Daily Market Reports | 8:54 AM
This story features NEXTDC LIMITED, and other companies.
For more info SHARE ANALYSIS: NXT
The company is included in ASX50, ASX100, ASX200, ASX300, ALL-ORDS and ALL-TECH
Nasdaq led US markets higher as SpaceX rallied after its earnings report and buyers moved back into Nvidia.
Elon Musk is looking to merge Tesla and SpaceX.
The Australian market finished in the green yesterday, despite hawkish commentary from Deputy Reserve Bank Governor, Andrew Hauser.
ASX200 futures are pointing to a flat to slightly negative start on Thursday morning.
| World Overnight | |||
| SPI Overnight | 8848.00 | – 1.00 | – 0.01% |
| S&P ASX 200 | 8831.30 | + 14.40 | 0.16% |
| S&P500 | 7757.17 | + 44.60 | 0.58% |
| Nasdaq Comp | 26702.86 | + 278.04 | 1.05% |
| DJIA | 52856.09 | + 360.21 | 0.69% |
| S&P500 VIX | 16.68 | – 0.63 | – 3.64% |
| US 10-year yield | 5.15 | + 0.03 | 0.57% |
| USD Index | 101.70 | – 0.03 | – 0.03% |
| FTSE100 | 10752.88 | + 19.88 | 0.19% |
| DAX30 | 25645.04 | + 340.62 | 1.35% |
Good Morning,
The ASX200 rallied 14.4 points or 0.16% led by Telecoms, up 2.23%, Staples, up 0.25% and Healthcare.
InfoTech fell -3.32% weighed down by NextDC ((NXT)) which fell over -40% after an earnings downgrade due to power connection delays at its M3 data centre.
RBC Capital’s take on NextDC: Given the uncertainty around NextDC’s near term outlook following delays to its M3 data centre, and concerns around NXT’s funding/liquidity, we have taken a conservative approach to our forecasts and valuation, and now only include contracted developments as our base case.
Our target price falls to $9.00 (last close $5.35, book value/share $7.90), we retain our Outperform rating.
Based on our new forecasts, NXT has sufficient liquidity and headroom to covenants to fund existing contracted billing.
Next catalyst: AGM update (20 Nov) where NXT will provide more detail on FY27’s outlook and colour on the M3 delay.
Nick Scali’s ((NCK)) trading update: “Trading conditions in Australia and New Zealand remained challenging during the first quarter, with written sales orders -15% below the prior corresponding period and store traffic approximately -10% lower. This compares to written sales order growth of 11% in Q1 FY26.”
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/
Market Overview, J.L. Bernstein extract
SpaceX Lifted Chip Stocks and Hit Phone Companies
Nvidia added more to the Nasdaq than any other stock today, and SpaceX came in second.
Other chipmakers rallied after SpaceX said its AI business grew ninefold.
Phone carriers fell instead, since SpaceX plans to launch Starlink Mobile, a cellphone service, in early 2028.
Musk told analysts it could eventually bring in several hundred billion dollars a year.
A SpaceX-Tesla Deal Needs Tesla Holders to Say Yes
Musk wants to merge SpaceX and Tesla, but he owns just under a fifth of Tesla.
A deal needs backing from holders of more than half its shares.
Altimeter Capital’s Brad Gerstner expects SpaceX to pay US$420 to US$550 a Tesla share, against about US$386 this afternoon.
It would be the biggest merger in history, likely valuing Tesla above US$1.5 trillion.
Netflix Hit a Two-Year Low After a Soft Forecast
Netflix expects US$13.44 billion in fourth-quarter revenue, just short of the US$13.51 billion analysts wanted.
It cut its 2026 ad sales target to US$2.7 billion from US$3 billion, since new ad tools are running late.
The stock is on track for its lowest close since August 2024, about half its June 2025 record.
Netflix still sees sales growing by double digits next quarter.
ANZ Bank Morning Focus, extract
Stock markets rallied, with all key northern hemisphere indices up.
The S&P500 was up 0.58% and Nasdaq rose over 1%.
The EuroStoxx50 and the FTSE100 indices ended the session 1.4% and 0.2% higher respectively.
In bond markets, the yield on the US 10y Treasury bond was little changed at 5.12%.
