The Monday Report – 07 September 2026

Array
(
    [0] => Array
        (
            [0] => ((SMR))
            [1] => ((PWR))
            [2] => ((PAC))
            [3] => ((HLS))
            [4] => ((ADH))
            [5] => ((ALK))
            [6] => ((BCC))
            [7] => ((EGG))
            [8] => ((HUB))
            [9] => ((MHJ))
            [10] => ((PME))
            [11] => ((PRU))
            [12] => ((SUL))
            [13] => ((WTL))
        )

    [1] => Array
        (
            [0] => SMR
            [1] => PWR
            [2] => PAC
            [3] => HLS
            [4] => ADH
            [5] => ALK
            [6] => BCC
            [7] => EGG
            [8] => HUB
            [9] => MHJ
            [10] => PME
            [11] => PRU
            [12] => SUL
            [13] => WTL
        )

)

This story features STANMORE RESOURCES LIMITED, and other companies.
For more info SHARE ANALYSIS: SMR
The company is included in ASX300 and ALL-ORDS

US markets were weaker going into the Labor Day long weekend, with a stronger-than-expected jobs report lifting bond yields.

The US and Iran have been conducting new military strikes over the weekend, which are likely to unsettle trading in Australia and Asia.

Prior to the attacks, ASX200 futures were indicating a flat start. US markets are closed on Monday.

Good Morning,

On Friday, the ASX200 dipped 14.20 points to -0.16% to 9,005.90.

The ASX200 finished 86 points (-0.95%) lower last week at 9005 for its third week of losses in the past four.

InfoTech was the worst performing sector down -6%, followed by Materials, down -4.%, Consumer Discretionary, down -1.7% and Utilities, down -1.2%.

Financials rallied 2.1%, with Health Care up 0.8%, Consumer Staples, up 0.5% and Telcos up 0.3%.

To stay in touch with which companies are going ex-dividend, check out the FNArena Calendar https://fnarena.com/index.php/financial-news/calendar/

Today’s Big Picture, J.L. Bernstein extract

Hiring came in hot and the Fed lost its easy excuse

Employers added 162,000 jobs in August, roughly triple what economists expected.

June and July were both revised up, and July flipped from losses to gains.

Six month hiring is now running at its best pace in more than two years.

The strongest argument against raising rates was a soft job market, and that argument is gone.

Diesel set a record and that bill lands everywhere

Diesel reached US$5.85 a gallon nationwide, past the 2022 peak, with California at US$7.70. A year ago it was US$3.71.

Two supply shocks are stacked on each other. The war has choked fuel out of the Strait of Hormuz, and Russia extended its diesel export ban through September after drone strikes on its refineries.

Trucking, farming and construction pay it first, then it moves into the price of everything they haul and build.

The AI buildout is running on borrowed money still

S&P Global went through the credit side of the data center boom and found spending climbing faster than they expected, every time they look.

Financing is getting more complicated and harder to see through, and the returns are years out.

Credit quality at the companies borrowing to build is slipping.

That same buildout is adding construction jobs and widening the trade gap, so it is carrying a lot of this economy right now.

ANZ Bank, Australian Morning Focus

Equity markets were mixed on the firmer-than-expected August labour market report. The S&P500 closed 0.4% lower, the Euro Stoxx50 was up 0.2% and the FTSE100 was unchanged.

The yield on the US 10y Treasury note rose 1bp to 4.78%. Oil prices were little changed, with WTI up 0.2% to US$91.5/bbl. Gold rose 0.1% to US$4,430/oz.

US labour data: August non farm payrolls rose 162k, while July was revised up to up 21k from down -23k. Within the overall number, there was a 42k bounce-back in local government education.

There have been some seasonal adjustment problems with that data, which help explain the volatility in that cohort. Jobs at food services and drinking places rose 59k, above the average monthly trend of 12k in the prior 12 months.

The unemployment rate was steady at 4.1%. Average hourly earnings eased to 3.1% y/y, their lowest level since before the pandemic. There is no inflation coming from the labour market.

Trump leans on the Fed: Following the payrolls report, Trump renewed his calls for lower interest rates, saying the FOMC should “get smart” and “be patriots for a change”.

He argued that high interest rates put the US at a very unfair disadvantage, and he won’t allow that to happen. He argued the US should have rates closer to 1% or 0.5%, while threatening trade action against countries with which the US runs a deficit if rates are not lowered.

Hassett said there is a strong case for holding rates at the next meeting, but also that he had spoken with Trump, who was not giving the Fed advice, and reiterated that they respect the Fed’s independence.

