Daily Market Reports | 8:45 AM
This story features STEADFAST GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: SDF
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS
US markets ended weaker on Friday with selling broadly across the board on higher oil prices.
It is a BIG week ahead with the FOMC meeting, the September PCE report and as 44% of S&P500 market cap reports earnings.
The US midterm elections are just over a week away on November 3rd.
Back home, the Australian market traded slightly weaker last week.
ASX200 futures are pointing to a soft start on Monday morning.
| World Overnight | |||
| SPI Overnight | 8774.00 | – 43.00 | – 0.49% |
| S&P ASX 200 | 8795.20 | + 2.00 | 0.02% |
| S&P500 | 7623.68 | – 39.75 | – 0.52% |
| Nasdaq Comp | 25955.34 | – 53.52 | – 0.21% |
| DJIA | 52215.16 | – 652.82 | – 1.23% |
| S&P500 VIX | 19.45 | + 0.42 | 2.21% |
| US 10-year yield | 4.99 | + 0.04 | 0.71% |
| USD Index | 101.75 | + 0.12 | 0.12% |
| FTSE100 | 10690.36 | – 34.67 | – 0.32% |
| DAX30 | 25181.65 | – 190.10 | – 0.75% |
Good Morning,
The ASX200 finished flat last Friday, up 2 points to close at 8795.20 and closed down -0.1% for the week, after three weeks of gains. Year-to-date the ASX200 is up 0.93%.
It’s a big week on the calendar with Wednesday seeing the domestic September quarter CPI print and the US FOMC decision, Thursday morning AEST.
AGM season also accelerates so more trading updates will be available.
Macquarie on REA Group ((REA)):
“The investor day illustrated the focus on leveraging AI to create a comprehensive ecosystem, that captures a greater share of the TAMs.
“The through-the-cycle financial aspirations are logical and supported by a strong track record of execution and financial flexibility.
“We are cautious with cyclical and structural headwinds presenting nearterm earnings risks, but see REA as a likely AI-winner medium term.”
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
Even the Safe Stocks Fell
Consumer staples, utilities and healthcare all fell, the same safe groups investors have piled into for two weeks.
Staples went into today up double digits for October. Chip stocks like Micron and AMD bounced, which kept the Nasdaq flat while the Dow took the hit.
“Eventually, you run out of people willing to do that sprint,” said Jed Ellerbroek of Argent Capital.
Expensive Oil Hits Airlines and Dollar Stores
Brent crude rose to US$116.72 a barrel, its highest since April 29, on fears of new fighting with Iran.
United, Delta, American and the dollar stores all fell on fuel costs.
Wells Fargo estimates diesel will cost Dollar Tree about -US$25 million in profit this quarter.
Exxon, Chevron and ConocoPhillips, the ones selling the oil, hit all-time highs.
AI’s Suppliers Are Falling Harder Than Its Spenders’
Bloom Energy more than doubled its sales last quarter, and Comfort Systems nearly doubled its backlog to US$17.8 billion.
Both stocks fell sharply for a second straight day. Since Oct. 6, data center builders are down nearly five times as much as Big Tech, which pays them.
If AI spending slows, Big Tech saves money and its suppliers lose sales.
ANZ Bank Morning Focus, extract
Stock markets remained under downward pressure.
The S&P500 was -0.5% lower, the EuroStoxx50 fell -0.3% and the FTSE100 also fell -0.3%.
The yield on the 10y note rose 2.9bp to 5.0%.
Oil prices were firmer. WTI rose 2.9% to US$103.3/bbl. Gold fell =0.2% to US$3,996.1/oz.
University of Michigan consumer sentiment: The final reading for October rose 1.4pts to 48.0 from the preliminary reading. Whilst up from the preliminary snapshot, the final October consumer sentiment data was at a five-month low.
Affordability constraints, including elevated inflation, high energy costs and high mortgage rates, are at the centre of the decline. In October, both 1y and 5–10y inflation expectations picked up to 4.7% and 3.5%, respectively. 5–10y expectations were up 0.1ppt from 3.4% in September. At 4.7%, the 1y measure is up from 4.0% in August.
October PMI data pointed to ongoing resilience in US growth and a pickup in the UK’s level of activity, but highlighted headwinds for the euro area economy. The composite euro area PMI fell to 51.9 vs 53.1, its lowest level in four months, as growth eased in Germany (composite 52.8 vs 53.8) and faltered in France (composite 48.4 vs 51.1).
