Financial (+12.6%) stock rose after it agreed to be acquired by Capital One Financials in a $35.3 billion deal. Home Depot (+0.06%) stock barely budged after reporting a 3% sales decline year-over-year but still beat revenue and earnings expectations. The home improvement retailer expects sales to climb by 1% in fiscal 2024.

In after-hours trade, Palo Alto Networks (-21.1%) stock plunged after providing full-year revenue growth that missed expectations. Cybersecurity guided for between 15% to 16% sales growth, down from previous guidance of 18% to 19% growth.

Economic Data

• Australia's Wage Price Index increased by 4.2% YoY in Q4 of 2023, compared with market forecasts and a 4.1% growth in Q3. This marked the highest reading since Q1 of 2009, with public sector wages rising 4.3%.

• Japan's Trade Deficit narrowed to JPY1,758.311 billion in January from JPY3,506.43 billion in the same month last year. Market consensus was a gap of JPY1,925.9 billion.

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Quick Singles

🌎️ Around The Globe

• Indonesia has announced new incentives to promote the sales of both locally produced and imported electric vehicles (EVs). The measures include removing the luxury tax on EVs for the 2024 fiscal year and eliminating import tax until the end of 2025. Additionally, the government will lower the value-added tax from 11% to 1% for those who purchase EVs this year.

• Elon Musk claims that Neuralink’s first human trial participant can control a computer mouse with their brain, nearly one month after having the company’s chip implanted.

• Twenty technology companies, including OpenAI, Google and Meta, signed an agreement to help prevent AI deepfakes in the 2024 elections in more than 40 countries.

• French Auto-parts supplier Forvia SE will cut roughly 13% of its workforce over the next five years as it plans to use artificial intelligence to better compete with rivals as it shifts to Electric Vehicles (EV).

• Bloomberg reported over the weekend that Nintendo will delay the release of its Switch 2 until early 2025 instead of late 2024 as originally planned.

• The crew of a Belize-flagged ship abandoned the vessel on Sunday evening after an attack by Houthi rebels, forcing the crew to abandon the ship.

• NASA is looking for four volunteers to live in its 1,700-square-foot Mars simulation for one year, starting in 2025. Applicants must be U.S. citizens and between 30 and 55 years old.

• Canned water brand Liquid Death is adding electrolyte packets to its product range - with a new product called Death Dust.

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A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of February 15

🗂️ Broker Ratings

1. APM Human Services International (APM) - Downgrade to Equal-weight from Overweight (Morgan Stanley)

2. ARB Corp (ARB) - Upgrade to Accumulate from Hold (Ord Minnett)

3. Baby Bunting (BBN) - Downgrade to Neutral from Buy (Citi)

4. Judo Capital (JDO) - Downgrade to Underperform from Neutral (Macquarie)

5. McMillan Shakespeare (MMS) - Upgrade to Accumulate from Hold (Ord Minnett)

6. Nuix (NXL) - Upgrade to Overweight from Equal-weight Morgan Stanley

7. Sims (SGM) - Upgrade to Neutral from Sell (Citi)

8. Strike Energy (STX) - Downgrade to Neutral from Outperform Macquarie

9. Solvar (SVR) - Downgrade to Hold from Buy Bell Potter

👨‍💼 Director Transactions

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

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