The Overnight Report: Oil Falls, Tech Recovers

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Commentary around a de-escalation in Iran/US conflict sent oil prices sharply lower, while the AI-tech trade was back in focus and rallying higher.

Nvidia shares slipped.

US October CPI is due out tomorrow.

After a positive day yesterday, without support from the banks but  with small cap mining stocks in particular coming to life, the ASX200 futures are indicating a strong start to Tuesday's session.

World Overnight
SPI Overnight	9130.00	+ 96.00	1.06%
S&P ASX 200	9029.70	+ 8.90	0.10%
S&P500	7549.94	+ 173.08	2.35%
Nasdaq Comp	25253.14	+ 673.71	2.74%
DJIA	52389.75	+ 1104.02	2.15%
S&P500 VIX	20.05	– 5.59	– 21.80%
US 10-year yield	4.86	+ 0.01	0.10%
USD Index	101.67	– 0.61	– 0.60%
FTSE100	10782.87	+ 108.93	1.02%
DAX30	26267.19	+ 446.83	1.73%

Good Morning,

The Australian market lifted 8.9 points or 0.1% on Monday, trading off its intra-day low of being down -52.3 points.

At the intra-day high, the index had been up 34.9 points.

Materials led the ASX200 higher, up 2.88%, while InfoTech advanced 0.88%.

Financials, Telco’s and REITs dragged.

Barrenjoey on ANZ Bank ((ANZ)):

“ANZ 2H26 Cash NPAT was a 1% beat to consensus, with softer revenue, better costs and lower bad debt charge. CET1 missed at 11.99% and CP/CRWA was run down to 1.20%.

“Revenue -1.4% below cons. NIM -2bp miss, flat H/H at 1.53%. Impacted by asset competition and funding mix. This offset a +5bp benefit from its replicating portfolio (RP). Non-interest income broadly in line. Guiding to 4bp of NIM benefit from the RP in FY27E and flat NIM in 1H27E.

“Operating expenses better than consensus and ANZ is now guiding to flat FY27E costs.

“Bad debt charge low at 7bp. Collective provision coverage to credit RWA declined -2bp to 1.20%. Non-performing exposures to total credit exposures increased +2bp in last quarter to 0.57%. Mortgage arrears picking up off a low base.

“CET1 ratio low at 11.99%, given growth in IRRBB. APRA Leverage Ratio also fell to 4.3%.

“Overall, result is broadly in line. Costs the highlight. However, with the economy slowing and arrears rising we expect consensus to push up Credit Losses into FY27E. There will also be questions on capital.”

Macquarie on Propel Funeral Partners ((PFP)):

“PFP’s 1Q27 trading update revealed softer revenues, due to continued weak industry volumes and FX headwinds.

“EBITDA margin remained resilient at 27.0%, slightly improved vs pcp at 26.8%, highlighting robust cost control.

“With volumes and margins likely to improve from here, coupled with ~$170m of funding capacity for acquisitions, we reiterate our Outperform rating.”

On the calendar today Life360 ((360)) offers a 3Q earnings report and Cochlear ((COH)) organises an Investor Briefing.

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

The Rally Was the Broadest in Nearly a Year

More than 430 stocks in the S&P500 were higher late in the day, according to Dow Jones Market Data.

Industrials led every other sector, with GE Vernova and Eaton near the top, and that’s usually a sign investors feel good about the economy.

Smaller companies in the Russell 2000 did even better than the big indexes.

The Dow is back above its Election Day close, while the S&P500 and Nasdaq are still a little short.

Chip Stocks Rallied Without Nvidia

Nvidia was the only one of the 30 stocks in the PHLX Semiconductor index to fall today, on a day the iShares Semiconductor ETF had its best session since July.

Nvidia’s board opened an investigation after CEO Jensen Huang admitted to an affair with a woman U.S. intelligence officials believe is a Chinese spy.

The stock has now lost about -US$1.5 trillion in market value since its Oct. 6 peak.

The Journal’s Heard on the Street column expects tighter limits on chip sales to China out of this, which would leave more chips for U.S. buyers like Amazon and Microsoft.

Oil Fell to Its Lowest Since August

U.S. crude traded below US$87 a barrel after President Trump said over the weekend that new strikes on Iran were “highly unlikely.”

Energy was the only S&P500 sector in the red, adding to last week’s losses.