US Fed policy: The Fed has entered its blackout period ahead of the September FOMC meeting. Market pricing is poised on whether the Fed will tighten.

Last week, senior FOMC officials pushed back against hawkish market pricing that increasingly saw September as a done deal for a rate hike. Governors Waller and Barr and FOMC Vice Chair Williams all noted an improvement in recent inflation data and indicated a bias towards holding rates steady if the August inflation data corroborate the improvement in recent months.

However, officials have also made clear that a renewed rise in inflation would likely require further tightening. The current consensus is that core CPI will rise 0.2% m/m in August.

US Market Call: More Fabulous Earnings Momentum, Ed Yardeni & Toby Hearst, Yardeni Quicktakes, extract

The Fed might or might not raise the federal funds rate this month. The war in the Middle East may or may not be over (and isn’t even a war anymore, says VP JD Vance).

A debt crisis may be imminent, or not. The Republicans will probably lose the House in the midterms, or maybe not. Putin may or may not invade NATO. Trump might embargo US trade with countries with a trade surplus with the US, or whatever.

Meanwhile, there’s no doubt that corporate earnings are soaring. Fabulous Earnings Momentum (FEMO) is driving the market higher despite all the uncertainties listed above.

I. Earnings: During Q2, S&P500 earnings per share rose a whopping 50.7%, up from 19.0% during Q1. Analysts now project 23.6% for Q3 and 27.9% for Q4.

Q2 includes the mark-to-market (MTM) gains we have flagged for several weeks. Without them, the Q2 gain was about 25%. The back-half earnings estimates exclude MTM gains, and the Q3 and Q4 estimates are still rising.

Forward earnings rose to a record US$401.75 per share last week. It is converging towards the year-end consensus estimate for 2027, which just jumped to US$418.76, exceeding the US$415.00 we set as our year-end target for both series.

We are sticking with our 8,400 S&P500 year-end target for now. We might have to raise our S&P500 target, which is the highest on the Street, if the 2027 estimate continues to rise!

S&P500 forward revenues per share are at a record high. This suggests that the global economy is performing well, since roughly 40% of S&P500 revenues come from abroad.

Rising revenues and even faster-rising earnings mean widening profit margins. The forward profit margin is 16.6%, and the 2027 consensus margin is 16.8%. Both continue to hit record highs.

The strength in earnings is broad-based. Some 88.3% of S&P500 companies currently have positive 12-month changes in forward revenues, and 85.9% have positive changes in forward earnings.

It is not just a LargeCap story, either. Forward earnings for the S&P500, S&P400, and S&P600 are all rising to record highs together.

II. Valuation While earnings are soaring, valuation multiples are contracting. The S&P500 forward P/E is 19.2, with the S&P400 at 15.8 and the S&P600 at 15.1. All three are down in recent weeks. FEMO isn’t being matched by fear of missing out (FOMO). As a result, investors are getting more earnings per dollar than they were at the start of the year.

The PEG ratio tells the same story. It has fallen to 0.75, the lowest reading in its 30-year history. Investors are sceptical of industry analysts’ heady earnings expectations.

Compare that with 1999. Then, investors bid multiples to extremes that long-term earnings growth (LTEG) expectations never justified. Now the reverse holds. Analysts’ LTEG estimate is 26.0%, while the forward P/E has declined so far this year.

Analysts are exuberant. Investors are not.

III. Performance:  The Magnificent-7 had a good week, with the MAGS ETF up 1.3% while the S&P500 Ex-Magnificent-7 ETF fell -0.7%. The year still belongs to the Impressive 493. XMAGS is up 15.2% ytd against 12.8% for the S&P500 and 5.3% for MAGS.

The bull market has broadened as we expected.

IV. Bonds : The 10-year Treasury yield is 4.77% and has been trending higher since the spring. It remains inside the 4.00%-5.00% “old normal” range we have argued is the right one for this business cycle.

The yield is now pressing against its January 2025 high of 4.81%. A move above that would likely test 5.00%. We would view that level as attractive rather than alarming.

September Market Weakness: The Setup Has Teeth, Lance Roberts, The Bull/Bear report extract

So, what does that mean for investors heading into a holiday-shortened trading week?

As noted above, Friday’s close of 7,718.60 leaves the S&P500 roughly -1% below its record of 7,796 and still comfortably inside its bullish uptrend.

The market consolidation this past week certainly weighs on investor sentiment, but the index remains 1.8% above its rising 50-day moving average at 7,585 and 8.2% above its 200-day at 7,137.

What does that mean?

Well, on the surface, nothing is broken, but underneath, the momentum picture is turning. Furthermore, the risk/reward isn’t compelling.