The active WTI oil future fell -0.2% to US$97.6/bbl, while spot gold was up 0.2% to US$4,132/oz.
US mortgage applications fell -5.3% in the week to 16 October, following a -2.7% decline in the previous week. That was the seventh consecutive weekly decline and illustrates the challenges facing the residential real estate market, as mortgage rates reach high levels (7.25–7.50%).
The Mortgage Applications Purchase Index fell -7.3% in the week to its lowest level since January 2025.
The Bank of England is expected to join the shift towards tighter monetary policy following the uptick in September inflation and evidence of some stabilisation in the labour market.
In September, CPI inflation rose 3.5% y/y, up from 3.1% y/y in August. The largest driver of the rise in inflation was motor fuel costs, which rose 29.8% y/y. Diesel prices are at their highest level since July 2022 following Russia’s invasion of Ukraine.
There was also some evidence that the surge in semiconductor prices is affecting inflation. Prices for computer game downloads rose 40% y/y.
The UK is not immune from the conflict in the Middle East or the AI investment boom in the US. There was also disappointing news on public sector finances. Government borrowing was GBP24.5bn in September, GBP1.8bn more than September 2025. Debt interest payments amounted to GBP10.9bn, up 16.6% y/y.
The current budget deficit, which is borrowing used for day-to-day public sector activities, was GBP15.8bn in September, GBP2.4bn more than the Office for Budget Responsibility had forecast, illustrating the challenges facing the Chancellor and new Burnham administration ahead of its first Budget next week.
With the Bank of England expected to raise interest rates next month (25bp to 4.0%), the challenges facing fiscal policy and the gilt market are not getting any easier.
Public sector net debt exceeded GBP3trn for the first time (GBP3,005bn), equivalent to 94% of GDP.
As a share of GDP that was down 0.7% from a year earlier but still around the highest levels since the 1960s.
Midterm update: Pre-election tail risk scenarios, Danske Bank, extract
With two weeks until the US midterm elections on 3 November, early voting has already opened in more than 40 states.
Prediction markets are broadly unchanged since we published our Midterm update, 13 October. The prediction market Polymarket continues to see Democrats winning both chambers as the most likely outcome, with a 62.5% probability.
This has created a growing sense of urgency, with President Trump and the administration appearing ready to 1) implement policies before Republicans potentially lose their majorities in both chambers of Congress and 2) pursue policies aimed at swaying voters towards Republican candidates.
1) became clear when the White House formed a committee to probe Fed Governor Cook, whom Trump has repeatedly tried to remove from the Fed Board of Governors. Trump appears pressured to remove Cook before the new Senate takes office in early January, as a Democratic majority could block his Fed Board nominations even if he removed Cook later.
We do not expect him to succeed before the new Congress takes office. The prediction market Kalshi put the probability of Cook leaving or being removed before January at below 10%, and only a 25% chance of it happening before 2029.
The first point could also become clear if Republicans seek to pass the full-year government funding package when the current stopgap bill expires on 11 December.
We doubt any spending increases would materially affect the US macro-outlook. The early framework passed by the House in July included US$95 billion in new spending, or 0.3% of GDP, and was already criticised by Republican fiscal hardliners.
2) The first example is the suggestion for a payment to every adult American if Republicans win the midterms. Furthermore, 2) became clear when Trump signalled willingness to strike a diesel deal favourable to Russia, under which Russia would release diesel to world markets to help ease US diesel prices ahead of the midterms.
So far, the decline in US spot and retail diesel prices has been limited, with most of it attributable to seasonal patterns. The probability that Trump would impose a problematic diesel export is now only at 5% at Kalshi, which we have flagged several times.
Trump could try to interfere directly with voting on Election Day. Kalshi assigns a 13% probability to Trump declaring a national emergency before Election Day and a 29% probability before the end of 2026.
However, such a declaration should not give the president power over elections, as these are managed at state level.
An even more severe measure would be for Trump to invoke the Insurrection Act or declare martial law. The former could be used to deploy the military at polling stations, which Kalshi assigns a 17% probability before the end of 2026.
Martial law would mean military authority replacing civilian government and would be even more extreme. A low volume Kalshi markets estimates 24% probability of this happening in 2026.
Trump should not legally be able to use these powers to take control of elections, but he could still try.