France’s political unrest, fiscal uncertainty and the sharp rise in OAT yields are weighing on the economy, and there does not appear to be a path to a resolution in the near term. That expectation was reflected in the business outlook, which slumped to its lowest level in six and a half years.
Our assessment is that the rise in European bond yields in general, high energy costs and little, if any, evidence of a pass-through from energy to the broader European inflation framework will allow the ECB to keep rates on hold when it meets on Thursday.
We continue to forecast only one more 25bp rate hike in December. We do not think the economic backdrop and absence of room for fiscal priming (if needed) warrant a more restrictive monetary stance.
There is nothing monetary policy can do to address energy prices, and the ECB has signalled that it will stand firm in the face of inflation risks. But it must also keep a watchful eye on growth.
The backdrop is not one that indicates a resurgence in demand-pull inflation pressures. If anything, the outlook for demand is starting to deteriorate.
At other central bank meetings, the market is pricing in little chance of a 25bp hike in the US, despite the deteriorating inflation backdrop.
The Bank of Japan is also expected to keep rates on hold.
CBA Economics Perspective, The Week Ahead, Harry Ottley
- RBA Deputy Governor Andrew Hauser provided a hawkish jolt this week, describing the inflation outlook as “materially worse” than the August forecasts and saying the Board faces “hard choices”
- Offshore, China’s economy grew by 4.5%/yr in Q3, a little stronger than expected
- Wednesday’s September-quarter CPI will be pivotal. We expect trimmed mean inflation of 1.0%/qtr and 3.6%/yr
- RBA officials appear at Senate estimates, and data is due on trade prices, private sector credit and producer prices
- Offshore, attention will centre on several major central bank decisions. We expect the Fed, Bank of Canada, ECB and BoJ to leave rates unchanged, while the RBNZ is expected to lift the OCR by 25bp to 3.00%
- US Q3 GDP and September PCE inflation will also be important, with growth expected to remain strong and inflation elevated
US Markets Call: Still Proceeding Cautiously, Ed Yardeni & Toby Hearst, Yardeni QuickTakes
On September 15, we advised investors to proceed with caution. We pushed out our 8,400 S&P500 target from year-end 2026 to mid-2027 and set 7,900 as our new year-end target.
On October 14, we reiterated our caution. Sure enough, the stock market has been turbulent since mid-September, with AI-related stocks falling sharply.
We are seeing some buying opportunities, but better ones are likely after the November 3 midterm elections. Our main concern is a likely escalation of the Middle East war. That could push oil prices above their US$120 peak earlier this year.
I. Stock Market Performance
The S&P500 is still up double digits ytd at 11.4%. XMAGS is up 13.1%, while MAGS is up only 6.2%. The gap has widened again in recent weeks as MAGS rolled over. Meta led the latest leg down, falling -9.4% last week after reporting earnings.
Breadth remained on the weak side. Only 37.8% of S&P500 companies are outperforming the index on a y/y basis.
Rotation was notable last week. The S&P500 Energy and Health Care sectors led with gains of 1.5% each. Communication Services fell -6.2%, and Industrials dropped -1.9%. As bad as the week felt, the S&P500 was down only -0.5%.
II. S&P 500 Earnings
S&P500 forward earnings per share rose to a record US$414.41 during the week of October 22 . They are converging on the analysts’ 2027 consensus estimate of US$424.56, up from this year’s estimate of US$365.94.
The 2026 consensus is closing in on our US$375 per-share forecast. The consensus for 2027 matches our US$425 forecast. The 2028 consensus is already US$493.32, well above our US$450 forecast for that year and almost at our US$500 target for 2030!
If the analysts are right, the S&P500 could rise to 10,000 by the end of next year. We are sticking with that target for the end of 2029. We think the analysts are too bullish on earnings.
Forward earnings for the S&P400 and S&P600 are also at record highs.
III. Valuation
Valuation multiples continue to compress despite strong earnings. The Magnificent 7’s forward P/E is 22.8, down from a 2026 peak of 28.5. The S&P500, S&P400, and S&P600 trade at 18.4, 14.5 and 14.0, respectively.
The big valuation story is that of the S&P500 Information Technology sector. Its forward P/E dropped from 26.5 at the end of 2025 to 19.0 now. The S&P500 has fallen from 22.2 to 18.6.
The S&P500’s forward earnings are up 31.0% ytd. The index is up 11.4%. The forward P/E is down -13.5%. Stocks have gotten significantly cheaper this year.
