ASX to push higher in pivotal week for interest rates

Good Morning,

This morning's briefing covers global stock markets, inflation updates, and earnings reports. European stocks fell on expectations of the ECB maintaining interest rates. Supercore inflation in the US edged up in April but remained below its October 2022 peak, while housing prices continued to surge. Nvidia and Costco both reported strong earnings. Later in the newsletter, we have a recap of this week's top news stories from around the world, including business deals and ANZ's property market.

Let’s jump in!

Before The Bell

Markets

• Supercore inflation rose slightly in April, but remained below its October 2022 peak. Housing prices surged, with the Case-Shiller index showing a hefty 7.4% increase year-over-year. (TRP)

• European stocks sank as hotter-than-expected inflation dampened hopes of the ECB easing policy. The STOXX 600 fell 0.46%, with France's CAC 40 down 1.26% and Germany's DAX dropping 1.05%. The UK's FTSE 100 also slipped 0.51%. (TRP)

• Japanese markets were split: the Nikkei 225 dipped 0.4%, while the broader TOPIX rose 1.1%. This comes as global risk appetite improved due to expectations of the US Fed potentially cutting interest rates. (TRP)

Earnings & Data

• Third Age Health pays out highest dividend in company’s history (NBR)

• Smartpay's annual profit flat on $1m cyber security expense (NBR)

• Ryman calls for new aged care funding model (NBR)

• E.l.f. Beauty shares soar 19% after retailer indicates its torrid growth may not be over. (CNBC)

• Nvidia reported fiscal first-quarter earnings on Wednesday that beat expectations for sales and earnings, and the stock rose in extended trading over the $1,000 per-share threshold. (CNBC)

• European low-cost airline Wizz Air forecast a higher annual profit on Thursday on the back of a strong summer and robust travel demand, after swinging to an annual net profit after three years. (CNBC)

• Costco beat third-quarter revenue expectations of US $58.52 billion for the quarter ended May 12 (RT)

• Dell Technologies shares tumbled about 14% in premarket trading on Friday, as the PC and server maker expects sizeable AI investments to dent its quarterly profit (RT)

• Pfizer sees lung cancer drug topping $1 billion in sales following impressive 5-year data (RT)

News Summary

Monday

• Covid-19 in wastewater at highest level in 18 months (Stuff)

• Australia's top 15 most trusted brands revealed (9 News)

• Leclerc wins Monaco Grand Prix after 'monster' crash destroys Formula 1 cars (Nine)
  

Tuesday

• The Reserve Bank has changed the rules for retail bank mortgage lending. (Stuff)

• A man has been charged with sexually assaulting a 13-year-old boy north-west of Perth more than 30 years after the alleged attack. (9 News).

• Pope Francis accused of making homophobic slur in a closed-door meeting. (9 News).

Wednesday

• Deputy Prime Minister Winston Peters has taken aim at Te Pāti Māori, calling them “radical extremists” and accusing them stoking racial division. (Herald)

• North Korea has dropped at least 260 balloons carrying rubbish in the South, prompting authorities to warn its residents to stay indoors. (BBC)

• Nearly 600,000 customers were without electricity in Texas after severe thunderstorms battered the north-east of the US state. (BBC)

Thursday

• Flybuys saying goodbye after nearly three decades (Stuff)

• BHP turns inward after $75b Anglo rebuff (AFR)

• Fidelity won't levy proposed fees on purchases from boutique ETF firms, sources say (RT)

Friday

• NZ pension funds tighten property purse, as Australia widens gap (NBR)

• Donald Trump becomes America’s first felon president (AFR)

• Turmoil erupts inside OpenAI over safety fears (AFR)

Weekend

• The bosses are out. Who’s in charge with Luxon and Peters away? (Stuff)

• ASX to push higher in pivotal week for interest rates (AFR)

• Joe Biden seizes on opportunity in Trump’s guilty verdict (AFR)

Deal Flow

Investments / M&A

Australia & New Zealand

• Regis Healthcare founder poised to sell down stake (AFR)

• Potentia nabs 19.9 per cent of Vista Group; Jarden on the trade (AFR)

• Healius to sell $650m X-ray and ultrasound division after UBS review (AFR)

• Lendlease exits offshore markets to focus on local growth (RT)

• Future Fund can happily drive into the sunset with its newly acquired 19.8 per cent slice of Melbourne toll road EastLink, once coveted by ASX-listed Transurban. (AFR)

• The $2.3 billion listed gold miner Ramelius Resources has approached $1 billion Westgold Resources to discuss a merger proposal, in a deal that could be the sector’s biggest amid a recent wave of consolidation. (AFR)

• Mystery party not proceeding with Comvita offer (NBR)

• Rio Tinto has bought out Sumitomo Chemical’s 20.64% interest in New Zealand Aluminium Smelters and is now its sole trader. No purchase price was disclosed, but the mining multinational was given confidence int he long viability of Tiwai Pt after its 20-year deal with NZ’s energy generator trifecta (NBR)

Key Global

• UBS reaches milestone in Credit Suisse absorption as parent companies merge. The merger concluded was facilitated by strong support from global regulators, said UBS, whose shares have jumped about two-thirds since it snapped up Credit Suisse for 3 billion Swiss francs (US $3.3 billion) (RT)

Other Global

• ConocoPhillips is in advanced talks to acquire smaller rival Marathon Oil Corp. which would extend the oil industry’s spree of major deals, the Financial Times reported. (BBG)

• ABN Amro buys German bank Hauck & Aufhäuser from China’s Fosun. (Bloomberg)

• Nippon Steel has launched a charm offensive to win support for its planned acquisition of U.S. Steel in a bid to counter the deal’s staunchest critics. (WSJ)

VC & Fundraising

• Indian EV startup Zypp Electric secures backing to fund expansion to Southeast Asia (TC)

Equity Raises

Australia & New Zealand

• EQT smashes target with $2.4b final close for Asia fund (AFR)

• Australian Vintage shops $30m equity raise as Accolade walks (AFR)

Key Global

• Elon Musk’s AI startup, xAI, has raised $6 billion in a new funding round, it said today, as Musk shores up capital to aggressively compete with rivals including OpenAI, Microsoft, and Alphabet. (TC)

Other Global

• German perfume and cosmetics retailer Douglas, opens new tab reported a net loss in the second quarter, affected by expenses linked to its IPO, the company said on Wednesday. (RT)

Debt, Restructuring & Bankruptcy

• The Reserve Bank of New Zealand has confirmed it will apply new restrictions on mortgage lending in a bid to reduce potential financial instability risks stemming from high household debt and rising home prices. (WSJ)

• Subway has sold US $3.35 billion of asset-backed bonds to help fund its buyout by Roark Capital Group, in what is the largest securitisation of its kind on record (BBG)

• WeWork Inc. won bankruptcy court approval to shed billions in debt, drop unprofitable leases from its office workspace portfolio. The restructured company will be worth between $665 million and $865 million when it leaves Chapter 11 (BBG)

• Supreme Court dismisses Satori Holdings' liquidation appeal (NBR)

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