Daily Market Reports | 8:51 AM
This story features LENDLEASE GROUP, and other companies.
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The company is included in ASX200, ASX300 and ALL-ORDS
Despite a seemingly better-than-expected PCE print, US markets, ex-Tech, drifted lower, delivering a largely flat monthly performance for the S&P500.
US Treasury yields remain elevated and that seems to be on everyone's mind right now.
The Australian market rallied on better-than-expected (underlying) August CPI but ended the month with a loss nevertheless.
ASX200 futures are pointing to a weak start for the month of October.
| World Overnight | |||
| SPI Overnight | 8765.00 | – 48.00 | – 0.54% |
| S&P ASX 200 | 8789.30 | + 80.00 | 0.92% |
| S&P500 | 7651.54 | – 19.30 | – 0.25% |
| Nasdaq Comp | 26861.06 | + 63.52 | 0.24% |
| DJIA | 50906.05 | – 443.87 | – 0.86% |
| S&P500 VIX | 16.34 | + 0.30 | 1.87% |
| US 10-year yield | 5.29 | + 0.04 | 0.72% |
| USD Index | 101.47 | + 0.08 | 0.08% |
| FTSE100 | 10606.00 | – 30.71 | – 0.29% |
| DAX30 | 25199.19 | – 200.02 | – 0.79% |
Good Morning,
The ASX200 rose 80 points, or 0.92%, on the final day of trade in September to 8789.30, ending the month with a retreat of -3.16%.
REITs and Telecoms did the heavy lifting in yesterday’s session, up 3.6% and 1.94%, respectively.
The August CPI print led to the local bond market lowering the chance of a November rate hike to just 25% from 50%. The market continues to price in another hike, but the next move has been pushed out to February.
Not everyone agrees with the market’s assessment, however, see also ANZ Bank’s commentary further below.
Institutions were seemingly back in the market on Thursday, using some of their cash pile to ‘bag some bargains’. Lendlease ((LLC)) shares bounced off a 40-year low.
The S&P500 eked out a 0.2% gain for September, with the Nasdaq up 2.4%, while the Dow Jones lost -3.7%.
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/
Australian Retail Inflation, Michael Toner, RBC Capital extract
Our view: August 2026 inflation was up 4.0% y/y. Automotive fuel gapped up 13.5%, the largest y/y increase since April 2026.
International demand impacts continue to drive red meat inflation of up 9.4% for both beef & veal, and lamb & goat, down from up 12.6% for beef & veal and up 14.3% for lamb & goat y/y in July 2026.
Milk also remains elevated at up 7.7%. Poultry remains inflationary, up 0.5%, down from -1.4% in July and up 2.0% in June.
Our grocery basket index shows for the latest 5 weeks to Sep 16 2026 that ALDI has averaged around -50bps y/y shelf price deflation while Coles Group ((COL)) and Woolworths Group ((WOW)) have inflated by 0.5% and 1.6% y/y inflation respectively.
Takeaway food inflation of 3.8% continues to outstrip the broader food and non-alcoholic beverages category of 3.0%, driven by elevated wage and ingredient costs.
The reduced PBS co-payment from January 2026 continues to support lower prices for pharmaceutical products (down -1.3% y/y).
For electronics, RAM shortages have driven around 20% to 30% and circa 15% to 20% inflation for laptops and tablets since June 2026 per our electronics price tracker.
Supplier feedback suggests prices continue to rise before plateauing in 1HCY27 and subsequently falling into the end of 2027.
Today’s Big Picture, J.L. Bernstein extract
Inflation Cools and October Hike Odds Fall
Core PCE came in below forecasts for August, and even under Fed Chair Kevin Warsh’s own estimate.
Traders now see about a one in three chance of a hike at the Oct. 28 meeting.
A week ago, those odds were better than two in three.
A technical tweak by the government helped pull the number down, so call it progress with a small asterisk.
The Economy Is Running Hotter Than We Thought
The government revised second-quarter growth well above its prior estimate.
August consumer spending grew at its fastest pace in more than a year.
Private employers added 90,000 jobs in September, beating forecasts and more than doubling August’s 36,000.
That strength is why long-term bond yields barely budged on the good inflation news.
Oil Stays Pricey as Gulf Exports Recover
Gulf oil exports are back to prewar levels, according to Goldman Sachs.
U.S. crude still rose above $91 today on worries about thin stockpiles and a wider Iran war.
