Daily Market Reports | 9:08 AM
This story features CODAN LIMITED, and other companies.
For more info SHARE ANALYSIS: CDA
The company is included in ASX100, ASX200, ASX300, ALL-ORDS and ALL-TECH
US markets ended higher on Friday, with the Nasdaq Composite Index reaching a new intraday high.
The Australian market equally made some gains on Friday to flatten its performance to-slightly positive last week (quite the achievement given the October 1 shellacking).
ASX200 futures are pointing to a positive start on Monday morning.
Several states are on holiday, which may make for a quiet day, volume-wise, on the market.
| World Overnight | |||
| SPI Overnight | 8746.00 | + 26.00 | 0.30% |
| S&P ASX 200 | 8682.10 | + 67.70 | 0.79% |
| S&P500 | 7722.72 | + 56.27 | 0.73% |
| Nasdaq Comp | 27190.86 | + 319.27 | 1.19% |
| DJIA | 51176.96 | + 250.40 | 0.49% |
| S&P500 VIX | 15.31 | – 1.08 | – 6.59% |
| US 10-year yield | 5.28 | + 0.04 | 0.76% |
| USD Index | 101.93 | – 0.11 | – 0.10% |
| FTSE100 | 10461.95 | + 33.68 | 0.32% |
| DAX30 | 25231.20 | + 291.85 | 1.17% |
Good Morning,
The ASX200 closed up 67.70 points or 0.79% on Friday, closing broadly flat over the week and down -1.10% for FY27-to-date.
InfoTech was the strongest performer last week, up 7.34%. led by Codan ((CDA)) which gained the mantle of the largest Tech business by capitalisation on the ASX.
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
Nasdaq Touches A Record As Tech Leads
Nvidia hit its first all-time high since May, and AMD, CrowdStrike and Palo Alto Networks set records too.
The Nasdaq is headed for its third straight winning week.
The Dow is on pace for its fourth losing week in five, so tech is still doing most of the heavy lifting.
G7 Deal Heads Off A U.S. Diesel Export Ban
The White House pushed Europe to open its fuel reserves or face a U.S. ban on diesel exports.
The G7 agreed: 100 million barrels of crude and fuel over four months, diesel first.
Members also promised not to restrict fuel exports to each other, which takes the ban off the table for now.
U.S. diesel sits near US$6.39 a gallon, just under last week’s record.
Paychecks Are Falling Behind Prices
Wage growth slowed to its weakest pace since May 2021.
Prices have outrun paychecks since the spring, as gas, diesel and airfares climbed after the Iran war started.
That squeeze helps explain why consumer confidence sits near historic lows a month before the midterms.
For the Fed, slower pay means the job market isn’t adding to inflation.
ANZ Bank, Australian Morning Focus extract
Equity markets rose on Friday night following a soft US labour market report, which dampened Fed rate hike expectations.
Bond markets remained volatile, with an initial rally in US Treasuries following the data reversing.
The S&P500 closed up 0.7% and the Dow up 0.5%.
The EuroStoxx50 rose 1.0% and the FTSE 100 rose 0.3%.
The yield on the US 10yr Treasury note rose 3bp to 5.27%, a 12bp turnaround from session low.
The active WTI future is down -1.9% to US$91.1/bbl. Gold fell -0.8% to US$4,141.2/oz.
US Nonfarm payrolls rose 29k in September, below the 90k consensus, while net revisions subtracted 60k from the prior two months. The three-month moving average in hiring was stable at 51k.
The unemployment rate rose 0.1ppt to 4.2% as the labour force participation rate rose 0.2ppt to 61.8%. Wage growth continued to trend lower. Growth in average hourly earnings eased -0.1ppt to 3.0% y/y, below the consensus.
Euro area: Headline HICP inflation accelerated from 3.2% y/y to 3.8% y/y in September, marginally above the consensus. The core measure rose 0.1ppt to 2.5% y/y, hovering between 2.4% and 2.5% since June.
