9 December 2024 | Weekly Snapshot

Did you know?

In August 2024, over 300,000 paid trips were completed by Waymo’s driverless cars in California. Waymo is owned by Alphabet, who have 300 self-driving cars in San Francisco alone.

Market Movements

The ASX 200 fell -0.18% over the week. In the USA, the S&P 500 notched up its 57th closing record in 2024 on Friday as confidence around a December rate cut improved on the back of supportive jobs data from the Nonfarm Payrolls. For the week, the S&P 500 up 0.96%, Nasdaq up 3.34%, while the Dow was down 0.6%, and the Russell 2000 fell 1.06%

De Grey Mining was one of the best performing stocks on the ASX last week following the announcement that Northern Star Resources, an Australian gold miner, had agreed to acquire De Grey in an all-share deal valued at A$5 billion. Collins Foods’ was one of the weakest performers on the ASX last week with its share price falling -7.68%, following the company’s half-year financial results that cited a cautious outlook. For the six months Collins Foods reported a 52% drop in statutory net profit to $24.1 million, despite a 1.2% increase in revenue to $703.5 million. This profit decline was attributed to rising operational costs, including wages and energy expenses, which have eroded profit margins.

The ASX Information Technology Index was the strongest group gaining 1.96% driven by Technology One, who develops and distributes financial management and enterprise software solutions, who gained 4.4% and Life360, who offers the safety and location sharing application, gained 3.6%. The ASX Real Estate Index was the weakest, falling -2.65% and driven by Charter Hall Group, the real estate investment company that develops commercial, residential and industrial properties, who fell 5.15%.

On the S&P 500 Super Micro Computer, a leading provider of high-performance, high-efficiency server technology and related hardware solutions, was the best performing stock rallying 34.59% after announcing that an independent special committee had completed its review of the company’s accounting practices and found no evidence of fraud or misconduct by the management or board of directors. Since 30 June 2024 the company is still down 46.3%. Intel Corp, a leading multinational technology company that designs and manufactures semiconductor chips and related technologies, fell 13.01% last week, primarily due to the abrupt departure of CEO Pat Gelsinger and concerns about the company’s strategic direction.

Portfolio Movements

Woodside signs contract for the development of Louisiana LNG – Expects FID early next year

• Natural gas company and top 10 global energy producer Woodside announced it has signed a revised turnkey engineering, procurement and construction (EPC) contract with Bechtel for the development of the three train 16.5 million tonnes per annum development of Louisiana LNG, the renamed Driftwood LNG development project they acquired a few months ago.
• Woodside CEO Meg O’Neill said the signing of the EPC contract and continuation of engineering and construction activities contemplated by the LNTP represented an important step in the development of Louisiana LNG. Noting the project is well positioned to provide LNG into the growing global market and generate value for shareholders in accordance with our capital allocation framework.
• Woodside continues to target final investment decision (FID) readiness from the first quarter of 2025. The project which is more of an energy infrastructure play than their typical oil and gas production projects did seem a little unusual at the time although does look increasingly favourable under the new Trump administration.

CME Group ups dividend and announces buyback

• CME Group, the old Chicago Mercantile Exchange and world’s leading derivatives exchange announced two initiatives to return capital to shareholders with a 2024 variable dividend amounting to $5.80 per share, this is on top of the usual quarterly dividends for an 8% dividend increase for 2024 over 2023.
• A share repurchase program of up to $3 billion of CME Group Class A common stock was also announced, subject to market conditions. The share repurchase plan does not have an end date and does not obligate CME Group to repurchase any specific dollar amount or number of shares.
• CME Group is on track for another record year of earnings in 2024. “The combination of a flexible share repurchase program with our existing quarterly and annual variable dividend structure allows us to efficiently return capital and addresses the different interests and preferences of our diverse shareholder base,” said CME Group Chairman and Chief Executive Officer Terry Duffy.

Woolworths provides update on supply chain industrial action – Expects $50 million revenue hit to date

• Woolworths provide an update on the ongoing industrial action in relation to the enterprise agreements at three distribution centres in Victoria and one in NSW. WOW said they have been engaging in negotiations with the United Workers Union (UWU) for over four months with the UWU seeking pay increases at these sites in excess of 25% over three years.
• The strike action has now extended for 12 days with the company noting Australian Food sales have been negatively impacted by approximately $50million to date (up to 2 December) and until the industrial action is resolved, a further impact to sales is expected.
• Woolworths said they remain committed to resolving the action as soon as possible with new CEO Amanda Bardwell saying we sincerely apologise to all of our customers for the inconvenience caused by the inconsistency of supply across some product lines in some Victoria, southern NSW and ACT stores.

The Week Ahead

• Monday: China PPI Year on Year (YoY) is expected to be -2.8% compared with the prior reading of -2.9%, CPI YoY is expected to be 0.4% compared with the previous reading of 0.3% and the M2 Money supply is expected to rise by 7.5%, no change from the previous month.
• Tuesday: Australia RBA cash rate target expected to remain unchanged at 4.35%
• Thursday: US Consumer Price Index is expected to be 0.3% Month on Month (MoM) and 2.7% Year on Year (YoY), up from the respective prior readings of 0.2% and 2.6%. Australia Unemployment Rate expected to be 4.2% compared with the previous reading of 4.1% and the change in employment is expected to 25k compared with 15.9k
• Friday: US PPI Final Demand is expected to be 0.3% Mom (compared with the prior reading of 0.2%) and 2.6% YoY (compared with the prior reading of 2.4%), Initial Jobless Claims are expected to be 220K compared with 224k last week, while continuing claims are expected to rise marginally to 1,878k from 1,871k