Daily Market Reports | 8:29 AM
This story features APA GROUP, and other companies.
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The company is included in ASX50, ASX100, ASX200, ASX300 and ALL-ORDS
US markets lost ground, led by concentrated selling in AI-related stocks.
The oil price rose and US yields sank, as investors scrambled for a risk-off safety trade.
Multiple narratives are in play, but maybe it's as simple as capital scarcity is kicking in for the AI buildout and growth will slow as spending is curtailed either by bond/equity markets or political pushback.
Value stocks outperformed, as investors moved into defensive positions.
The Australian market ended weaker yesterday, with ASX200 futures pointing to a flat to slightly weaker start today.
Is Australia the anti-AI trade?
| World Overnight | |||
| SPI Overnight | 8788.00 | – 19.00 | – 0.22% |
| S&P ASX 200 | 8793.20 | – 38.10 | – 0.43% |
| S&P500 | 7663.43 | – 93.74 | – 1.21% |
| Nasdaq Comp | 26008.86 | – 694.00 | – 2.60% |
| DJIA | 52867.98 | + 11.89 | 0.02% |
| S&P500 VIX | 19.03 | + 2.35 | 14.09% |
| US 10-year yield | 4.95 | – 0.19 | – 3.75% |
| USD Index | 101.63 | – 0.06 | – 0.06% |
| FTSE100 | 10725.03 | – 27.85 | – 0.26% |
| DAX30 | 25371.75 | – 273.29 | – 1.07% |
Good Morning,
Yesterday the ASX200 fell -38.1 points to -0.43% to 8793.20 with buying in Staples, Healthcare, InfoTech and REITs supporting the index, as well as Telcos, while Materials fell almost -2%.
APA Group ((APA)) shares hit a 4-year high yesterday as ASX ((ASX)) and Insurance Australia Group ((IAG)) shares traded at 52-week highs and shares in QBE Insurance ((QBE)) reached for an 18-year high!
The Coppo Report flagged tech stock look “cum a big 4th QTR rally”.
RBC Capital on Fortescue ((FMG)):
“The key focus in FMG’s 1Q FY27 report was the 3.9Mt of ore shipped yet not sold due to ongoing negotiations with CMRG.
“FMG noted a further 4-5Mt of port inventories in China accumulated in October with this run-rate potentially continuing to year-end 2026 unless the issues with CMRG are resolved.
“We assume an 18.9Mt inventory build in 1H FY27 which reduces sales by 18.9Mt and increases working capital.
“However, we assume these inventories are then sold during CY27. We lower our EBITDA by 4% in FY27-29e while our PT is reduced to $16.00/sh. Maintain Sector Perform.”
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
AI Has a Money Problem
Meta posted record sales of US$64.6 billion and still lost more than US$120 billion in market value.
A filing showed about US$825 billion in AI spending commitments, up from nearly US$700 billion in July.
Then Nvidia’s Jensen Huang said neocloud demand is “off the charts,” but the money to meet it is scarce.
Neoclouds buy AI chips and rent them out, and many run on borrowed money.
Money Ran From Tech Into Bonds
Investors piled into government bonds, and the 10-year Treasury yield fell below 5 percent.
That’s its biggest one-day drop in more than two years.
For months, yields rose almost every time oil did, on fears of more inflation.
This time oil climbed and yields fell anyway, because the money leaving tech needed somewhere safe.
Oil Hits a Five-Month High on Iran Strike Plans
Brent crude, the global benchmark, settled at US$113.17 a barrel, its highest since May 4.
The New York Times reported U.S. and Israeli plans to strike Iran again after the Nov. 3 midterms.
Gulf oil exports are back above prewar levels, but global stockpiles are thin, so there’s little room for error.
ANZ Bank Morning Focus, extract
The S&P500 was down -1.21%. Nasdaq fell -2.6%.
The Euro Stoxx 50 ended its session down -1.9%, while the FTSE 100 lost -0.3%.
The yield on the US 10y note fell around -12.7bp to 4.96%.
WTI lifted 0.6% to US$99.4/bbl. Gold was weaker at US$4,021.9/oz.
US initial jobless claims fell to 194k in the week ended 17 October (the survey week for nonfarm payrolls), from 200k in the prior week. That was below the 198k recorded during the survey week for nonfarm payrolls in September.
The four-week moving average fell to 197.75k, the lowest since September 2022. The data are consistent with a stable labour market.
