The Monday Report – 28 September 2026

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This story features HEALIUS LIMITED, and other companies.
For more info SHARE ANALYSIS: HLS
The company is included in ALL-ORDS

Overseas markets lifted on Friday as yields and oil prices eased, but the ongoing US/Iran conflict remains unresolved, and the US midterms on November 3 will increasingly come into focus.

Back home, it was another disappointing week for domestic investors, ahead of tomorrow's RBA meeting, when it is widely anticipated the cash rate will be hiked by another 25bps.

Good Morning,

The ASX200 slipped -37 points, or -0.43%, to 8665 on Friday, down -0.76% for the week and -4.5% for the month-to-date, with three trading days left.

September has once again confirmed its reputation for equity investors.

While Australian investors bemoan the state of the domestic market, the US S&P500 Equal Weight Index (RSP) is down -4% for the period from August 8 to the week ending September 20, with weakness most pronounced in the more interest rate-sensitive sectors.

Over the same period in the US, the IWM –iShares Russell 2000 ETF, which tracks US small caps– was down -6%, while XLU –the Utilities Select Sector SPDR Fund, which tracks the utilities sector of the S&P 500– was down -7%.

Thus far in September, ASX-listed Utilities are down -5.1%, with the worst-hit local sectors being InfoTech, down -13.70% (the sell-off is in SaaS stocks, again), and Materials, down -7.56%.

For more details and to stay in touch with which companies are reporting 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

Oil Is Steering the Bond Market 

The 10-year yield touched 5.23% this morning, then backed off as US-Iran talks on reopening the Strait of Hormuz reportedly moved forward. US crude fell to about US$92 a barrel, and yields followed it down.

WSJ columnist James Mackintosh says yields are tracking oil more closely than ever.

Right now, a Hormuz headline is a rate headline.

Gas Prices Are Wearing on Consumers 

University of Michigan consumer sentiment fell to 48.1 in September, a four-month low.

Gas above US$4 a gallon for more than two months, plus tariff worries, is weighing on people.

Year-ahead inflation expectations hit their highest since June, and the Fed watches that number closely.

Traders now see about a two-in-three chance of an October rate hike.

Trump and Xi Buy Two More Months

Xi’s three-day visit was mostly ceremony, but the trade truce now runs to Jan. 10.

That keeps US tariffs lower and China’s rare earth export limits on hold.

Many expected six months, and China experts told CNBC the shorter clock gives the US a bit more leverage.

With rates this high, boring is good.

ANZ Bank Morning Report extract

On Friday night, bond yields generally eased and equity markets were stronger. The S&P500 closed 0.5% higher, while the Dow was up 0.9%. The EuroStoxx50 was up 0.5%, and theFTSE100 was up 0.1%.

The yield on the US 10y Treasury note eased -1.54bp to 5.16%. Oil prices fell on more conciliatory headlines, with WTI for near-term delivery down -0.4% to US$92.4/bbl. Gold rose 0.4% to US$4,284.8/oz.

US: University of Michigan consumer sentiment lifted from 47.8 to 48.1 in September, beating expectations for a small fall. The current conditions index was unchanged at 50.9, while expectations lifted from 45.8 to 46.3.

Inflation expectations were unchanged at both the one-year horizon (4.6%) and five to ten years out (3.4%). Durable goods orders were flat, beating expectations of a 0.3% fall.

Global bond yields eased on Friday night, led lower by oil prices amid cautious optimism about US-Iran negotiations to reopen the Strait of Hormuz (although that optimism may not survive into today’s session after Trump said over the weekend that he had rejected a deal proposed by Iran).

In the bigger picture, yields have risen sharply across a wide range of countries.

Japan’s 10y yields are the highest in 30 years, while in many other countries they are the highest in nearly 20 years.

How concerned should observers be?

It’s true that fiscal deficits are high in many countries, not least the US, but high inflation has been helpfully nibbling away at debt burdens expressed as a proportion of nominal GDP. Term premiums appear fairly stable.

As for the inflation outlook, market measures of inflation expectations are generally benign, although survey-based measures are more mixed, and the cost of living remains a highly political issue in many countries.

Prices for both crude oil and refined products are very high, but futures continue to suggest that markets expect a degree of normalisation.

It is also true that some of the sudden increase in near-term policy rate expectations has been because of better economic data than expected, particularly in the US, not just because of the energy cost shock.