From a purely technical perspective, let’s start with the primary oscillators. The 14-day RSI reads 55.7, squarely neutral, but that reading has cooled from the high-50s. However, that leaves the index with no oversold cushion. With that said, there is downside risk into next week.

Furthermore, the bigger tell is the MACD, which rolled over and crossed below its signal line this week, the first real momentum warning the daily chart has flashed since the summer advance began. Neither signal is a sell trigger on its own. However, together they say the easy upside is likely behind us for now.

Lastly, overall market breadth tells the same story, but with a bit louder voice. Seven of eleven sectors fell in the last week, while the index finished flat. Discretionary, industrials, and materials led the retreat, while a narrow band of energy and megacap technology held the line.

In other words, while the market headline suggested everything was fine, the average stock did worse. That is the “musical chairs” tape we will dig into in detail in this week’s main story.

Leadership is rotating rather than broadening, and that is exactly the kind of internal deterioration that tends to precede a real pullback.

Heading into next week, the support and resistance levels are evident.

The first resistance is the record at 7,796, about 1% away. Just above that are the round numbers at 7,900 and 8,000. (Those are our year-end targets that sit just above previous all-time highs.)

Conversely, support starts at the 50-day near 7,585. That level also marks the breakout that a failed retest would expose. Just below that level is the 7,300 zone, then the 200-day at 7,137, the same downside band the seasonal math points towards.

With that setup going into next week, we will want to continue playing defence rather than offence.

Secondly, investors should consider increasing cash buffers and keeping stops under the 50-day. Lastly, use any push towards the record market levels to trim rather than chase.

To be fair to the bullish camp, a decisive close back above 7,796 would neutralise the momentum warning and reopen those round-number targets.

There are several risks ahead, from the midterm election cycle to the loss of corporate buybacks, so this is a two-sided setup rather than a directional call.

However, pay close attention to 7,585 next week. If the market can hold that level, the uptrend will remain intact. If it fails, the seasonal downside risk increases.

Corporate news in Australia:

• Stanmore Resources ((SMR)) has agreed to acquire Exxaro’s Moranbah South coal assets in Queensland for US$105m
• Peter Warren Automotive Holdings ((PWR)) has received ACCC approval for its acquisition of Wakeling Automotive after agreeing to divest eight dealership sites to address competition concerns
• Private equity firms are preparing bids for Pickles in a sale process expected to value the auction and vehicle services group at more than $1.5bn, after Ritchie Bros exited the auction
• Bain Capital is preparing a $1bn-plus bid for Blackstone-owned clinical trials business Nucleus Network
• Continental is preparing to select the winning bidder for Australian automotive services chain mycar after receiving final offers
• Roc Partners has emerged as a rival bidder for Pacific Current Group ((PAC)), challenging the board over its handling of River Capital’s competing takeover proposal
• EQT has bid for Sydney-based data centre supplier Parratech at a valuation above $1bn, with other potential buyers remaining in the sale process
• Bankers are sounding out potential buyers for the $1bn-plus Viscount Pooling business, despite owner Raphael Geminder maintaining the company is not for sale
• Country Road Group is facing renewed $1bn-plus sale speculation as South African parent Woolworths Holdings undertakes a strategic review of its portfolio
• Private equity firms are again circling Healius ((HLS)), with the pathology group’s depressed $330m market valuation attracting takeover interest
• Fashion group Aje is testing interest from private equity and family offices in a stake sale to help fund its international expansion
• Canva is stepping up preparations for a potential US IPO in 2027, expanding its public markets and investor relations capabilities

On the calendar today:

-AU Aug ANZ job ads

-EZ 2Q GDP (third estimate)

-US Public Holiday

-GE July Industrial prod’n

-ADAIRS LIMITED ((ADH)) ex-div 6.00c (100%)

-ALKANE RESOURCES LIMITED ((ALK)) ex-div 2.00c

-BEAM COMMUNICATIONS HOLDINGS LIMITED ((BCC)) ex-div 1.40c

-ENERO GROUP LIMITED ((EGG)) ex-div 1.40c (100%)

-HUB24 LIMITED ((HUB)) ex-div 42.00c (100%)

-MICHAEL HILL INTERNATIONAL LIMITED ((MHJ)) ex-div 2.00c (50%)

-PRO MEDICUS LIMITED ((PME)) ex-div 37.00c (100%)

-PERSEUS MINING LIMITED ((PRU)) ex-div 9.00c

-SUPER RETAIL GROUP LIMITED ((SUL)) ex-div 33.00c (100%)

-WT FINANCIAL GROUP LIMITED ((WTL)) ex-div 0.75c (100%)

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms