Daily Market Reports | 8:30 AM
This story features TELSTRA GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: TLS
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS
Investors rotated out of the Nasdaq, including memory stocks, into the equal-weighted S&P500 ahead of earnings reports from some of the major US banks this week, and the release of September CPI and PPI data.
Back home, the Australian market rallied again after Friday's positive close, with ASX200 futures pointing to a positive start ahead of the release of the September RBA minutes.
| World Overnight | |||
| SPI Overnight | 8812.00 | + 9.00 | 0.10% |
| S&P ASX 200 | 8783.20 | + 66.60 | 0.76% |
| S&P500 | 7807.24 | – 4.30 | – 0.06% |
| Nasdaq Comp | 27245.90 | – 120.27 | – 0.44% |
| DJIA | 51850.55 | + 195.60 | 0.38% |
| S&P500 VIX | 15.21 | + 0.37 | 2.49% |
| US 10-year yield | 5.24 | – 0.00 | – 0.08% |
| USD Index | 102.60 | + 0.37 | 0.37% |
| FTSE100 | 10656.28 | + 104.23 | 0.99% |
| DAX30 | 25277.68 | + 190.41 | 0.76% |
Good Morning,
The ASX200 rallied 66.6 points or 0.76% to 8783.20, led by Materials, up 1.52%, Healthcare, up 0.75%, and InfoTech, up 0.85%.
Telcos and REITs weighed on the market, down -1.94% and -1.39%, respectively, amid concerns over SpaceX (SPCX) building its Starlink Telco Stack with the acquisition of up to 15 MHz of low-band 800 MHz spectrum from Grain in the US, helping to build coverage, according to Morgan Stanley.
Concerns over the ability of satellites to disrupt the wireless industry saw traders sell Australian telcos like Telstra Group ((TLS)). The debate continues. The Telstra AGM is scheduled for today.
RBC Capital has changed analyst coverage and downgraded Technology One ((TNE)) to Sector Perform from Outperform, with a lower target price of $32 from $33 ahead of the upcoming FY26 result.
At around 50x FY27 PER, with an inferred circa 18% three-year CAGR, the broker believes the stock is close to fair value. RBC prefers Xero ((XRO)) and WiseTech Global ((WTC)) on valuation grounds relative to forecast earnings growth.
For more details and to stay in touch with which companies are reporting, AGMs and 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 Climbs on Two Fronts
Presidents Trump’s energy ceasefire between Russia and Ukraine lasted only hours before Russia hit Ukrainian power plants. Ship tracker Kpler says oil flows through the Strait of Hormuz fell to 2 million barrels a day Saturday. Before the war, it was about 17 million. Brent climbed back near US$107, and energy stocks hit their first record high since September 10.
China’s Memory Push Hits Micron
Chinese memory maker CXMT says it’s made real progress on a chip design that packs in more storage. It plans a server memory product built on it by year-end, less than three months away. Micron $MU fell and led tech lower, with SK Hynix and Samsung sliding too. Investors didn’t wait to see whether CXMT can deliver.
The Bull Market Turns Four
The S&P500 bottomed at 3,577 four years ago today and has more than doubled since. Investors keep showing up. US stock funds just had 13 straight months of inflows, the longest streak in records going back to 2000. Goldman turned bullish on global stocks for the next three months, betting strong earnings keep the run going.
ANZ Bank, Australian Morning Focus extract
The US Treasury market was closed for the Columbus and Indigenous Peoples’ Day holiday. The S&P500 was down -0.1%, the Dow Jones was up 0.3% and the Nasdaq was down -0.4%.
In Europe, the EuroStoxx50 rose 0.5% and the FTSE100 rallied 1.0%.
The yield on the 10y OAT rose 4.7bp to 4.9%. Oil prices were firmer, with the risk of broadening tensions in the Middle East in focus following recent Houthi attacks in Saudi Arabia. WTI rose 2.5% to US$94.2/bbl. Gold eased -0.4% to US$4,177.3/oz.
US inflation momentum: September CPI, PPI and import price inflation data will be released this week, ahead of the FOMC’s pre-meeting blackout period, which begins on Saturday. During the inter-meeting period, US monetary policymakers have expressed mixed views on the appropriate policy strategy.
Some senior FOMC members have indicated that the central bank can afford to wait before raising interest rates again, while others, mainly regional Fed presidents, favour another rate hike this month.
Market pricing has largely aligned with the former view, which would represent a departure from the usual practice of raising rates at consecutive meetings once a tightening cycle is underway.
If the FOMC believes the US faces an emerging inflation problem, or that inflation remains stubbornly persistent, we think it should raise rates this month. Choosing not to do so would suggest the Committee judges that inflation is not a significant problem and that only a modest mid-cycle adjustment is required to return inflation to target over the forecast horizon. This week’s data should help clarify underlying momentum in inflation.