When a Gradualist Fed Collides with Hot Inflation, PGIM, Weekly View, extract
As we look forward after last week’s AI jitters, interest-rate outperformance, and geopolitical developments, we continue to see a U.S. economy where elevated inflation shows little signs of retreating.
Yet, Fed officials appear set on taking a gradual tightening approach, which we believe carries policy ramifications heading into 2027.
We see U.S. GDP coming in at an above-trend pace of 2.3% for 2026 with support coming from continued consumer spending and the AI-investment boom.
On the labor side, we see stable to improving conditions with a falling unemployment rate and job creation that continues to exceed our estimated breakeven rate of zero to 40,000 (i.e., the job growth needed to keep the unemployment rate constant).
Meanwhile, September’s inflation data came in hot across all major indicators, including core and headline CPI, producer and import prices, and anecdotally in the Fed’s Beige Book report. Furthermore, when we assess the PPI reading, energy pressures on input costs are readily visible and point to ongoing price pressures.
Furthermore, the market has started to price in our base case of a “Prolonged Quagmire” in the Middle East with our estimated price range of US$90-US$120 / barrel on Brent crude. Futures no longer treat a quick return below $90/bbl as the default outcome, and the difference is in the tail risks.
The market still sees risks skewed to the downside, consistent with some form of settlement, whereas we see them skewed to the upside and towards escalation.
However, Fed officials, such as New York Fed President John Williams, appear to be advocating for a gradual approach to tightening monetary policy, and Fed Chair Warsh didn’t push back against that concept in his comments at last week’s IMF meetings (we believe Warsh would like to move faster, but currently lacks the votes).
The combination of a gradually moving Fed and hot inflation runs the risk of further embedding inflation and ultimately requiring more policy tightening.
As a result, we adjusted our U.S. monetary policy call last week to where we are no longer expecting a rate hike at next week’s Fed meeting.
Instead, we now expect 100 bps of additional tightening, up from 50 bps previously, with the next rate hike coming in December and followed by one per quarter thereafter.
Corporate news in Australia:
- IFM Investors acquires a 64% stake in UK ports operator Associated British Ports in a GBP10bn deal, reportedly beating KKR and Apollo
- SpaceX and Tesla establish special committees to explore a potential US$3.5trn merger, with Australian investors estimating over US$200bn in potential passive fund inflows
- Genesis Capital acquires New Zealand oncology provider Harbour Cancer & Wellness, expanding its healthcare portfolio
- Genesis Minerals ((GMD)) prepares a circa $1bn divestment of Vault Minerals’ ((VAU)) Sugar Zone, Deflector and Mount Monger assets following its proposed $5.6bn acquisition
- Blackstone’s proposed sale of Australian clinical trials provider Nucleus Network for over $1bn faces uncertainty as bidders fall short on valuation
- Seek ((SEK)) restructures its Growth Fund arrangements to target $840m in investor liquidity over five years, with potential near-term investment sales of circa $1bn
- Guzman y Gomez ((GYG)) sees an $89.5m block trade at $25.55 per share, a -4.3% discount, potentially marking TDM Growth Partners’ exit following chairman Guy Russo’s $35m share sale
- Austal ((ASB)) secures $245m in National Reconstruction Fund debt financing for infrastructure supporting its $4bn Landing Craft Heavy contract, with financing costs covered by the Commonwealth
- MA Financial ((MAF)) suspends redemptions from its $2.1bn wholesale property credit fund until at least March 2027 and winds up its $100m retail property income fund
- Koda Capital founders seek a new private capital backer to potentially acquire Emigrant Partners’ minority stake, fund growth and facilitate partner selldowns amid staff unrest
