Spirit Airlines shares soar 46% after debt refinancing deadline extension.

LOCAL MARKET COMMENTARY

South Africa's Top 40 index and the All Share index both closed lower on Monday, declining by 0.14% to 79,046 and 87,076 points, respectively, as investors await the inflation data set to be released by Statistics South Africa on Wednesday. Analysts expect further disinflation after August's decline, which allowed the central bank to cut interest rates by 25 basis points last month, marking the first cut in four years. With inflation at its lowest since April 2021, there’s speculation of another rate cut in November. Meanwhile, Capitec’s decision to restrict transfers to crypto exchanges disappointed South Africa’s crypto community. Prosus NV aims to deliver $400 million in adjusted earnings from its e-commerce business by March, with future improvements expected.

EUROPEAN MARKET COMMENTARY

European shares closed lower on Monday following a volatile session, as investors awaited key corporate earnings reports. Despite the overall decline, the energy sector was supported by stabilizing oil prices. The STOXX index had risen in the previous two weeks, boosted by the European Central Bank’s interest rate cut on Thursday. Lithuanian central bank governor Gediminas Simkus suggested that the ECB might need to lower rates further if inflation continues to fall significantly.

US MARKET COMMENTARY

The Dow Jones Industrial Average and S&P 500 ended lower on Monday, pulling back from Friday's record highs and six consecutive weeks of gains as rising Treasury yields and concerns about high stock valuations weighed on investors. Market participants are also awaiting earnings reports from major companies. Additionally, attention is focused on the upcoming U.S. presidential election, with polls showing improving chances for Republican candidate Donald Trump. Key economic data this week includes home sales, flash PMI, durable goods reports, and the Federal Reserve's Beige Book.

ASIA MARKET COMMENTARY

Asia-Pacific markets dipped this morning, following a mixed performance on Wall Street. Economic data from Asia is expected to be light, but attention is focused on India's markets as Hyundai India prepares for its $3.3 billion IPO, the largest in the country's history. In South Korea, producer prices for September rose just 1% year-on-year, the slowest pace since November 2023. On a monthly basis, the producer price index (PPI) fell 0.2%, marking its second consecutive monthly decline.

CURRENCY MARKET COMMENTARY

South Africa's rand weakened against a stronger U.S. dollar on Monday, as investors turned their attention to upcoming local inflation data expected later this week. The U.S. dollar held near a two-and-a-half-month high this morning, as expectations grew that the Federal Reserve would take a cautious approach to future interest rate cuts.

COMMODITY MARKET COMMENTARY

Gold paused after reaching a record high on Monday, as rising U.S. Treasury yields and a stronger dollar countered the boost from uncertainties surrounding the U.S. presidential election and the Middle East conflict. Meanwhile, oil prices declined this morning, reversing the nearly 2% gain from the previous day. This drop came as U.S. diplomatic efforts pushed for a ceasefire in the Middle East and slow demand in China, the world's largest oil importer, continued to pressure the market.

South32 Limited (S32) -2.94%

In the September 2024 quarter, net debt decreased by $723 million to $39 million following the sale of Illawarra Metallurgical Coal. Working capital temporarily increased by $150 million due to inventory buildup in the aluminium sector. The company funded $63 million to support operational recovery at Australia Manganese, impacted by a cyclone, while receiving $150 million in insurance recoveries. South32 gained $32 million from its Sierra Gorda investment and expects more distributions in December. Capital spending totalled $135 million, and $47 million was paid in taxes. They expanded their capital management program by $200 million, buying back 1 million shares, with $197 million remaining for future buybacks. Lastly, a $140 million dividend was paid after the quarter ended.

4Sight Holdings Limited (4SI) +1.22%

As of 31 August 2024, the company saw strong growth, with revenue up 20.1% and operating profit rising 32.9%. Earnings per share increased by 35.4%, reaching 5.18 cents, while headline earnings per share also rose 35.5%. However, no dividend was paid during this period, compared to a 2.5 cent dividend in the previous quarter.

Spirit Airlines Inc. (SAVE) +53.06%

Shares of Spirit Airlines jumped by as much as 46% on Monday after the airline secured a two-month extension, until December 23, on its debt refinancing deadline from U.S. Bank National Association. This gives Spirit more time to address its $1.1 billion in loyalty bonds due next year, with the original deadline set for October 21. The company has fully utilized its $300 million credit facility and expects to end the year with over $1 billion in liquidity. Despite struggling to post profits in five of the last six quarters, Spirit has shifted its strategy by targeting premium travel to offset rising costs and improve earnings, moving away from its traditional ultra-low-cost model.

Nucor Corporation (NUE) -1.35%

Nucor reported a 78% drop in third-quarter profit, largely due to $123 million in impairment charges related to its steel products and raw materials businesses, causing its shares to fall 3% after hours. The company posted a profit of $250 million, or $1.05 per share, and excluding these charges, it earned $1.49 per share, slightly beating analyst estimates of $1.47. Revenue fell over 15% to $7.44 billion, due to weak prices and soft demand, though it exceeded estimates of $7.28 billion. Nucor also reported a 6% decrease in average sales price per ton compared to the second quarter, and a 15% drop from last year. Looking ahead, the company expects further declines in fourth-quarter earnings.

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