Consensus expectations are for headline CPI to have risen 0.6% m/m and core CPI 0.2% m/m. We expect markets would reprice sharply following an upside surprise in core CPI and core PPI, as both could signal a firmer monthly outcome for core PCE inflation.
The Cleveland Fed’s Nowcast estimates that September core CPI rose 0.2% m/m, while core PCE inflation is projected to rise 0.25% m/m. If realised, this would suggest that the unusually low monthly inflation readings recorded in June and July were not indicative of a sustained moderation in inflation.
In that scenario, additional monetary restraint would be required, and a consecutive rate hike would send a strong signal of the Fed’s commitment to returning inflation to target.
The Pulse of the Market, Lori Calvasina, RBC Capital extract
Risks In Both Directions Heading Into 3Q26 Reporting Season
The S&P500 EPS outlook was a hot topic in our client meetings in Canada last week. It tended to come up in our discussions of risk factors that could contribute to a short-term pullback.
One of the most popular charts in our meetings highlights how, in 2018 and 2022, when the first tariff episode occurred and the Russia/Ukraine war began, bottom-up EPS forecasts for the current year at the time showed little sign of damage.
That wasn’t the case for the following year, however, as 2019 and 2023 bottom-up EPS forecasts fell steadily from the middle of the prior year.
This speak to a worry we have about 2027 EPS forecasts today, which is that companies are good at managing through challenges in the near term, but ultimately do have to deal with the consequences of events that transpire. Earlier this year, our earnings call transcript review indicated that companies had hedges, inventories, and other strategies in place to help offset the impacts of the conflict. But we are mindful that these buffers will eventually run out or roll off, and that we will soon start to hear companies discuss that issue – if not in the upcoming reporting season, then perhaps in the next one.
At the same time, we find it interesting that there has continued to be little movement in bottom-up consensus EPS growth forecasts for 3Q26, 2026, and 2027 since Labor Day, at least outside of Tech, Energy and the Mag 7.
We highlighted this a few weeks ago, noting that this helped to explain why Tech and Energy have been the best-performing sectors in the S&P 500 of late.
It’s possible that weak price action in the non-Tech and Energy sectors has already been baking in the potential for downgrades to the earnings outlook, improving the set-up for these areas of the stock market if commentary is not as bad as feared.
However, we aren’t seeing signs of a washout on our earnings sentiment indicators. The rate of upward EPS estimate revisions for the S&P500, its top 10 market cap names, and the rest of the index has eased back, but hasn’t fallen into negative territory yet either.
One final thought – we enter 3Q26 reporting season on the heels of back-to-back quarters that saw a massive upside surprise to consensus EPS forecasts. 2Q26 was expected to come in at around 20% but ended up at 34%. 1Q26 was expected to come in at a little more than 10% but ended up at 30%. There are very good reasons to go into the upcoming reporting season in a cautious mood, but it’s admittedly been tough to argue against S&P500 EPS lately.
OpenAI’s US$20bn Reporting Gap Unsettles The AI Trade, Karim Mattar, ARK Invest, extract
Last week, the Financial Times reported that OpenAI’s annualised revenue run rate during the third quarter was approaching US$50bn at the end of September, nearly 30% below the US$70bn rumoured a few months ago. As investors reassessed OpenAI’s momentum, shares of Nvidia, Oracle, and CoreWeave fell.
Key to the gap between the two numbers, we believe, are different measurements of annualised revenue run rate (ARR). OpenAI seems to report its ARR net of the cut taken by its cloud partners, while Anthropic reports gross revenues.
According to the Financial Times, those who originally reported the US$70bn may have adjusted OpenAI’s ARR to compare results with Anthropic’s reporting methodology, while the circa US$50bn seems to be based on OpenAI’s more conservative measure.
The leaked data came as OpenAI reportedly is seeking around US$30bn in private financing at a valuation of circa US$1.4trn. The sell-off in public AI-related equities highlights how tethered the AI trade has become to OpenAI’s growth.
That said, around US$50bn in ARR would be up an impressive 2.5x in nine months from the US$20bn OpenAI reported for December last year, though less than the circa 7x surge that Anthropic reported from December through July.
When Anthropic and OpenAI file for their initial public offerings (IPOs), investors will have more information about their gross and net revenues to compare their financial metrics and growth trajectories on a like-for-like basis.
