The Overnight Report: CPI Up, Markets Down

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US markets traded lower as a higher-than-expected US October CPI print sent the US 10-year yield higher, tickling the 5% level.

The espionage spy drama besetting Nvidia's Jensen Huang continued with more leaks and media reports. The stock continues to weaken.

The Australian market rallied strongly yesterday, albeit closing off its intra-day high.

ASX200 futures on Wednesday morning are pointing to a weaker start.

World Overnight
SPI Overnight	9121.00	– 40.00	– 0.44%
S&P ASX 200	9129.00	+ 99.30	1.10%
S&P500	7520.93	– 29.01	– 0.38%
Nasdaq Comp	25065.88	– 187.26	– 0.74%
DJIA	52231.89	– 157.86	– 0.30%
S&P500 VIX	19.49	– 0.43	– 2.16%
US 10-year yield	4.98	+ 0.12	2.45%
USD Index	102.26	+ 0.59	0.58%
FTSE100	10751.59	– 31.28	– 0.29%
DAX30	26347.45	+ 80.26	0.31%

Good Morning,

Yesterday, the ASX200 rallied 99.3 points or 1.1% to 9129.00 with an across-the-board rally, with REITs and Materials leading the gains. Consumer staples lagged.

The market is up 5.6% and the highest in two months since October 1.

Citi on Aspen Group ((APZ)):

“Aspen Group’s 2026 AGM reinforced our conviction in the stock. Management reiterated FY27 guidance of 26.1 cents pre-tax EPS (+20%) and distributions of 12 cents (+9%), with 83% of FY27 development profit guidance already locked in via settlements and contracts on hand.

“The investment thesis is built on deliberate, compounding foundations: a 23% EPS CAGR since FY19, and an approved development pipeline that has nearly doubled to ~2,100 lots in the calendar year — representing 8 years of supply at current sales rates, underpinned by a land bank worth ~$100m against an expected Gross Development Value of ~$1.4bn.

“Aspen continues to demonstrate strong resilience and superior underlying EPS and NTA growth, underpinned by careful project selection, rigorous feasibility analysis on acquisitions and the consistent unlocking of value through planning approvals and execution.”

Macquarie on Life360 ((360)):

“Long-term thesis intact, and valuation attractive at 2Y fwd EV/ EBITDA, but 4Q26 earnings catalyst unlikely. Downgrade to Neutral.

“Whilst 360 retains significant monetisation optionality from AI, web billing and favourable mix shift to higher price plans, we will include these in forecasts on evidence of execution.

“Moreover, despite limited 4Q26 EPS risk, FY26 EBITDA midpoint was unchanged on Advertising underperformance. Recent leadership changes, continued investment & lower gross margins lead us
to a more conservative view, again waiting for improved execution and sustained margin expansion.

“Although advertising remains a growth option, changing leadership rarely represents a positive near-term outlook. In a short earnings duration market, and post recent upgrades to subscription and beats, churn risk in 4Q26 leads us to a more conservative view in the near-term.”

On the calendar today, a plethora of AGMs and CommBank’s ((CBA)) 1Q27 trading update.

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 10-Year Treasury Yield Is Back Above 5 Percent

The 10-year yield climbed back above 5 percent after this morning’s inflation report.

The 2-year, which follows where traders think the Fed is headed, rose about 0.2 points to 4.77 percent.

The Wall Street Journal says that’s close to its biggest one-day climb in 19 months.

Higher yields weighed on nearly everything else, with the Nasdaq leading stocks lower, gold and bitcoin falling, and the dollar rising.

Nvidia’s Scandal Now Has A Dollar Figure

The Information reported that Jensen Huang’s relationship with Alice Huang, a suspected Chinese spy, helped Chinese companies get at least US$7.5 billion of Nvidia chips since 2023.

Nvidia fell for a second day and has lost more than -US$365 billion in market value since the affair came out.

The stock now trades at 11.66 times the earnings expected over the next 12 months, it’s cheapest since October 2011, per Dow Jones Market Data.

Microsoft passed it in market value around midday, roughly US$4.04 trillion to US$4.03 trillion.

More Households Are Falling Behind On Payments

About 5 percent of U.S. household debt was behind on payments in the third quarter, the New York Fed said today, the highest share in nearly a decade.