Trump was set to meet Qatar’s prime minister today, and Qatar is one of the countries trying to broker a deal with Tehran.

Oil is trading like a deal is coming, though nothing has been signed yet.

ANZ Bank, Australian Morning Focus, extract

Equities rebounded strongly as buying interest returned and lower oil prices provided support after President Trump said it was “highly unlikely” he would order extensive new strikes on Iran, provided it signs a “very strong agreement”.

The S&P500 was up 2.35%, the Dow Jones up 2.18% and the Nasdaq up 3.14%.

The EuroStoxx50 rose 1.9%, and the FTSE100 rose 1.0%.

The yield on the US 10y note rose 1bp to 4.86%.

Oil prices fell, with WTI down -6.1% to US$85.7/bbl. Gold rose 0.1% to US$4,128.3/oz.

The NY Fed’s survey of inflation expectations held steady in October, with the 1y measure unchanged at 3.9%. Inflation uncertainty at that horizon eased to 2.7% from 3.1%.

Medium- to longer-term inflation expectations were also stable. The 3y measure was unchanged at 3.3%, while the 5y measure was unchanged at 3.0%.

US CPI in focus. Based on the Bloomberg consensus, October CPI (out 12:30am AEDT tomorrow) is expected to show headline and core inflation rising 0.3% m/m and 0.2% m/m, respectively.

As the Bureau of Labor Statistics was unable to produce a complete October 2025 CPI owing to the government shutdown, annual (y/y) comparisons will not be published. Nevertheless, inflation appears to be firming following a period of disinflation during the spring and early summer.

Supercore CPI rose 0.42% m/m in September, following a 0.51% m/m rise in August. Over the previous five months, it averaged just 0.18% m/m.

The rise in services inflation excluding shelter is a concern, as the equivalent supercore component accounts for nearly half of the PCE deflator, the Fed’s preferred inflation gauge. We thought there were strong arguments for the FOMC to raise rates last month and are even more convinced now, given that the data since the October meeting have been uniformly strong.

GDP data show activity accelerated in Q3 (3.4% saar), the October labour market report points to renewed momentum (NFP up 165k), and September PCE inflation firmed, with some evidence that market-determined inflation pressures are intensifying (0.34% m/m).

If the Fed is truly focused on returning inflation to target in a timely fashion, we do not think it can “skip” again next month.

The Impact of Higher Rates on the Household – Is this time different? Ashwin Clarke, CBA extract

• The direct impact of higher rates on households is slightly lower than hiking cycles prior to the pandemic.
• This is primarily because of strong growth in household interest-sensitive assets (mostly deposits).
• Many mortgagors also did not reset their mortgage payments in 2025 when rates were lowered, which will reduce the impact of higher rates.
• Strong balance sheets in aggregate will also allow many households to support their spending more than previously even if their incomes deteriorate.
• Added to this, very rapid housing price growth in mid-sized capitals until early 2026 will reduce the near term drag from lower housing wealth on spending despite larger home price falls now expected
• That said, the potency of other channels, in particular the exchange rate channel, is likely broadly similar to past cycles.
• And we expect monetary policy, combined with other headwinds facing the economy, to slow the economy from here.
• This will be at least partially offset by structural forces, in particular continued supply shocks and the AI and renewables capex boom.

Nvidia Affair, A Rare Buying Opportunity? Nigel Green, deVere, extract

Nvidia CEO’s affair, which is on course to wipe as much as -US$250bn off the world’s most important AI company, is likely to be seized on by savvy investors as a rare chance to buy into the chip giant at a discount.

This is, for now at least, a personal scandal, and the market is pricing it like a corporate crisis.

A fall of this size, around -5%, is likely to knock somewhere between -US$200bn and -US$250bn off Nvidia’s value, yet nothing about this weekend’s news changes how many chips it sells or how badly the world needs them.

Savvy investors can tell the difference between a reputational storm and a broken business.

They’ll see lower entry points into the company at the heart of the AI boom, and I expect plenty of them to act on it.

Huang has admitted the affair in a memo to staff. The board says it has no reason to believe national security or company secrets were compromised, while stressing its inquiry will examine all available information.

The board’s position matters enormously here. If the investigation backs it up, the market is likely to move on quickly, and the discount on offer today will start to look like a gift.

Investors buy dips like this when the fundamentals haven’t moved. Here, they haven’t.