Goldman expects prices to ease by year-end.
I hope they’re right, because higher oil is the fastest way to undo today’s good inflation news.
ANZ Bank, Australian Morning Focus extract
US equity markets were mixed, while yield curves steepened, as softer-than-expected US inflation data reduced expectations for rate hikes from the Fed in the near term, while long-end yields continued to rise.
The S&P500 was down -0.25%, the Dow Jones was down -0.86% and the Nasdaq was up 0.24%. The EuroStoxx50 fell -0.8%, and the FTSE100 fell -0.3%.
The yield on the UST 10y note rose 6.1bp to 5.29%. The active WTI future rose 1% to US$90.36/bbl. Gold fell -0.5% to USD4,159/oz.
The US core PCE price index rose 0.2% m/m in August, below the market consensus of 0.3% m/m. The annual rate was unchanged at 3.0% from July, but the BEA’s annual revisions saw this revised -0.3ppt lower. Real personal spending rose 0.6% m/m in August, the strongest monthly growth since March 2025. Personal income rose 0.2% m/m.
US Q2 GDP was revised 0.7ppt higher to 2.2% saar. The revisions were concentrated in personal consumption, which rose 3.8% saar, and private investment, which rose 4.6%. The upward revisions underscore the US economy’s resilience.
Australia’s inflation points to another hike: Trimmed mean inflation came in slightly lower than expected in August, printing at 0.2% m/m (0.24% to two decimal places). However, when we examine the detail of the release and the likely outcomes for September, the August CPI is consistent with our existing forecast for Q3 trimmed mean inflation to come in at 1.0% q/q.
The risks around that forecast are balanced.
We’d view such a quarterly number as being a material upside surprise relative to the forecasts in the RBA’s August Statement on Monetary Policy. So we still think another rate hike at the November meeting, taking the cash rate to 4.85%, is more likely than not.
Governor Bullock did say in the press conference following the September meeting that the Q3 data would only tell them about the past, and that any further tightening would be about the future.
However, the sort of upside surprise on inflation we expect, combined with higher energy prices, would likely necessitate an upward revision to the RBA’s inflation forecasts, which would need to be offset by another hike.
Softer reading on Fed’s key inflation gauge wont’t stop another hike, Nigel Green, deVere Group extract
A softer-than-expected inflation reading won’t stop the Federal Reserve raising rates again before the year is out.
The personal consumption expenditures price index, the Fed’s preferred inflation gauge, shows prices up 3.4% over the past year, still well above the central bank’s 2% target.
Core prices, which strip out food and energy, rose 0.2% in August, taking the annual rate to 3%. Both came in below forecasts, but they arrived alongside sweeping changes to how the Bureau of Economic Analysis calculates the index.
Anyone treating today’s numbers as a green light for the Fed to stand down is, we expect, going to be making a big mistake. Headline inflation at 3.4% is still miles above target, and a good chunk of the drop in core comes from statisticians changing their sums.
After September’s hike, we said it wouldn’t be the last one this year, and we’re sticking with that call.
The BEA has revised its methods back to 2021 for items including legal services, software and portfolio management fees. Economists had expected the changes alone to shave two or three tenths of a percentage point off annual inflation.
Recalculating legal fees and software prices does nothing for the cost of filling up a lorry or paying the mortgage.
The Fed knows the difference between a softer number and softer inflation, and it sets policy on the second.
The Fed lifted its target range to 3.75% to 4% on September 16, its first hike in three years, and the vast majority of policymakers pencilled in at least one more increase before the end of 2026. Today’s figures are the last PCE reading officials will see before they meet on October 28.
The Fed’s own messaging leaves little room for a pause. Kevin Warsh told Jackson Hole the 2% target is firm and fixed, and he’s been clear the Fed looks at trends and ignores isolated data points.
One cooler month, measured using new methods, doesn’t make a trend. Six-month PCE inflation was running above 4% annualised when he spoke. A single softer print leaves that picture largely intact.
Energy is still pouring fuel on the fire. The conflict involving Iran has kept pressure on oil, and diesel now averages more than US$6.50 a gallon, up around 75% in a year.
Energy costs seep into everything, from food on the shelves to the cost of moving goods around the country. Those costs haven’t fully worked their way into prices yet, and the next few months could look a lot less friendly.
Borrowing costs are already biting. The average 30-year fixed mortgage rate has pushed above 7%, its highest since January 2025, while the 10-year Treasury yield has broken through 5%.