- Aware Super attributes Firmus Technologies’ withdrawn IPO to greater investor selectivity towards AI investments following insufficient US institutional demand
- Firmus Technologies reportedly needs to raise billions urgently to complete its Malaysian data centre campus, with OpenAI potentially able to terminate its lease agreement over material delays
- AGL Energy ((AGL)) nears a funding agreement with an Australian investment partner for its renewable energy pipeline, while a potential equity investment or acquisition of Mike Cannon-Brookes’ circa 10% stake remains speculative
On the calendar today:
-NZ 3Q CPI
-NZ 3Q CPI non-tradeable
-NZ 3Q CPI tradeable
-JP Sep Machine tool orders (final)
-US Continuing jobless claims
-US Initial claims 4-week average
-US Initial jobless claims
-US Oct Kansas City Fed manufacturing activity
-AUCKLAND INTERNATIONAL AIRPORT LIMITED ((AIA)) AGM
-APA GROUP ((APA)) AGM
-ARAFURA RARE EARTHS LIMITED ((ARU)) AGM
-ASX LIMITED ((ASX)) AGM
-AURIZON HOLDINGS LIMITED ((AZJ)) AGM
-BAPCOR LIMITED ((BAP)) AGM
-BHP GROUP LIMITED ((BHP)) AGM
-BRAMBLES LIMITED ((BXB)) AGM
-CLEANAWAY WASTE MANAGEMENT LIMITED ((CWY)) AGM
-FORTESCUE LIMITED ((FMG)) Qtrly update
-INSURANCE AUSTRALIA GROUP LIMITED ((IAG)) AGM
-KAROON ENERGY LIMITED ((KAR)) Qtrly update
-MAGELLAN FINANCIAL GROUP LIMITED ((MFG)) AGM
-MIRVAC GROUP ((MGR)) Qtrly update
-N1 HOLDINGS LIMITED ((N1H)) ex-div 0.4c (0%)
-SANTOS LIMITED ((STO)) Qtrly update
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 4133.92 | + 13.56 | 0.33% |
| Silver (oz) | 57.90 | + 0.16 | 0.28% |
| Copper (lb) | 6.54 | – 0.03 | – 0.46% |
| Aluminium (lb) | 1.36 | – 0.01 | – 0.52% |
| Nickel (lb) | 6.96 | + 0.04 | 0.52% |
| Zinc (lb) | 1.70 | – 0.02 | – 1.06% |
| West Texas Crude | 97.69 | – 0.59 | – 0.60% |
| Brent Crude | 109.63 | + 0.47 | 0.43% |
| Iron Ore (t) | 90.85 | – 0.10 | – 0.11% |
The Australian share market over the past thirty days…
| Index | 21 Oct 2026 | Week To Date | Month To Date (Oct) | Quarter To Date (Oct-Dec) | Year To Date (2026) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8831.30 | 0.28% | 0.48% | 0.48% | 1.34% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ARF | Arena REIT | Upgrade to Buy from Neutral | UBS |
| BHP | BHP Group | Upgrade to Accumulate from Hold | Ord Minnett |
| BOQ | Bank of Queensland | Downgrade to Trim from Hold | Morgans |
| CGF | Challenger | Downgrade to Hold from Buy | Ord Minnett |
| Downgrade to Neutral from Buy | UBS | ||
| CWY | Cleanaway Waste Management | Downgrade to Hold from Buy | Morgans |
| DNL | Dyno Nobel | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| FPR | FleetPartners Group | Downgrade to Neutral from Outperform | Macquarie |
| Downgrade to Hold from Buy | Ord Minnett | ||
| HUB | Hub24 | Upgrade to Buy from Accumulate | Ord Minnett |
| MAP | Microba Life Sciences | Downgrade to Hold from Buy | Morgans |
| MSV | Mitchell Services | Upgrade to Speculative Buy from Accumulate | Morgans |
| NHC | New Hope | Upgrade to Accumulate from Hold | Morgans |
| Upgrade to Accumulate from Hold | Ord Minnett | ||
| PWH | PWR Holdings | Upgrade to Accumulate from Hold | Morgans |
| RHC | Ramsay Health Care | Downgrade to Neutral from Outperform | Macquarie |
| RRL | Regis Resources | Downgrade to Hold from Buy | Morgans |
| RTH | RAS Technology | Downgrade to Hold from Buy | Ord Minnett |
| S32 | South32 | Upgrade to Buy from Accumulate | Ord Minnett |
| SIG | Sigma Healthcare | Downgrade to Hold from Buy | Bell Potter |
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)
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CHARTS
For more info SHARE ANALYSIS: AGL - AGL ENERGY LIMITED
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For more info SHARE ANALYSIS: NCK - NICK SCALI LIMITED
For more info SHARE ANALYSIS: NXT - NEXTDC LIMITED
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For more info SHARE ANALYSIS: VAU - VAULT MINERALS LIMITED