Late auto loans and mortgages drove most of the increase, while credit cards improved a little.

Grocery prices rose another 0.4 percent in October, and food makers plan more increases.

Campbell’s is raising prices on about 60 percent of what it sells, and Kraft Heinz will raise prices across its lineup in 2027.

CBA Economics: Daily Alert, Harry Ottley, extract

Hot US inflation increases Fed rate hike bets

US sharemarkets were lower in late trade on Tuesday after hotter-than-expected US inflation and hawkish Fed commentary revived expectations of more aggressive monetary policy tightening.

The S&P500 was down -0.38% and the Nasdaq -0.74%, while US Treasury yields rose sharply, led by a 16bp increase in the 2-year yield.

European sharemarkets were mixed as lower oil prices supported the region, while energy and mining weakness weighed on the UK market.

The EuroStoxx50 rose 0.6%, the DAX 0.3% and the CAC 40 0.6%, while the FTSE100 fell -0.3%.

In Australia, consumer and business sentiment weakened further on Tuesday. The Westpac-Melbourne Institute Consumer Sentiment Index fell -2.7% to 78.2 in November, a four-year low, with the decline centred on a sharp deterioration in the near-term economic outlook; more than 70% of consumers expect mortgage rates to rise over the next year.

The NAB Business Survey showed confidence fell -1pt to -15 and conditions eased -1pt to -2 in October. Forward orders dropped -11pts to -12, the weakest result since the pandemic, while capital expenditure intentions also declined.

Our CommBank Wage and Labour Insights showed annual wage growth eased to 3.2% in October from 3.3%, while quarterly growth held at 0.8%. The timelier monthly annualised measure slowed to 3.1%, and our Labour Insights series pointed to 18k jobs added in October.

In US economic data, headline CPI rose 0.4%/mth in October, above our 0.3% forecast. Core CPI rose 0.3%/mth, in line with our forecast but above market expectations. Annual rates were not published because October 2025 data were unavailable following last year’s government shutdown.

The stronger inflation print reinforced expectations for further Fed tightening. Governor Christopher Waller backed a December hike and said a 50bp move could be appropriate.

US government bond yields rose sharply as stronger inflation and hawkish comments from Fed officials lifted rate-hike expectations. The 2-year yield increased 16bp to 4.73%, while the 10-year yield rose 9.9bp to 4.98%.

Currencies:

The US dollar index rose 0.6% to 102.23 as US yields climbed. The Australian dollar fell -0.9% to USD68.66 cents as the stronger US dollar outweighed support from lower oil prices.

Global oil prices fell further as US-Iran diplomatic efforts reduced the geopolitical risk premium. Brent futures fell -0.7% to US$91.93 a barrel and WTI fell -0.6% to US$86.34. Tighter US monetary-policy expectations also added to demand concerns.

Gold futures fell -1.9% to US$4,037.40 an ounce as the stronger US dollar and higher yields weighed on bullion. Iron ore futures edged -0.2% lower to $US92.54 a tonne.

Looking Ahead:

In Australia, Q3 Lending Indicators are due today. We expect new housing lending values to decline by -6.8%/qtr, following a -5.2%/qtr fall in Q2, as higher interest rates, falling dwelling prices and weak housing turnover weigh on demand.

Macro Talking Points from Benoit Anne, MFS Investment Management

Central bank policy: tightening momentum continues

Last week, global central banks sent a clear message: the fight against inflation is not over. The Bank of England raised its policy rate by 25 basis points to 4%, its first hike in over three years, with one Monetary Policy Committee member pushing for a larger move.

The BoE’s Chief Economist called the decision “pre-emptive”, with inflation approaching 5%, and markets lifted the odds of a December follow-up from 30% to about 50%.

Australia’s RBA raised its cash rate by 25 basis points to an 18-year high of 4.85%, its fifth hike this year.

ECB Governing Council member Zigman cited a “rather big chance” of a December hike, with markets pricing in about 20 basis points of further tightening.

In the US, San Francisco Fed President Daly said, “my expectation is we’re going to have to tighten policy further”, while Cleveland Fed President Hammack called for a restrictive stance and more frequent moves to avoid falling behind.

So, what does this mean? Higher for longer is now the base case, and tightening is broadening just as US labour markets remain resilient.