IV. Bonds
The 10-year Treasury yield is back in the “old normal” range of 4.00%–5.00%. It peaked at 5.35%, attracting many buyers. It is now at 4.96%.
Some of that decline reflects safe-haven buying during the recent risk-off sell-off in the stock market. But market-based measures of long-term inflation expectations remain subdued. Bond investors seem to expect inflation to subside. We agree.
The 13-week change in the 10-year yield tends to track the Citigroup Economic Surprise Index (CESI) . Recently, the yield’s change overshot the index, as it has done before. Now, the 10-year yield is up 27bp over the past 13 weeks, down from over 80bp a few weeks ago.
Corporate credit default swap spreads are breaking out again. The widening reflects credit-quality concerns about companies like Oracle and CoreWeave.
The Bond Vigilantes are regulating credit in the AI ecosystem. That’s healthy. We aren’t particularly concerned.
The Bull Bear Report, Technical backdrop, Lance Roberts, RIA Advisors
The S&P500 closed Friday at 7,623.68, down -0.4% for the week. That leaves it -2.4% below its October 6 record close near 7,815.
The index sits -1.0% below its 50-day moving average of 7,702 and is resting right on its 100-day average of 7,605. It remains 4.5% above the 200-day average at 7,293, so the longer-term uptrend is intact.
Furthermore, sector breadth tells the same story from a different angle. Three weeks ago, only three sectors were ahead of the index. As of Friday, eight of 11 sectors are ahead of the index, measured by distance from their 50-day averages. Only technology, industrials, and communications are lagging.
Energy is the most stretched, followed by health care and staples. The leaders have become the crowded trade, and the laggards are where a bounce would come from.
That runs counter to the defensive posture that worked over the last three weeks, and it’s why we’re watching for a chance to rebalance back toward growth rather than adding to the winners.
However, this week will be the test for the market. Roughly 44% of the S&P500 reports earnings, including Microsoft and Alphabet on Wednesday and Amazon on Thursday, on top of a Fed decision and the September PCE report.
That’s a lot of information hitting a market that’s sitting on support. If the 100-day holds and the mega-caps show that AI spending is producing a return, oversold tech has room to rally.
The first stop is the 50-day near 7,700, with the October 21 close at 7,757 just above it. If the 100-day breaks, the September 16 low at 7,564 is next, followed by the July 31 low near 7,494. The 200-day at 7,293 is where the bull trend gets questioned in earnest.
So, what should you be preparing for ahead of next week?
Well, the playbook is actually quite simple. Don’t chase the defensive sectors at these levels. Look at taking some profits in stretched energy and staples positions. Then let tech reach a real oversold extreme before rebalancing toward growth.
The most important level next week is the 100-day average at 7,605.
Where the market closes relative to it after Microsoft and Alphabet report will set the tone into November.
Corporate news in Australia:
- Steadfast Group ((SDF)) secures court approval for shareholders to vote on its proposed $6.7bn takeover by Dragoneer, Amwins Group and KKR on November 27, with completion targeted for December 22
- Wambo Cattle Company sells Queensland land to Singapore’s Zerra DC for a proposed $32bn data centre campus linked to Anthropic, with water access remaining a key development issue
- M Resources seeks Indonesia’s Widjaja family as a potential minority investor in its bid for Whyalla steelworks and associated iron ore mines, competing with India’s Jindal Steel International
- Singapore’s OUE REIT acquires a 50% stake in Sydney’s Salesforce Tower from China’s Ping An for $864m amid ongoing commercial office market weakness
- PAG reportedly targets a stake in Akaysha Energy in a potential transaction valuing the Australian battery storage business at over $3bn
- Warburg Pincus progresses its $2.1bn takeover of Ingenia Communities Group ((INA)), while considering the sale of $1bn in holiday park assets to G’day Group or Tasman Holiday Parks
- Healius ((HLS)) signals preparedness for potential takeover interest amid reports three private equity firms are assessing the company