Flight to safe havens: US Treasuries and German Bunds returned to their roles as haven assets, as the sell-off in technology stocks resumed.
The ongoing sell-off in French debt, however, continued unabated. The 10y OAT/Bund spread widened by more than 15bp to 175bp, nearing the 191bp peak seen at the height of the euro zone debt crisis.
Recent protests in France have underscored political risks, as Parliament debates the draft 2027 Budget and the country heads towards the 2027 presidential election.
The yield on Italian BTPs was little changed, failing to join the global bond rally, but there is no evidence that the sell-off in French debt is leading to broader regional contagion that would warrant the ECB activating its Transmission Protection Instrument.
Doing so would ignite perceptions of fiscal dominance and undermine the credibility of the EU’s fiscal framework. The spread between French and Italian debt has widened by more than 45bp since the beginning of September, indicative of the country-specific challenges facing France.
Nonetheless, the deterioration in risk sentiment today was broad and exemplifies current fragilities in an environment of rising interest rates.
With the Fed and ECB both due to meet next week, recent financial market volatility will no doubt influence policymakers’ deliberations.
While we think macroeconomic fundamentals in the US support a rate hike from the Fed, the FOMC may be concerned about exacerbating risks to the AI investment boom and equity markets, on which much of US economic resilience depends in a K-shaped economic environment.
US:Recession Monitor-Rate Hikes to test a resilient economy, Oxford Economics, extract
Our revamped Business Cycle Index no longer signals recession, but rather an economy squarely in expansion.
The new methodology, which measures each indicator against its own rolling 10-year performance, reduces the drag from slower employment growth and boosts the signal from the manufacturing expansion underway.
Still, higher interest rates temper the outlook for the US economy.
Housing is suffering the most from higher rates, with mortgage rates almost 150bps higher since the onset of the Iran war. We cut our forecasts for housing starts, sales, and home price appreciation.
However, tight supply and little pressure on owners to sell limit the downside risk to the housing sector.
Higher rates may entrench the manufacturing bifurcation. Advanced manufacturing will ride the coattails of the AI capex surge, but tighter credit conditions and higher fuel costs will put the rest of the sector, and the inventory rebuild in our forecast, at risk.
Private credit borrowers are already deferring interest payments and extending loans to cope with higher floating rates, and fund withdrawals are running above quarterly caps.
We don’t expect a systemic shock, but default risk will rise alongside higher rates.
AI’s Capital Appetite IS Quietly Resetting the World’s Neutral Rates, Citi Global Perspectives extract
Central banks are starting to conclude that the rate environment has shifted — not from inflation alone, but because AI’s demand for capital is now large enough to move r-star, the neutral rate every policy decision is built around.
In Research, Dirk Willer, Citi’s Global Head of Macro Strategy and Asset Allocation, and Johanna Chua, Citi’s Chief Asia Economist and Head of Emerging Markets Economics, said this came up repeatedly across two days of policymaker meetings in Bangkok.
Chua said central banks are seeing “a step-up demand for capital on this AI cycle” that is pushing r-star higher, prompting even small open economies to rethink their own neutral-rate assumptions.
Willer pointed to two further risks now shaping how markets and policymakers approach AI. On the market side, a drop in AI-related stocks could cut off the funding that large infrastructure buildouts depend on — a risk Willer said now shapes AI trading more than it did a few months ago.
On the policy side, AI security has become a growing concern among policymakers, though Willer noted markets have largely left it unpriced, since there’s no clear sense of what form the risk would take or when it might materialize.
What to watch: Chua pointed to a growing split among emerging markets between net commodity exporters and importers, as countries position for what she called a “geopolitical contest for resources.”
Which side of that line a country sits on, more than its headline growth rate, may increasingly determine its resilience through this cycle.