Duration risk remains elevated, and portfolios with short-duration positioning and floating-rate exposure are likely to be better insulated (Contribution from Zach Knope)

Software déjà vu?

Is the AI infrastructure sell-off following the same script as software?

Earlier this year, concerns around AI disruption drove widespread weakness across software, with the sector falling -34% from its October 2025 peak, and the market initially treated much of the industry alike.

As the dust settled, however, differences in business models, competitive positions and valuations became more visible. We may now be seeing something similar in AI infrastructure, where the SOX has fallen -36% from its May 2026 high.

Yet the bottom-up perspective from our technology team is more nuanced. Risks around funding and regulation have increased, but underlying demand and supply-chain indicators remain broadly constructive.

In other words, the sell-off has changed valuations more than it has changed the team’s fundamental view. The lesson from software was not that the initial concern was wrong, but that the market eventually became more discriminating.

AI infrastructure could follow a similar path. The issue is not that growth has disappeared, as demand remains solid and earnings have so far held up well, but that the pace of growth may be slowing and expectations are being reset.

As that happens, investors may begin to distinguish more carefully between earnings tied to the pace of capex and those underpinned by pricing power and recurring revenue.

Overall, volatility may be creating a more selective opportunity set, less about whether to own AI and more about identifying where fundamentals, expectations and valuations have become misaligned, with greater emphasis on quality and the durability of earnings. (Contribution from Ross Cartwright)

Blue wave, red screens

Thursday’s reaction to the Democratic sweep showed that markets now see politics as a bigger risk to the AI trade. The SOX fell more than -12%.

The binding constraint on AI may be shifting from demand for compute to the ability to build the infrastructure behind it. With Democrats controlling Congress and winning governorships in key data centre states such as Texas, Georgia and Ohio, moratoriums or tighter restrictions on new projects are now a real possibility.

Stricter permitting, closer scrutiny of power and water use, or rules forcing data centres to cover more of their infrastructure costs could slow deployment and erode returns. That challenges a core assumption in AI valuations: that hundreds of billions of dollars in planned capex will convert smoothly into new capacity.

So what are the key takeaways for investors? AI demand appears to remain strong, but political risk will widen the gap between winners and losers.

Companies that depend on rapid, capital-intensive expansion look most exposed. Those with existing infrastructure, strong free cash flow and less reliance on the capex cycle should prove more resilient.

The AI trade is not broken, but it may now have to be priced differently and approached with greater selectivity. (Contribution from Kelly Garrett)

US: AI is fuelling a start-up boom, not a hiring boom, Oxford Economics, extract

• Business applications are running near record highs, but only one in 15 includes plans to pay wages, half the pre-pandemic share. In contrast to the boom in new firms after the pandemic, the payoff for jobs and productivity appears modest.
• The number of new business applications with plans to pay wages has fallen sharply, while those without have surged, especially in information, the sector most exposed to AI. The rise in new businesses is mostly a story of solo entrepreneurs.
• It’s still early and the underlying technology is evolving. If we see evidence of a significant number of new firms achieving large revenues with few or no employees, that would point to greater disruption and a bigger productivity boost than we assume in our baseline.
• For now, the boom is adding to the number of businesses, not to labor demand. This increases the evidence that there’s little reason for the Federal Reserve to worry about an overheating labor market.

Corporate news in Australia:

– AVID Property Group matches Warburg Pincus’ improved $5.60 per share takeover offer for Ingenia Communities ((INA)), with Warburg retaining due diligence access until 13 November

– Royal Bank of Canada agrees to acquire Yarra Capital Management, which manages around $18bn in assets, subject to regulatory approval

– Quadrant Private Equity prepares a $500m acquisition of Vision-ary, more than doubling the size of its Carlisle Health radiology business and expanding its presence across Queensland, NSW and Victoria

– Stockland ((SGP)) and MA Financial ((MAF)) emerge as frontrunners to acquire Cerberus-backed retirement living operator Lincoln Place

– Warburg Pincus and EQT submit final bids for Apax Partners’ $1.5bn sale of Pickles Auctions, with strategic buyer Copart potentially re-entering the process

– Igneo Infrastructure Partners and Palisade-backed Quantem considers a bid for ExxonMobil’s New Zealand fuel terminals business, valued at up to NZ$1bn