The scandal lands on a stock that was already bruised. Nvidia had fallen -25% from its October 6 peak, erasing roughly -US$1.4 trillion in market value despite booming revenue growth, after a brutal tech rout in which nearly -US$450bn was wiped from its value in a single session as investors reassessed AI infrastructure spending amid fresh regulatory concerns.

On some measures, its forward price to earnings ratio has dropped to around 13 times.

The pullback we’ve seen since October was driven by worries about AI spending and regulation. The affair adds a layer of noise on top, and noise is what creates opportunity.

Nvidia will report earnings on November 17. The results are likely to matter far more than anything in the tabloids.

If demand for its chips stays as strong as we believe it will, attention is likely to swing straight back to earnings, and investors who held their nerve will be glad they did.

None of this means ignoring the risks. Huang is the driving force of the company and there’s no obvious successor in place. Washington will push harder on Nvidia’s dealings with China.

If the probe finds anything more serious, the selloff could deepen, so investors need to weigh these risks carefully.

Huang has had support from the White House, with President Trump describing him as a “fine person”, Chief executives’ private lives have made the front pages before, and their companies have kept on growing.

The world’s appetite for computing power is likely to keep climbing for years. Data centres will keep being built, and the chips inside them still have to come from somewhere.

Long after this episode fades, Nvidia is likely to remain at the centre of the biggest technology shift of our lifetimes, and the investors who saw past the gossip could be very well rewarded.

The Pulse of the Market, Lori Calvasina, RBC Capital extract

On balance, our sentiment and valuation work tells us the US equity market is at a crossroads.

If the midterm results end up being a shock that simply requires some repricing and repositioning, the low will probably be in before too long if it isn’t already.

If we have a significant challenge to the earnings and economic outlook looming, that is something the US equity market still needs to price.

In our Tiers of Fear framework, we point out that in the post GFC environment, Tier 2 drawdowns of -14%-20% are best understood as growth scares, when investors fear a recession that doesn’t materialize.

Back in March when stocks were trending lower as the Iran war began, we advised investors that as they approached the lower run of tier 1 they needed to have honest conversations with themselves about whether a recession was a genuine risk, and that if the answer was no, the stock market correction was likely almost done.

We think that is also how investors should assess the current situation.

From our seat, we think the current pullback is likely to stay in tier 1 territory (i.e. the S&P 500 is unlikely to fall below 7000) but are keeping a close eye on the risk factors that might push us into tier 2.

The moment of truth we suspect will come in early calendar 1Q in the next reporting season when companies issue year ahead outlooks.

Earnings Sentiment Needs To Stabilize For P/E’s To Stop Falling

As noted above, we think fundamentals still matter. As we’ve highlighted before, major drawdowns (those that go beyond -10%) tend to involve real damage to GDP, capex indicators, the labor market, or earnings and corporate profitability (including sharp downward revisions cycles).

Earnings sentiment also matters to valuations as a rule. When the rate of upward EPS estimate revisions for the S&P500 is rising, forward P/E multiples for the index tend to rise as well. When this gauge of earnings sentiment is falling, however, P/E’s tend to come down.

We’ve been seeing a deceleration in the rate of upward EPS estimate revisions in recent months for the S&P500, its biggest market cap names, and the rest of the index.

The good news is that this stat has stopped trending lower for the S&P500 broadly in our latest update.

The bad news is that company commentary may stay subdued until mid-January when year ahead outlook season begins.

Policy uncertainty could also keep a lid on sell-side analyst excitement on the earnings front until details on the agendas from Governors (what they want to do) and Congress (both what they can do and what they want to do) become clearer.

One client observed to us in recent days that their read of comments out of Texas suggested data center builds would be more expensive and slower going forward but would not stop.

Another noted to us that they thought the AI capex/policy story unfolding had more of a potential to impact 2028 EPS than 2027 EPS.

We tend to agree with both ideas and, zooming out, think that the AI policy risk to earnings and the economy is a conversation that is just getting started and will be with us well into the new year.