The data continue to show no sign of pass-through from higher energy prices into underlying inflation.
Diesel release: President Trump requested that Europe release strategic diesel reserves to ease pressure on prices and avoid the need for a ban on US diesel exports.
On Friday night G7 economies agreed to release up to 100m barrels of diesel and oil over the next four months. French President Macron said the move was designed to “send a clear signal to markets”, but the impact is likely to be short-term.
US Payrolls buy breathing room: Financial markets judged September’s softer US labour market report as giving the FOMC more time to assess conditions before adjusting policy further. Senior Fed officials have signalled there is no need for urgency, and markets have sharply reduced expectations of an October rate hike.
While hiring moderated, unemployment edged higher and wage growth slowed, the report is unlikely to change the FOMC’s view that the labour market is broadly balanced. The focus now turns to September CPI and PPI ahead of the October meeting.
More broadly, a stable labour market, elevated inflation and resilient activity suggest further policy tightening may still be warranted.
US MARKET CALL: Stocks Ignoring Bonds, For Now, Ed Yardeni & Toby Hearst, Yardeni QuickTakes, extract
The 10-year US Treasury bond yield has climbed above 5.25%, and the S&P500 hasn’t flinched. The stock index is just 2.2% below our year-end target of 7,900.
It could overshoot our target in the coming days now that crude oil shipments from the Persian Gulf producers reportedly are averaging around 98% of pre-war totals, excluding Iran.
Producers and shippers have found workarounds to their usual Strait of Hormuz routes, including alternative pipeline routes, ship-to-ship transfers, and naval-escorted night transits.
The question is: How long can stocks ignore bonds if yields keep rising despite lower oil prices?
If yields are simply repricing to reflect stronger-than-expected economic growth, then earnings will remain strong. The downside risk is to the stock market’s valuation multiple if bond yields are rising on concerns about mounting government debt, possibly exacerbated by the unwinding of the yen carry trade.
For now, we are sticking with our S&P500 targets of 7,900 by year-end and 8,400 by mid-year 2027. Here’s more:
I. Bonds
The 10-year Treasury yield rose to 5.24% on Friday, and the 10-year TIPS yield rose to 2.91%. Since the start of the year, the nominal yield is up 109bps, and the TIPS yield is up 95bps.
Real yields account for nearly all of the increase, while inflation expectations have barely budged. We read that as a vote of confidence in the economy and a sign of strong demand for credit.
Friday’s employment report disappointed. Payrolls rose only 29,000 in September versus forecasts of 80,000-100,000, with 60,000 of additional downward revisions for July and August.
The 10-year yield dipped on the news, then recovered, suggesting that more than the economy’s strength or weakness is driving yields. The 2-year yield is 4.78%, well above the 3.88% federal funds rate and discounting more Fed rate hikes ahead.
We see the payroll miss as an outlier among otherwise solid labor market indicators.
Credit markets are starting to show signs of stress as interest rates move higher. Credit default swap spreads have widened in recent weeks.
Private credit is also showing some distress again. The Virtus Private Credit Strategy ETF and the VanEck BDC Income ETF have taken another leg down.
The slide coincides with another quarter of heavy redemption requests at non-traded private credit funds, many of which remain above their 5% quarterly withdrawal limits. The stress has remained within private credit. It hasn’t spilled over into the broad stock market.
II. Stocks
The S&P500 closed at 7,722.72 on Friday, -1.0% below its August 13 record high. The S&P500’s summer stall has turned into a fall stall. The equal-weight S& 500 is down -5.9% from its August 14 record high and is now only 2.0% above its 200-day moving average.
Concentration worries have returned with the Magnificent-7’s rebound since mid-August. XMAGS is up 13.6% ytd, versus 10.1% for MAGS and 12.8% for the S&P 500. The broad market’s outperformance has shrunk considerably since August.
The rebound in the stock prices of the hyperscalers since late July has been led by Meta.