In short, the move has been dramatic, but the jury is still out on what it signifies and where to from here

CBA Economics – The Week Ahead, Lucinda Jerogin extract

• We changed our RBA call this week and now expect the Monetary Policy Board to hike the cash rate 25bps to 4.60% on Tuesday.
• RBA communication maintained a broadly hawkish tone, albeit with a slightly more dovish stance from MPB member Iain Ross.
• August labour market data pointed to a continued gradual loosening in conditions. The unemployment rate rose to 4.6% in seasonally adjusted and trend terms, driven mainly by higher participation amid cost-of-living pressures. Employment growth and other indicators remain solid.
• Our CommBank HSI eased to 0.1% growth in August, taking the annual rate down to 4.7% from 5.2%. While spending indicators have been choppy in recent months, CBA data suggests there has been a broad-based slowdown in spending when compared to the strong growth rates seen in late 2025.
• Offshore, renewed hopes of diplomatic efforts to end the war in Iran eased pressure on oil prices. However, reported attacks on Saudi Arabia overnight revived doubts about a quick resolution.
• President Trump and President Xi met in Washington for the second summit this year. The US-China trade truce was extended by two months to 10 January.
• The week ahead is jam-packed locally. The RBA will take centre stage to begin the week, where we expect a unanimous 25bp rate hike. Inflation data will follow, with the August Consumer Price Index released on Wednesday. We expect annual trimmed mean inflation to remain unchanged at 3.6%. Headline inflation is expected to lift from 3.5% to 4.0%. Building approvals, ABS MHSI, job vacancies, private sector credit, goods trade balance and home prices data are also due.
• Abroad, US PCE inflation and non-farm payrolls will be in focus. Elsewhere, eurozone CPI and Canadian GDP figures are scheduled.

Washington Strategy: Diesel’s Midterm Math, Helima Croft, RBC Capital Extract

With midterms now less than 40 days away, a ban on US diesel exports has become a hotly debated policy option, with no clear solution to the global refinery shortfalls amidst the twin wars involving the world’s largest energy producers.

Retail diesel has risen by around 70%, and gasoline by 50% nationally since the start of the Iran conflict. Faced with increasingly negative polling data, several leading Senate Republicans have publicly called for a diesel export ban, and the President himself signaled an openness to implementing such restrictions.

On Tuesday, he stated “I’ve said let’s not send ?out the diesel. ?We make a lot of diesel […].” And yet, the fact that Energy Secretary Chris Wright publicly called the ban a bad idea shows that this is not a settled issue even if the odds of restrictions have risen in recent weeks.

The actual form export restrictions could take could still fall short of a blanket ban, and could include select waivers, be limited in duration, and/or be tied to certain benchmarks.

During the early months of the Ukraine war, some Biden administration officials had been proponents of product export restrictions tied to inventory levels, and this may be a potential policy roadmap for some members of the Trump administration.

We also know that President Trump has passed on other policy options to lower product prices such as a proposal by the refinery industry to scale back implementation of the renewable fuel standards, reportedly due to strong opposition from the agricultural lobby.

In the end, we think that the midterm election math will be a key calculus, and that White House Deputy Chief of Staff for Policy, Stephen Miller, could be a deciding voice on whether to hit the go switch on a diesel ban.

We believe that export restrictions will likely be implemented if the White House political team conclude that they could help move the needle in key toss-up congressional races and help retain Republican control of the Senate.

We think the Iowa Senate race could be especially closely scrutinized, with Republican Ashley Hinson in a tight race against Democrat Josh Turek, and Senator Chuck Grassley being one of the leading Senate voices for a diesel ban.

Conversely, the White House will probably pass on export restrictions if the political team decides that such measures will be immaterial to midterm outcomes or potentially make retail gasoline prices higher due to broad-based US refinery run cuts.

Above all, we think domestic considerations will trump international fallout concerns in the White House’s diesel ban discussion.

What Jefferies’ S&P500 9,000 Target Actually Assumes, Lance Roberts, Bull/Bear report extract 

Jefferies’ S&P500 price target of 9,000 certainly is encouraging, until you strip away the headlines and focus on the math.

Price equals earnings times whatever investors will pay for those earnings. Jefferies spells out its math plainly: US$450 in 2027 earnings per share at 20x. That assumes 20.8% earnings growth next year, on top of a 2026 estimate of US$373 that already sits above the Street.

Its bear case is 6,900, and its bull case is 10,500.

However, this is where it gets interesting. Consensus 2027 earnings currently sit at US$419.53, up 10% from roughly US$381 in May. At Tuesday’s close, the market trades at about 18.5 times that number.

Getting to 9,000 requires either a 16% expansion in the multiple or another 7% of upward revisions on top of the ones we’ve already had.

Neither is impossible. Both require the current trend in estimates to keep running, and that’s the assumption worth testing.

The Drivers Are Real, And They’re Breaking A 90-Year Trend

Let me be clear about this: the bulls have the data on their side right now. According to FactSet, analysts expect S&P500 earnings to grow 31.8% this year and 15.2% in 2027, on revenue growth of 9.1%.

Net margins hit 17.0% in the second quarter, the highest since FactSet began tracking in 2009. Jefferies estimates that AI-exposed companies account for about 46% of index earnings, with growth of 60% this year slowing to 24% next year. Goldman puts AI infrastructure at roughly half of all S&P500 earnings growth across 2026 and 2027.

The more unusual part is the direction of the revisions. Wall Street almost always starts a year too optimistically and spends the next 24 months cutting. Goldman’s chart of global earnings estimates clearly shows that.

From 2016 through 2025, the final number landed below the first estimate in eight of ten years, and the other two were roughly flat. The 2026 and 2027 estimates are doing the opposite, running up roughly 17% and 27% from where they started.