Markets may well scale back their bets on an October hike after today. Anyone taking this as the all-clear could get caught out by December.
Borrowers on variable rates, or facing a remortgage in the next 12 months, should be asking how they’d cope if rates rose again. Long-dated bonds are exposed too, and investors carrying a lot of duration face a serious question about whether their portfolios can absorb another move.
Corporate news in Australia:
- SkyCity Entertainment ((SKC)) has hired UBS to advise on ongoing takeover discussions after rejecting two unsolicited approaches last month, while preparing a formal sale process for its Adelaide casino
- APA Group ((APA)) has completed the acquisition of an 80% interest in CS Energy’s $1.3bn Brigalow peaking power project, committing around $1.02bn
- IFM Investors is undertaking early due diligence with Macquarie Capital ((MQG)) on a potential bid for Rio Tinto’s ((RIO)) circa-US$7bn mine-supporting power infrastructure portfolio
- Private equity veterans Chris Hadley and Clark Perkins, founders of Quadrant and Mercury respectively, have jointly acquired a 10% stake in dog food company Lyka
- Kelsian Group ((KLS)) has completed the $149.9m sale of its tourism portfolio to Journey Beyond, reducing debt and sharpening its focus on core transport operations
- Adamantem Capital is seeking investment bank advisers ahead of a planned sale of national cardiology provider Advara HeartCare
- Metrics Master Income Trust ((MXT)) and Metrics Income Opportunities Trust ((MOT)) remain under scrutiny after KPMG delayed the release of audited financial reports, with S&P placing four Metrics funds on CreditWatch and redemptions and distribution reinvestment plans suspended
- Firmus has appointed four joint lead managers for its planned $7.2bn ASX IPO, potentially generating around $215m in adviser fees
- InfraBuild has appointed Jefferies Australia to launch a formal refinancing process for around $750m of existing bonds
- Plato Investment Management ((PNI)) is reportedly preparing to short Firmus following its ASX listing
- AustralianSuper, Australian Retirement Trust and UniSuper reportedly have around $3bn invested in a gated Partners Group fund amid liquidity concerns
- Meta Platforms has secured priority rights over a significant portion of Firmus’ planned AI factory capacity, strengthening the data centre operator’s upcoming IPO proposition
On the calendar today:
-NZ Aug Bldg permits
-AU Aug Trade Bal
-JP 3Q Tankan
-CH Public Holiday
-EZ Aug Unemployment
-US Sep ISM mfg
-AGL ENERGY LIMITED ((AGL)) AGM
-AGL ENERGY LIMITED ((AGL)) Annual General Meeting
-CUE ENERGY RESOURCES LIMITED ((CUE)) ex-div 0.25c
-IMPERIAL PACIFIC LIMITED ((IPC)) ex-div 8.00c (100%)
-KIP MCGRATH EDUCATION CENTRES LIMITED ((KME)) ex-div 1.00c (100%)
-KIP MCGRATH EDUCATION CENTRES LIMITED ((KME)) ex-div 5.00c (100%)
-LONDON CITY EQUITIES LIMITED ((LCE)) ex-div 2.50c (100%)
-LA TROBE PRIVATE CREDIT FUND ((LF1)) ex-div 1.23c
-PENGANA GLOBAL PRIVATE CREDIT TRUST ((PCX)) ex-div 1.30c
-VULCAN STEEL LIMITED ((VSL)) ex-div 3.76c (85%)
-WAM STRATEGIC VALUE LIMITED ((WAR)) ex-div 3.25c (100%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 4157.49 | – 24.52 | – 0.59% |
| Silver (oz) | 60.41 | – 1.05 | – 1.71% |
| Copper (lb) | 6.58 | – 0.02 | – 0.30% |
| Aluminium (lb) | 1.46 | – 0.01 | – 0.71% |
| Nickel (lb) | 7.20 | 0.00 | 0.00% |
| Zinc (lb) | 1.80 | + 0.01 | 0.50% |
| West Texas Crude | 90.32 | + 1.40 | 1.57% |
| Brent Crude | 97.85 | – 4.66 | – 4.55% |
| Iron Ore (t) | 96.59 | – 0.14 | – 0.14% |