The Russell2000 is down -7.7% from its record high on August 14 and 1.8% above its 200-day moving average. SmallCaps are very sensitive to interest rates. If high bond yields start to bite the economy, the SmallCaps will be the first to react.
III. Earnings
The fabulous earnings momentum (FEMO) story remains intact. S&P500 forward earnings rose to a record US$406.45 per share last week. The 2027 consensus estimate has flattened over the past few weeks around $419.
We still expect both to climb to US$425 by year-end on better-than-expected Q3 and Q4 earnings. JPMorgan kicks off the Q3 earnings reporting season on October 13.
Industry analysts expect Q3 earnings to rise 23.4% y/y and Q4 earnings to rise 28.2%. Both estimates have edged down ahead of reporting season, as they usually do. We expect companies to clear the lowered bar.
IV. Valuation
Since mid-August, the stock market’s slippage has come entirely from a lower multiple. S&P500 forward earnings is up 28.2% ytd, compared with 12.8% for the price index, while the forward P/E is down 12.8%.
The S&P500’s forward P/E is 19.0, the Mag-7’s is 22.9, and the SMidCaps’ (i.e., SmallCaps and MidCaps collectively) is below 15. Our 7,900 S&P 500 target assumes an 18.6 multiple. With the 10-year yield above 5.00%, we see more downside than upside for valuations through year-end.
V. Sentiment
The two bull/bear ratios we follow are pointing in opposite directions. The Investors Intelligence ratio is 3.75, well above its 2.61 average, while the AAII ratio is 0.74, well below its 1.18 average.
Newsletter writers are too bullish. Individual investors are too bearish.
Individual investors may seem to be bearish, but they are fully invested. Equities rose to a record 37.8% of household net worth and 48.2% of household financial assets in Q2.
AAII members hold 71.7% of their portfolios in stocks, 14.8% in bonds, and only 13.3% in cash. Retail investors are in this market with both feet.
Q4 Market Outlook: Strong Years Usually Finish StrongThe Bull/Bear Report, Lance Roberts, extract
Since early August, the S&P500 has gone nowhere in a hurry. The index has chopped between roughly 7,550 and 7,800 on a closing basis.
It never reclaimed the August 13 record of 7,798.99, nor did it break down. As we warned in “September Market Weakness: The Setup Has Teeth,” the buyers who carried August were leaving the table.
That’s exactly what happened. Last week, we looked at why Jefferies’ 9,000 target needs everything to go right over the next fifteen months.
But what about the Q4 market outlook? A recent note by Jason Zweig from the WSJ made a great point:
“It’s almost October. In the northern hemisphere, October has long been a time for reaping—but also for sowing.
Yes, in 1987 the stock market crashed on Oct. 19, falling more than -20% in a single day. Over the five days ended Oct. 10, 2008, as the global financial crisis intensified, U.S. stocks lost -18%, the worst week then on record.
The panic of 1907, which devastated the U.S. banking system, also erupted in October. Some researchers have even argued for a ‘Halloween indicator,’ which steers clear of stocks until after Oct. 31.
And many investors, in my experience, worry that October is cursed by the market gods.
Well, then, so is January, when the horrific bear market of 1973-74 began, initiating a -48% wipeout. So is February, when the 22% swoon of 1966 started—and the pandemic panic of 2020.
So is March, which kicked off the beginning of the disastrous bear market of 2000-02, when tech stocks fell by about -80%—and the second-worst market downdraft on record, from 1937 to 1942, when the stock market lost 60%. So is April, which in 2011 was the start of a 19% drop that ended at the beginning of October.”
Jason concluded with a famous quote:
“OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.” – Mark Twain
Yes, the market could crash this month; such is always a possibility in any given month, as Jason notes above. However, the market won’t crash just because it’s October, and this year, there are a surprising number of things lining up in the bulls’ favour.
