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Welcome to Equity Espresso’s Daily Market Recap.

The Australian market fell on Thursday after Wall Street ended lower after minutes from the Federal Reserve raised concerns about the rate of disinflation. The ASX 200 index ended the session 36.3 pts. or 0.46% lower, finishing at 7,811.80.

It was a mixed session from a sector standpoint, with six sectors up despite the overall market being down. Technology (+2.25%) was the big mover, thanks to a jump in Xero’s (+8.74%) share price after it reported full-year earnings that saw it record a Net Profit for the first time. More on that below. NextDC (+2.33%) shares jumped, thanks likely to Nvidia’s quarterly earnings beating expectations as demand for AI chips sees no limits. Healthcare (+1.31%) and Consumer Staples (+1.11%) were some of the other sectors to see gains.

On the opposite end of the spectrum, Materials (-2.15%) stocks were hit hardest, with BHP Group (-2.88%), Fortescue (-1.14%) and Rio Tinto (-1.96%) all seeing share falls. Gold fell by around 1.5%, its largest one-day decline since April, to trade at around US$2,360/oz. Regis Resources (-7.55%) and Bellevue Gold (-6.68%) both saw their share prices sink.

Copper futures also dropped, falling below the magical $5.00/Lbs milestone it cracked earlier in the week to trade at around $4.90/Lbs. Sandfire Resources (-6.43%) saw a sharp drop today.

In company news:

• Xero (+8.74%) shares pumped after it recorded a full-year profit of NZ$174.6 million - a big swing from the ($113.5 million) loss it recorded in 2023. Operating revenue grew by 22% to $1.71 billion, with subscribers climbing by 11%

• Nufarm (-7.07%) shares fell after its revenue for the six month period ending March fell 10.1% to $1.7 billion, while profits fell by 67% to $49.1 million.

• The Reject Shop (-5.15%) fell after a trading update in which it warned that EBIT would fall to between $4.0 million and $5.5 million. The drop comes despite total sales growth of 4.2% in the first half of FY24. For reference, EBIT in the same period last year was $23.1 million.

Wall Street

U.S. stocks fell on Wednesday after the Federal Reserve's most recent meeting minutes revealed that the board is not worried about inflation reaccelerating after data showed that progress stalled in the first quarter. The Dow Jones (-0.51%) fell back below the 40,000 mark, while the S&P 500 (-0.27%) and NASDAQ (-0.18%) were both off.

Nvidia (+6.06%) was the big mover in after-hours trading, climbing by over 6% after beating Wall Street estimates and also announcing a 10-for-1 stock split. The better-than-expected result showed that the demand for AI chips remains strong.

• Adjusted EPS: $6.12 vs. $5.59 estimated.

• Revenue: $26.04 billion vs. $24.65 billion estimated

Nvidia said it expected sales of $28 billion in the current quarter, ahead of Wall Street estimates of $26.61 billion.

In other company news, Snowflake (+4.15%) shares rose in after-hours trading after first-quarter revenue came in at $829 million, ahead of estimates of $786 million.

S&P500 Sector Performance

Economic Data

• The Bank of Korea held interest rates at 3.5% during May, which was as expected, making the 11th straight month of unchanged borrowing costs.

• Singapore’s Annual Inflation rate was 2.7% during April, holding steady for the second straight month, its lowest reading since September 2021.

• U.S. Existing Home Sales fell 1.9% month-over-month to 4.14 million units in April, the lowest amount in three months.

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Quick Singles

🌎️ Around The Globe

• Open AI vs. Scarlett Johansson. The actress has raised concerns over OpenAI's new artificial intelligence chatbot that features a voice that allegedly sounds similar to her own.

• Pixar is laying off 14% of its workforce, around 175 employees, as Disney plans to reduce content output for streaming and prioritise theatrical releases.

• Comcast has unveiled a $15 per month streaming bundle including Peacock, Netflix, and Apple TV+ for Xfinity TV and internet customers.

• The U.S. Department of Energy is planning to release 1 million barrels of gasoline from a Northeast reserve to lower gas prices for the coming Nothern Hemisphere this summer.

• Nestle is launching a new frozen-food brand aimed at the growing market of consumers who are using GLP-1 drugs like Ozempic and Wegovy.

• Google will start testing search and shopping ads in its AI-generated answers in the U.S. Based on the query's relevance and information, Ads will appear in a 'sponsored' section within AI Overview.

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