Such is the fuel behind every 9,000 target on the Street. It’s also the thing that has historically reversed with the least warning.

That push higher matters because of where earnings already sit. Two weeks ago, we showed that corporate earnings had broken above a trend that had contained them for more than 90 years.

The S&P500 also pushed above the upper limit of its long-term price channel, a level last reached in early 2000.

Our work on earnings mean reversion put forward estimates close to 50% above their long-term growth trend. Jefferies’ US$450 takes that gap to roughly 60%, and every upward revision widens a gap that has historically closed on the earnings side.

Here’s What Could Undercut The Outlook

Someone will tell you the analysts have been right all year, so why fight them? That’s a reasonable point. The issue is NOT whether earnings grow in 2027. They almost certainly will. The issue is whether they grow 15.2% while the market is already priced for it.

The 9,000 forecast needs margins to hold near a record, and records are where margins tend to mean-revert.

Another risk is how the AI buildout is being paid for. FactSet tracks hyperscaler capex near US$800 billion this year, with free cash flow at or below zero for every major spender except Alphabet and Microsoft. Borrowing has risen from 9% of capex to 32%.

As we discussed in AI Capex Depreciation Risk Is The Catch To Record Earnings, those servers are being depreciated over 5 to 6 years.

The Fed Isn’t Coming To The Rescue This Time

Over the last fifteen years, investors learned that the Fed would cut if earnings stumbled. That reflex is gone. The FOMC raised rates by a quarter point to a target range of 3.75%-4.00% on September 16, and the vote was unanimous. Chair Kevin Warsh said the move “will deliver a timelier return to our target.”

The median dot now sits at 4.1% for both 2026 and 2027. In other words, one more hike this year and no cuts until 2028. The Summary of Economic Projections has core PCE inflation at 3.4% this year.

Rates are the other half of the valuation equation. The 10-year Treasury closed at 5.11% on Wednesday, the highest since 2007. The speed matters as much as the level.

Goldman notes that stocks tend to struggle once the 10-year moves by about 30 basis points in two weeks or 50 basis points in a month. It’s up 28 since September 9 and 37 since August 21.

The Russell2000, where rates bite first, fell -1.8% on Wednesday.

What Should Investors Do Now

None of this makes me bearish on the next few months. The trend is bullish, the index sits within a fraction of its record, and earnings momentum is positive. Fighting that tape has been a losing trade all year.

What bothers me is how little room for error the S&P500’s 9,000 target leaves. It needs estimates to keep rising, margins to stay at records, AI spending to keep paying off, and rates to stop climbing, all at the same time.

That’s a lot of things that have to go right for another 15.9%, against a downside of -6% to -14% if only one or two of them go wrong.

Markets rarely punish investors for missing the last 15% of a bull market. They punish investors who needed that 15% to be there.

Corporate news in Australia:

• Healius ((HLS)) expects $155m in cash proceeds from the sale of Agilex Biolabs to TPG-controlled Novotech, sharpening its focus on its core pathology business
• La Caisse has hired Macquarie Capital ((MQG)) to sell its more than 10% stake in WestConnex, potentially triggering a major infrastructure ownership change and putting the spotlight on Transurban ((TCL))
• Warburg Pincus has submitted a third, higher takeover proposal for Ingenia Communities ((INA)) after the board rejected its previous $5.05 per share offer
• Dexus ((DXS)) has revived talks to acquire the $2bn Campus Living Villages student accommodation business
• Blackmagic co-founder Peter Barber reportedly sought to sell his stake at a valuation of around $1.5bn, but co-founder Grant Petty allegedly opposed bringing in another investor
• Westview Group is seeking Asian and North American equity partners and debt funding for its proposed $1bn Queensland steel plant
• RedEarth Energy Storage has entered voluntary administration after financial difficulties and rising Chinese imports derailed its planned ASX listing
• Firmus is preparing for its October 6 IPO bookbuild as bankers sound out investors ahead of the proposed $7bn float
• Cadence Asset Management has decided not to participate in the anticipated Firmus ASX IPO
• Colonial First State is avoiding Australian private credit amid concerns about exposure to property development following the Bathla collapse
• Brett Blundy-backed Dissh increased sales by more than 20% as it expanded its store network and targets further US growth
• Members of the Tzaneros family have reportedly borrowed $30m against their Point Piper property while ACFS remains in administration

On the calendar today:

-JP Aug PPI services

-CH Aug Industrial profits

-ARISTOCRAT LEISURE LIMITED ((ALL)) Global Gaming expo

-DEVELOP GLOBAL LIMITED ((DVP)) FY26 earnings report

-LINDSAY AUSTRALIA LIMITED ((LAU)) ex-div 1.70c (100%)

-NUFARM LIMITED ((NUF)) investor briefing

-PANTORO GOLD LIMITED ((PNR)) FY26 earnings report

-SHINE JUSTICE LIMITED ((SHJ)) ex-div 2.50c (100%)

-VIVA LEISURE LIMITED ((VVA)) ex-div 3.00c (100%)

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

The Australian share market over the past thirty days…

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