Corporate news in Australia:
- Stockland ((SGP)) acquires a prime western Sydney industrial site from entities linked to the Bathla family following borrowing defaults and the developer’s financial collapse
- Stockland ((SGP)), Brookfield and MA Financial Group ((MAF)) progress to the second round of bidding for Cerberus-owned Lincoln Place in a potential $1bn transaction, with Stockland considering a binding offer by early December
- WeAre8 founder seeks to assemble a rescue consortium to acquire the struggling Australian social media platform
- Perpetual ((PPT)) could attract a $2bn-plus takeover proposal from a Janus Henderson and KKR consortium, while EQT considers a revised offer and Bain Capital assesses options for the wealth management and corporate trust businesses
- Northern Star Resources ((NST)) CEO Suresh Vadnagra remains open to renewed takeover discussions with Gold Fields if its previously rejected proposal improves, without specifying a minimum acceptable price
- Commonwealth Bank ((CBA)) reportedly considers repurchasing KKR’s stake in Colonial First State after a sale process targeting more than $5bn stalls
- Wildcat Infrastructure agrees to acquire Fraser Shipyards and invest US$350m, strengthening its position as a potential acquirer of Austal ((ASB))’s US operations
- ASX ((ASX)) faces mounting pressure from a shrinking IPO pipeline, Firmus considering a Nasdaq listing and potential private equity-driven delistings, prompting management to pledge a more active competitive response
- Wiluna Mining ((WMC)) shares decline -13.85% on their ASX debut following a $180m raising, with hedge fund selling and volatile equity markets raising concerns over a potential freeze in Australian IPO activity for the remainder of 2026
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On the calendar today:
-AU Oct PMI prelim
-JP Oct PMI (prelim)
-JP Sep CPI
-JP Sep CPI excluding fresh food
-JP Sep CPI excluding fresh food and energy
-EZ Oct PMI prelim
-UK Oct PMI (prelim)
-UK Sep Retail sales
-UK Sep Retail sales excluding auto fuel
-US Oct Kansas Fed
-US Oct PMI prelim
-US Oct Uni Mich sentiment (final)
-US Oct University of Michigan 1-year inflation (final)
-US Oct University of Michigan 5-10-year inflation (final)
-US Oct University of Michigan current conditions (final)
-US Oct University of Michigan expectations (final)
-AUSSIE BROADBAND LIMITED ((ABB)) AGM
-EVT LIMITED ((EVT)) AGM
-MACMAHON HOLDINGS LIMITED ((MAH)) AGM
-MINERAL RESOURCES LIMITED ((MIN)) Qtrly update
-MCMILLAN SHAKESPEARE LIMITED ((MMS)) AGM
-RELIANCE WORLDWIDE CORP. LIMITED ((RWC)) AGM
-SUPPLY NETWORK LIMITED ((SNL)) AGM
-TEMPLE & WEBSTER GROUP LIMITED ((TPW)) AGM
-WHITEHAVEN COAL LIMITED ((WHC)) Qtrly update
-ZIP CO LIMITED ((ZIP)) Qtrly update
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 4027.38 | – 106.54 | – 2.58% |
| Silver (oz) | 54.65 | – 3.25 | – 5.61% |
| Copper (lb) | 6.37 | – 0.17 | – 2.60% |
| Aluminium (lb) | 1.38 | + 0.01 | 0.92% |
| Nickel (lb) | 7.18 | + 0.22 | 3.11% |
| Zinc (lb) | 1.71 | + 0.02 | 0.94% |
| West Texas Crude | 99.35 | + 1.66 | 1.70% |
| Brent Crude | 113.13 | + 3.50 | 3.19% |
| Iron Ore (t) | 90.73 | – 0.12 | – 0.13% |
The Australian share market over the past thirty days…
| Index | 22 Oct 2026 | Week To Date | Month To Date (Oct) | Quarter To Date (Oct-Dec) | Year To Date (2026) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8793.20 | -0.15% | 0.04% | 0.04% | 0.91% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| 29M | 29Metals | Upgrade to Accumulate from Hold | Morgans |
| ARF | Arena REIT | Upgrade to Buy from Neutral | UBS |
| BHP | BHP Group | Upgrade to Accumulate from Hold | Ord Minnett |
| CGF | Challenger | Downgrade to Hold from Buy | Ord Minnett |
| Downgrade to Neutral from Buy | UBS | ||
| CUV | Clinuvel Pharmaceuticals | Downgrade to Trim from Hold | Morgans |
| 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 | Morgans |
| 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 |
| NCK | Nick Scali | Downgrade to Sell from Neutral | Citi |
| NHC | New Hope | Upgrade to Accumulate from Hold | Morgans |
| Upgrade to Accumulate from Hold | Ord Minnett | ||
| NXT | NextDC | Upgrade to Buy from Hold | Morgans |
| 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 |
| WGX | Westgold Resources | Upgrade to Buy from Accumulate | 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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