The Australian share market over the past thirty days…
| Index | 30 Sep 2026 | Week To Date | Month To Date (Sep) | Quarter To Date (Jul-Sep) | Year To Date (2026) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8789.30 | 1.43% | -3.16% | 0.12% | 0.86% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AQZ | Alliance Aviation Services | Upgrade to Speculative Buy from Hold | Morgans |
| BPT | Beach Energy | Upgrade to Neutral from Underperform | Macquarie |
| CDA | Codan | Upgrade to Buy from Hold | Bell Potter |
| CHN | Chalice Mining | Downgrade to Lighten from Hold | Ord Minnett |
| CIP | Centuria Industrial REIT | Upgrade to Outperform from Neutral | Macquarie |
| CMM | Capricorn Metals | Upgrade to Buy from Hold | Bell Potter |
| CQR | Charter Hall Retail REIT | Upgrade to Outperform from Neutral | Macquarie |
| CXO | Core Lithium | Downgrade to Lighten from Buy | Ord Minnett |
| DLI | Delta Lithium | Upgrade to Buy from Hold | Ord Minnett |
| DRR | Deterra Royalties | Upgrade to Buy from Accumulate | Ord Minnett |
| DYL | Deep Yellow | Upgrade to Buy from Hold | Ord Minnett |
| FFM | FireFly Metals | Upgrade to Buy from Hold | Ord Minnett |
| GPT | GPT Group | Upgrade to Outperform from Neutral | Macquarie |
| HDN | HomeCo Daily Needs REIT | Upgrade to Buy from Hold | Bell Potter |
| Upgrade to Outperform from Neutral | Macquarie | ||
| IAG | Insurance Australia Group | Upgrade to Neutral from Underperform | Macquarie |
| IGO | IGO Ltd | Upgrade to Buy from Accumulate | Ord Minnett |
| INA | Ingenia Communities | Downgrade to Hold from Accumulate | Ord Minnett |
| JHX | James Hardie Industries | Downgrade to Neutral from Buy | Citi |
| KAR | Karoon Energy | Upgrade to Outperform from Neutral | Macquarie |
| LTR | Liontown | Upgrade to Buy from Hold | Ord Minnett |
| NEM | Newmont Corp | Downgrade to Hold from Buy | Ord Minnett |
| PLS | PLS Group | Upgrade to Buy from Accumulate | Ord Minnett |
| PNI | Pinnacle Investment Management | Upgrade to Buy from Neutral | UBS |
| REA | REA Group | Upgrade to Hold from Sell | Bell Potter |
| SM1 | Synlait Milk | Upgrade to Outperform from Underperform | Macquarie |
| VCX | Vicinity Centres | Upgrade to Outperform from Neutral | Macquarie |
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.)
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CHARTS
For more info SHARE ANALYSIS: AGL - AGL ENERGY LIMITED
For more info SHARE ANALYSIS: APA - APA GROUP
For more info SHARE ANALYSIS: COL - COLES GROUP LIMITED
For more info SHARE ANALYSIS: CUE - CUE ENERGY RESOURCES LIMITED
For more info SHARE ANALYSIS: IPC - IMPERIAL PACIFIC LIMITED
For more info SHARE ANALYSIS: KLS - KELSIAN GROUP LIMITED
For more info SHARE ANALYSIS: KME - KIP MCGRATH EDUCATION CENTRES LIMITED
For more info SHARE ANALYSIS: LCE - LONDON CITY EQUITIES LIMITED
For more info SHARE ANALYSIS: LF1 - LA TROBE PRIVATE CREDIT FUND
For more info SHARE ANALYSIS: LLC - LENDLEASE GROUP
For more info SHARE ANALYSIS: MOT - METRICS INCOME OPPORTUNITIES TRUST
For more info SHARE ANALYSIS: MQG - MACQUARIE GROUP LIMITED
For more info SHARE ANALYSIS: MXT - METRICS MASTER INCOME TRUST
For more info SHARE ANALYSIS: PCX - PENGANA GLOBAL PRIVATE CREDIT TRUST
For more info SHARE ANALYSIS: PNI - PINNACLE INVESTMENT MANAGEMENT GROUP LIMITED
For more info SHARE ANALYSIS: RIO - RIO TINTO LIMITED
For more info SHARE ANALYSIS: SKC - SKYCITY ENTERTAINMENT GROUP LIMITED
For more info SHARE ANALYSIS: VSL - VULCAN STEEL LIMITED
For more info SHARE ANALYSIS: WAR - WAM STRATEGIC VALUE LIMITED
For more info SHARE ANALYSIS: WOW - WOOLWORTHS GROUP LIMITED