Corporate news in Australia:

• Codan ((CDA)) enters a binding agreement to acquire US-based Eventide Communications for -$244m
• Blackwattle Investment Partners acquires Sydney-based Quest Asset Partners, with its investment team taking over management of two Blackwattle equity funds
• Service Stream ((SSM)) acquires Programmed from Japan’s PERSOL for $975m, supported by a $475m equity raising comprising a $219m placement and $256m entitlement offer
• Goodman Group ((GMG)) and Digital Realty secure a 9.9% stake in NextDC ((NXT)) for approximately $693m; NextDC confirms no formal takeover proposal has been received
• Ashurst Perkins Coie forecasts fiercer Australian M&A auctions in 2027 as buyers compete for fewer targets, following a -61% decline in completed deal value to $25.7bn in 1H26
• MA Financial ((MAF)) subsidiary Redcape Hospitality acquires Orange’s Hotel Canobolas for approximately $40m in the year’s largest regional pub transaction
• Lendlease ((LLC)) faces a setback after the proposed sale of its 17.6% stake in Italy’s Milano Santa Giulia North project collapses, leaving six weeks to secure another buyer or face an additional $160m in costs
• Silver Lake explores a $1.5bn sale of Ticketek owner TEG Group through MA Moelis ((MAF)), approaching global buyers including CTS Eventim and AXS, amid a reported $1bn debt burden
• Pengana Capital ((PCG)) considers selling or consolidating smaller non-core funds and businesses while retaining its core listed equities, private equity and private credit operations
• Next Capital agrees to sell a 45% stake in TMX Transform to Quadrant Strategic Equity in a transaction valuing the supply chain consultancy at up to $400m
• Atlassian co-founder Scott Farquhar establishes a plan to sell up to 3.39m shares worth over US$500m, while Mike Cannon-Brookes plans to purchase up to US$250m
• ASIC launches a formal investigation into Bathla Group’s conduct before its collapse and warns of ongoing disclosure and transparency shortcomings across private credit funds
• Brisbane-based AAM seeks to raise $150m for a timber investment platform while exploring an exit from its $160m poultry fund
• Employment Hero rules out an ASX listing as annual recurring revenue rises $100m to $400m, while Seek’s ((SEK)) approximately 18% stake remains up for sale through Goldman Sachs

On the calendar today:

-AU Oct NAB business survey

-JP Sep Balance of payments

-JP Sep Trade balance

-CH Oct Trade balance

-US Oct Average hourly earnings

-US Oct CPI

-US Oct NFIB small business optimism

-LIFE360 INC ((360)) 3Q earnings report

-ABACUS GROUP ((ABG)) AGM

-ASPEN GROUP LIMITED ((APZ)) AGM

-COCHLEAR LIMITED ((COH)) investor briefing

-MESOBLAST LIMITED ((MSB)) AGM

-NATIONAL AUSTRALIA BANK LIMITED ((NAB)) ex-div 85.00c (100%)

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Spot Metals,Minerals & Energy Futures
Gold (oz)	4141.45	+ 71.04	1.75%
Silver (oz)	53.34	+ 1.46	2.81%
Copper (lb)	6.36	+ 0.14	2.25%
Aluminium (lb)	1.41	0.00	0.00%
Nickel (lb)	7.30	– 0.00	– 0.02%
Zinc (lb)	1.71	0.00	0.00%
West Texas Crude	87.05	– 3.78	– 4.16%
Brent Crude	92.76	– 5.56	– 5.66%
Iron Ore (t)	92.71	+ 0.01	0.01%

The Australian share market over the past thirty days…

Index	09 Nov 2026	Week To Date	Month To Date (Nov)	Quarter To Date (Oct-Dec)	Year To Date (2026)
S&P ASX 200 (ex-div)	9029.70	0.10%	1.37%	2.74%	3.62%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
ASX	ASX	Downgrade to Neutral from Buy	UBS
AVH	Avita Medical	Upgrade to Hold from Sell	Morgans
CIP	Centuria Industrial REIT	Downgrade to Neutral from Buy	UBS
CSL	CSL	Downgrade to Hold from Buy	Morgans
CTD	Corporate Travel Management	Upgrade to Buy from Neutral	UBS
GMG	Goodman Group	Upgrade to Buy from Accumulate	Morgans
NXT	NextDC	Downgrade to Accumulate from Buy	Morgans
QAN	Qantas Airways	Downgrade to Hold from Accumulate	Morgans
REA	REA Group	Downgrade to Accumulate from Buy	Morgans
RFF	Rural Funds	Downgrade to Neutral from Buy	UBS
SCG	Scentre Group	Downgrade to Equal-weight from Overweight	Morgan Stanley
WDS	Woodside Energy	Upgrade to Accumulate from Hold	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)

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