- Apollo and GIC submit non-binding bids for Rio Tinto’s ((RIO)) $7bn Australian and Canadian energy infrastructure portfolio
- Tokio Marine reportedly pauses consideration of a potential takeover of Suncorp Group ((SUN)) following the insurer’s share price rally
- NRL moves to acquire the Novotel Sydney International Airport hotel from Charter Hall ((CHC)) for $115m, marking its sixth hotel acquisition and largest asset purchase
- AMP Ltd ((AMP)) explores private equity-backed funding for its bank loan portfolio to release capital and potentially facilitate a bank sale or broader takeover, with Insignia Financial ((IFL)) identified as a possible buyer
- Keyview Financial continues searching for an international capital partner, appointing Denison Partners and Berkshire Global Advisors to assess strategic growth options
- Rio Tinto ((RIO)) plans to invest US$1.9bn in Queensland’s Kangwinan bauxite project
- Firmus reportedly parts ways with lobbyist Eamonn Fitzpatrick following the collapse of its proposed $44bn IPO
- Megaport ((MP1)) reportedly considers a capital raising amid heightened volatility in AI and data centre infrastructure stocks following Firmus’ failed IPO and NextDC’s ((NXT)) valuation decline
On the calendar today:
-NZ Public Holiday
-AU RBA Assistant Governor Jones panel at AFR Super and Wealth Summit
-US Oct Dallas Fed manufacturing activity
-COCHLEAR LIMITED ((COH)) AGM
-NICK SCALI LIMITED ((NCK)) AGM
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3993.96 | – 33.42 | – 0.83% |
| Silver (oz) | 53.88 | – 0.77 | – 1.41% |
| Copper (lb) | 6.48 | + 0.11 | 1.73% |
| Aluminium (lb) | 1.38 | + 0.01 | 0.40% |
| Nickel (lb) | 7.12 | – 0.06 | – 0.83% |
| Zinc (lb) | 1.72 | + 0.01 | 0.50% |
| West Texas Crude | 103.27 | + 3.92 | 3.95% |
| Brent Crude | 116.72 | + 3.59 | 3.17% |
| Iron Ore (t) | 90.83 | + 0.10 | 0.11% |
The Australian share market over the past thirty days…
| Index | 23 Oct 2026 | Week To Date | Month To Date (Oct) | Quarter To Date (Oct-Dec) | Year To Date (2026) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8795.20 | -0.13% | 0.07% | 0.07% | 0.93% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| 29M | 29Metals | Upgrade to Accumulate from Hold | Morgans |
| BHP | BHP Group | Upgrade to Accumulate from Hold | Ord Minnett |
| CGF | Challenger | Downgrade to Hold from Buy | Ord Minnett |
| CUV | Clinuvel Pharmaceuticals | Downgrade to Trim from Hold | Morgans |
| EDV | Endeavour Group | Downgrade to Sell from Lighten | Ord Minnett |
| FPR | FleetPartners Group | Downgrade to Hold from Buy | Ord Minnett |
| HUB | Hub24 | Upgrade to Buy from Accumulate | Morgans |
| Upgrade to Buy from Accumulate | Ord Minnett | ||
| KAR | Karoon Energy | Downgrade to Neutral from Outperform | Macquarie |
| MAP | Microba Life Sciences | Downgrade to Hold from Buy | Morgans |
| NCK | Nick Scali | Upgrade to Hold from Lighten | Ord Minnett |
| 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 |
| Downgrade to Equal-weight from Overweight | Morgan Stanley | ||
| PWH | PWR Holdings | Upgrade to Accumulate from Hold | Morgans |
| 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 |
| 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.)
(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)
All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.
Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com
FNArena is proud about its track record and past achievements: Ten Years On
Click to view our Glossary of Financial Terms
CHARTS
For more info SHARE ANALYSIS: AMP - AMP LIMITED
For more info SHARE ANALYSIS: CHC - CHARTER HALL GROUP
For more info SHARE ANALYSIS: COH - COCHLEAR LIMITED
For more info SHARE ANALYSIS: HLS - HEALIUS LIMITED
For more info SHARE ANALYSIS: IFL - INSIGNIA FINANCIAL LIMITED
For more info SHARE ANALYSIS: INA - INGENIA COMMUNITIES GROUP
For more info SHARE ANALYSIS: MP1 - MEGAPORT LIMITED
For more info SHARE ANALYSIS: NCK - NICK SCALI LIMITED
For more info SHARE ANALYSIS: NXT - NEXTDC LIMITED
For more info SHARE ANALYSIS: REA - REA GROUP LIMITED
For more info SHARE ANALYSIS: RIO - RIO TINTO LIMITED
For more info SHARE ANALYSIS: SDF - STEADFAST GROUP LIMITED
For more info SHARE ANALYSIS: SUN - SUNCORP GROUP LIMITED