Corporate news in Australia:
- Ingenia Communities ((INA)) has granted Warburg Pincus access to initial due diligence, subject to a mutually acceptable confidentiality arrangement
- Cleanaway Waste Management ((CWY)) has received written reconfirmation from EQT Infrastructure of its $9.4bn takeover bid for the waste management group
- CSL ((CSL)) has struck an exclusive deal with Swiss biotech Alentis Therapeutics to co-develop lixudebart, a potential treatment for rare kidney and liver diseases
- Fisher & Paykel Healthcare ((FPH)) plans to sell 12 hectares of its 105-hectare Karaka Road site in Drury, New Zealand, to Health New Zealand for NZ$45.3m
- Firmus Technologies is considering a dual Nasdaq and ASX $44bn listing as the AI infrastructure developer seeks additional capital to fund data centres for customers including Meta and OpenAI, ahead of its planned October 23.
On the calendar today:
-AU Public Holiday (NSW)
-AU Sep PMI (final)
-JP Sep PMI (final)
-CH Public Holiday
-EZ Sep PMI (final)
-UK Sep PMI (final)
-US Sep PMI (final)
-VERBREC LIMITED ((VBC)) ex-div 0.15c (100%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 4140.19 | – 36.87 | – 0.88% |
| Silver (oz) | 60.37 | – 0.60 | – 0.98% |
| Copper (lb) | 6.49 | – 0.03 | – 0.46% |
| Aluminium (lb) | 1.41 | – 0.04 | – 2.95% |
| Nickel (lb) | 7.00 | – 0.06 | – 0.87% |
| Zinc (lb) | 1.72 | – 0.07 | – 3.95% |
| West Texas Crude | 91.11 | – 1.70 | – 1.83% |
| Brent Crude | 102.25 | + 0.07 | 0.07% |
| Iron Ore (t) | 91.35 | – 5.24 | – 5.42% |
The Australian share market over the past thirty days…
| Index | 02 Oct 2026 | Week To Date | Month To Date (Oct) | Quarter To Date (Oct-Dec) | Year To Date (2026) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8682.10 | 0.20% | -1.22% | -1.22% | -0.37% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AMI | Aurelia Metals | Downgrade to Neutral from Outperform | Macquarie |
| BPT | Beach Energy | Upgrade to Neutral from Underperform | Macquarie |
| CIP | Centuria Industrial REIT | Upgrade to Outperform from Neutral | Macquarie |
| CQR | Charter Hall Retail REIT | Upgrade to Outperform from Neutral | Macquarie |
| DPM | DPM Metals | Downgrade to Neutral from Outperform | Macquarie |
| DRO | DroneShield | Upgrade to Hold from Lighten | Ord Minnett |
| DRR | Deterra Royalties | Upgrade to Buy from Neutral | UBS |
| GGP | Greatland Resources | Upgrade to Outperform from Neutral | Macquarie |
| GL1 | Global Lithium Resources | Downgrade to Neutral from Outperform | Macquarie |
| 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 | ||
| KAR | Karoon Energy | Upgrade to Outperform from Neutral | Macquarie |
| LIN | Lindian Resources | Downgrade to Underperform from Neutral | Macquarie |
| LTR | Liontown | Downgrade to Hold from Buy | Ord Minnett |
| QBE | QBE Insurance | Upgrade to Outperform from Neutral | Macquarie |
| REA | REA Group | Upgrade to Hold from Sell | Bell Potter |
| RIO | Rio Tinto | Upgrade to Outperform from Neutral | Macquarie |
| TCL | Transurban Group | Upgrade to Outperform from Neutral | Macquarie |
| VCX | Vicinity Centres | Upgrade to Outperform from Neutral | Macquarie |
| WAF | West African Resources | 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: CDA - CODAN LIMITED
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For more info SHARE ANALYSIS: CWY - CLEANAWAY WASTE MANAGEMENT LIMITED
For more info SHARE ANALYSIS: FPH - FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
For more info SHARE ANALYSIS: INA - INGENIA COMMUNITIES GROUP
For more info SHARE ANALYSIS: VBC - VERBREC LIMITED