– Receivers begin selling Sydney development sites owned by collapsed developer Bathla, initially listing two properties with another four expected to follow as creditors seek to recover debts from the -$3.4bn collapse

– Generation Development Group ((GDG)) explores acquisitions of financial planning businesses within its existing client network as part of its growth strategy

– Auric Mining ((AWJ)) launches a $13m equity raising to fund the acquisition of WA’s Iron Maiden gold project and accelerate development of existing assets, with Canaccord Genuity, Taylor Collison and MA Moelis ((MAF)) managing the raising

– Chemist Warehouse co-founder Sam Gance sells 86.8m Sigma Healthcare ((SIG)) shares at $2.88 each in a $250m block trade, with further selldowns possible as founder escrow restrictions expire

– Sydney-based semiconductor developer Morse Micro prepares for a potential ASX IPO in 2027, holding $85m in cash despite an FY26 net loss of $45m and commercial revenue of $1.9m

– Anthropic targets a fully diluted valuation of up to US$1.4trn in its proposed IPO, seeking to raise up to US$90.4bn through a share offering and private placement backed by major technology companies including Google, Nvidia, Microsoft and TSMC

– Macquarie Group’s ((MQG)) asset management arm and Singapore’s GIC explore selling their combined one-third stake in Philippine geothermal energy company Energy Development Corp, potentially valued at US$2bn, with Goldman Sachs appointed to advise on the review

On the calendar today:

-AU 3Q Lending

-JP Oct Machine tool orders (prelim)

-US Public Holiday

-ABACUS GROUP ((ABG)) AGM

-ADAIRS LIMITED ((ADH)) AGM

-AMCOR PLC ((AMC)) AGM

-BEACH ENERGY LIMITED ((BPT)) AGM

-COMMONWEALTH BANK OF AUSTRALIA ((CBA)) Qtrly update

-DIGICO INFRASTRUCTURE REIT ((DGT)) AGM

-DOMINO’S PIZZA ENTERPRISES LIMITED ((DMP)) AGM

-DOWNER EDI LIMITED ((DOW)) AGM

-FLIGHT CENTRE TRAVEL GROUP LIMITED ((FLT)) AGM

-GROWTHPOINT PROPERTIES AUSTRALIA ((GOZ)) AGM

-JANISON EDUCATION GROUP LIMITED ((JAN)) AGM

-MACQUARIE GROUP LIMITED ((MQG)) ex-div 325.00c (35%)

-NETWEALTH GROUP LIMITED ((NWL)) AGM

-PEXA GROUP LIMITED ((PXA)) AGM

-RESMED INC ((RMD)) ex-div 6.56c (0%)

-VAULT MINERALS LIMITED ((VAU)) AGM

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

Spot Metals,Minerals & Energy Futures
Gold (oz)	4030.71	– 110.74	– 2.67%
Silver (oz)	51.53	– 1.81	– 3.39%
Copper (lb)	6.25	– 0.11	– 1.73%
Aluminium (lb)	1.43	+ 0.01	0.97%
Nickel (lb)	7.34	+ 0.04	0.58%
Zinc (lb)	1.70	– 0.00	– 0.13%
West Texas Crude	86.33	– 0.72	– 0.83%
Brent Crude	91.95	– 0.81	– 0.87%
Iron Ore (t)	92.54	– 0.17	– 0.18%

The Australian share market over the past thirty days…

Index	10 Nov 2026	Week To Date	Month To Date (Nov)	Quarter To Date (Oct-Dec)	Year To Date (2026)
S&P ASX 200 (ex-div)	9129.00	1.20%	2.48%	3.86%	4.76%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
ANZ	ANZ Bank	Downgrade to Neutral from Buy	Citi
		Downgrade to Equal-weight from Overweight	Morgan Stanley
		Downgrade to Lighten from Hold	Ord Minnett
ASX	ASX	Downgrade to Neutral from Buy	UBS
AVH	Avita Medical	Upgrade to Hold from Sell	Morgans
CDA	Codan	Upgrade to Buy from Accumulate	Ord Minnett
CTD	Corporate Travel Management	Upgrade to Buy from Neutral	UBS
DNL	Dyno Nobel	Upgrade to Accumulate from Hold	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
SCG	Scentre Group	Downgrade to Equal-weight from Overweight	Morgan Stanley
		Downgrade to Hold from Accumulate	Ord Minnett
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.)

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