Corporate news in Australia:
- Equity Trustees ((EQT)) agrees to acquire 100% of L1 Group’s ((L1G)) Platinum Investment Management, expanding its fund-trustee services business
- Treasury Wine Estates ((TWE)) sells Rosemount and two other wine brands back to the Oatley family
- RAM acquires Sydney’s Arcadia Pittwater Private Hospital from Dexus’ ((DXS)) healthcare property fund
- Janus Henderson seeks a private equity partner for a potential $2bn takeover of Perpetual ((PPT)) and a buyer for its trustee business
- IREN shares rise on an unconfirmed report of a multi-year cloud deal with Anthropic
- Coatue reportedly cuts its Firmus IPO commitment to below US$100m, contributing to the collapse of the proposed ASX float
- Glencore prepares for its ASX debut on October 14, seeking to attract Australian investors and narrow its valuation discount to BHP Group ((BHP))
- Lennox Capital Partners reportedly marked up its Firmus stake to the proposed $11 IPO price shortly before the float collapsed, raising questions over a potential valuation reversal
- Maas Group ((MGH)) shares fall for a second consecutive session following the withdrawal of the Firmus IPO
- Partners Group splits its $10.6bn private equity fund to facilitate investor redemptions amid liquidity pressures
- Stonepeak explores a $150m listed infrastructure debt trust targeting returns 3.5%–4% points above swap rates
- Dexus ((DXS)) considers asset sales, restructuring or winding down its $1.1bn healthcare fund after 90% of investors seek to exit
- DayOne, a key Firmus construction partner, discloses worker fatalities, water-related protests and other risks in its US IPO filing, with Morgan Stanley, JPMorgan and Bank of America among the underwriters
On the calendar today:
-AU Sep NAB business survey
-AU Sep RBA minutes
-JP Sep PPI
-US Fed Collins speaks at Banking Conference
-US Fed Waller speaks at Bloomberg New Economy Forum
-US Sep ADP weekly employment change
-US Sep Existing home sales
-US Sep NFIB
-GE Aug Current account balance
-GE Sep CPI (final)
-BABY BUNTING GROUP LIMITED ((BBN)) AGM
-PERENTI LIMITED ((PRN)) ex-div 4.50c
-STAR COMBO PHARMA LIMITED ((S66)) ex-div 0.30c (100%)
-TELSTRA GROUP LIMITED ((TLS)) AGM
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 4169.66 | – 24.21 | – 0.58% |
| Silver (oz) | 60.25 | – 0.55 | – 0.90% |
| Copper (lb) | 6.71 | + 0.05 | 0.75% |
| Aluminium (lb) | 1.39 | 0.00 | 0.00% |
| Nickel (lb) | 7.05 | – 0.00 | – 0.04% |
| Zinc (lb) | 1.74 | 0.00 | 0.00% |
| West Texas Crude | 93.19 | + 1.53 | 1.67% |
| Brent Crude | 106.04 | + 1.61 | 1.54% |
| Iron Ore (t) | 90.68 | 0.00 | 0.00% |
The Australian share market over the past thirty days…
| Index | 12 Oct 2026 | Week To Date | Month To Date (Oct) | Quarter To Date (Oct-Dec) | Year To Date (2026) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8783.20 | 0.76% | -0.07% | -0.07% | 0.79% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ALD | Ampol | Upgrade to Buy from Accumulate | Ord Minnett |
| AMP | AMP | Upgrade to Buy from Accumulate | Ord Minnett |
| Downgrade to Neutral from Buy | UBS | ||
| ARF | Arena REIT | Downgrade to Accumulate from Buy | Ord Minnett |
| BOQ | Bank of Queensland | Downgrade to Hold from Accumulate | Morgans |
| BPT | Beach Energy | Upgrade to Buy from Hold | Ord Minnett |
| CPU | Computershare | Upgrade to Accumulate from Hold | Ord Minnett |
| DMP | Domino’s Pizza Enterprises | Downgrade to Neutral from Buy | UBS |
| ELV | Elevra Lithium | Upgrade to Buy from Neutral | UBS |
| FMG | Fortescue | Downgrade to Trim from Hold | Morgans |
| GYG | Guzman y Gomez | Downgrade to Accumulate from Buy | Morgans |
| HUB | Hub24 | Upgrade to Buy from Neutral | UBS |
| IGO | IGO Ltd | Upgrade to Buy from Neutral | UBS |
| LTR | Liontown | Upgrade to Buy from Neutral | UBS |
| MPL | Medibank Private | Downgrade to Accumulate from Buy | Ord Minnett |
| NWL | Netwealth Group | Upgrade to Buy from Neutral | UBS |
| ORG | Origin Energy | Upgrade to Accumulate from Hold | Ord Minnett |
| ORI | Orica | Downgrade to Accumulate from Buy | Morgans |
| PDN | Paladin Energy | Upgrade to Buy from Neutral | UBS |
| PLS | PLS Group | Upgrade to Buy from Neutral | UBS |
| QBE | QBE Insurance | Upgrade to Buy from Neutral | Citi |
| Downgrade to Accumulate from Buy | Ord Minnett | ||
| RRL | Regis Resources | Upgrade to Buy from Neutral | UBS |
| SFR | Sandfire Resources | Upgrade to Neutral from Sell | UBS |
| WDS | Woodside Energy | Upgrade to Hold from Sell | Ord Minnett |
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: BBN - BABY BUNTING GROUP LIMITED
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For more info SHARE ANALYSIS: S66 - STAR COMBO PHARMA LIMITED
For more info SHARE ANALYSIS: TLS - TELSTRA GROUP LIMITED
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