The Overnight Report: AI Trade Roars Back

This story features COMMONWEALTH BANK OF AUSTRALIA, and other companies.
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Neocloud, Coreweave provided further impetus to the AI-trade lifting Nasdaq higher again.

The Australian market rallied for a third straight day yesterday. ASX200 futures are pointing to a weaker start.

World Overnight
SPI Overnight	9156.00	– 37.00	– 0.40%
S&P ASX 200	9153.20	+ 24.20	0.27%
S&P500	7619.38	+ 98.45	1.31%
Nasdaq Comp	25466.19	+ 400.31	1.60%
DJIA	52486.49	+ 254.60	0.49%
S&P500 VIX	17.61	– 1.85	– 9.51%
US 10-year yield	5.00	+ 0.02	0.30%
USD Index	102.93	+ 0.67	0.66%
FTSE100	10835.47	+ 83.88	0.78%
DAX30	26662.77	+ 315.32	1.20%

Good Morning,

On Wednesday, the ASX200 rallied 24.2 points or 0.27% to 9153.20 led by InfoTech up 1.52%.

Gains were broad based across all sectors ex-Financials with CommBank ((CBA)) dragging on the index (-1.5%) after a slightly disappointing quarterly update.

Morgan Stanley on CommBank ((CBA)):

“Key takeaways: There were no surprises in the 1Q27 trading update, as key operating trends and balance sheet metrics were broadly in line with our forecasts.

“We see little room for error given: (1) the operating environment is getting worse; (2) we assume above-peer revenue growth and a loan loss rate of ~12bp in FY27; (3) the capital buffer is modest; and (4) the P/E multiple of ~25x is ~4pts above the 5-yr post-COVID average. We are UW.”

Moelis on FDC Consolidated ((FDC)):

“FDC has upgraded FY27 revenue and normalised EBIT guidance by 5-10%, while maintaining EBIT margins at 5.3%. This upgrade reflects execution to date and new wins, with Work in Hand increasing to ~$2.85bn at 31-Oct (+14% vs $2.5bn at 30 Jun-26).

“Original FY27 prospectus revenue forecast of $1.9bn is now fully supported by revenue delivered to date and secured work scheduled for the remainder of FY27.”

Several companies are announcing financial results today, including Xero ((XRO)), Aristocrat Leisure ((ALL)), GrainCorp ((GNC)) and Orica ((ORI)),

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

CoreWeave Is Charging More For Its Older Chips

CoreWeave $CRWV rents out AI chips, and it says demand is 10 times the computing power it has left to sell through 2027.

It raised rental prices twice last quarter, and rates on its older chips rose 30 to 50 percent from the quarter before.

A big worry about AI spending has been that these chips lose their value fast, and rising rents on old ones cut against it.

Memory chip makers and data center power stocks rose with CoreWeave.

Rate Hike Bets Lifted The Dollar To A 19-Month High

The bond market was closed for Veterans Day, so bets on higher rates showed up in the dollar, which hit a 19-month high. Gold slipped under US$4,000.

Mortgage News Daily put the average 30-year rate at 7.30 percent on Tuesday, its biggest one-day increase in more than a month.

Traders put the odds of a December hike near 90 percent, so I don’t expect borrowing costs to ease soon.

Everyday Investors Are Lining Up For Anthropic

Anthropic plans to go public next week at up to US$1.4 trillion, and Bloomberg reports orders are several times the shares on offer.

Vanda Research estimates everyday investors could put a record $250 million into the stock on its first day.

That’s more than double the US$118 million SpaceX $SPCX drew in June.

It’s worth remembering that SpaceX still trades below its first-day opening price, and Cerebras $CBRS is at about half its IPO price.

ANZ Bank, Australian Morning Focus, extract

Equity markets rallied, led by a rebound in technology stocks on an otherwise quiet day with the US Treasury market closed for the Veterans Day public holiday.

The S&P500 was up 1.3%, and Nasdaq was up 1.6%.

The EuroStoxx50 ended its session up 1% while the FTSE100 gained 0.8%.

The yield on the US 10yr note was unchanged at 4.99%.

WTI dropped -0.4% to US$86.3/bbl. Gold was weaker at US$3,987/oz.

US:

MBA mortgage applications rose 6.2% in the week ended 6 November, the largest weekly gain since June. The pickup in activity coincides with falling mortgage rates, with the 30yr fixed rate having fallen around 30bp in the past month to around 7.2%.

Nonetheless, the level of activity remains historically weak. In the US, mortgages cannot be transferred from one property to another, so many people are staying in their current homes with low 30yr fixed interest rates rather than moving and paying a higher rate.

Eurozone:

While recent data in the US suggest the Fed may be falling behind the curve, in Europe the path for monetary policy in 2027 remains highly conditional on geopolitical developments. There has been a raft of ECB speakers in recent days, strongly signalling a 25bp rate hike at the upcoming December meeting.

Looking ahead to 2027, policymakers’ guidance has been limited. Unlike the emerging risk of demand-pull inflation in the US, which may warrant a more forceful monetary policy response, there remains scant evidence of energy pass-through into underlying inflation in Europe.

The ECB’s pre-emptive monetary policy response in 2026 has proved successful in dampening the risk of second-round inflation impacts without undermining growth. But with the monetary policy stance set to become mildly restrictive in 2026, and financial conditions having tightened further amid emerging stress in sovereign debt markets, the bar has risen for further rate hikes in 2027.

If de-escalation in the Middle East continues, our base case is that December will be the ECB’s last rate hike this cycle. Monetary policy divergence between the US and Europe looks set to grow in 2027.

Resilient labour market and sticky inflation put pressure on the Fed to hike further in 2027, Bierina Uruci, T. Rowe Price, extract

-October core CPI came in at 0.3% month-on-month, above consensus expectations of 0.2%. Over the past three months, inflation momentum has picked up across both core goods and services.

-Ahead of the report, the distribution of forecasts pointed to upside risks, and we had highlighted potential inflationary pressures from persistent price increases in shelter, transportation and medical services. These risks materialised, while momentum in core goods prices also accelerated to 2.1% on a three-month seasonally adjusted annualised basis, compared with 0.9% year-on-year.

-In my view, this broad-based pickup in inflation highlights two factors. First, higher energy and input prices are increasingly feeding through into core inflation. Second, resilient domestic demand has enabled firms to pass on higher costs, particularly in transportation, recreation and core goods.

-Following the October CPI report, markets are now pricing in one additional rate hike in 2027 compared with the previous day, while short-term yields have risen significantly.

-Taken together, the October payrolls and inflation data reinforce my preference for short duration and my expectation of a higher path for monetary policy rates and inflation in 2027.

-My central thesis since the release of the September CPI and Institute for Supply Management (ISM) / Purchasing Managers’ Index (PMI) data has been that elevated energy and commodity prices are increasingly likely to feed through into core inflation, supported by resilient domestic conditions, particularly employment and economic growth.

-As a result, I believe the FOMC will need to raise rates more in 2027 than markets had previously anticipated.

-Following the latest market moves, expectations are now closer to my baseline scenario of at least three rate hikes in 2027. However, I continue to see risks of a further sell-off at the short end of the yield curve.

Fed Likely To Hike By 50bps in December, Ed Yardeni & Elias Griepentrog, Yardeni QuickTakes

On October 26, we warned that the Fed could surprise markets with a 25bps rate hike at its October meeting. If the Fed chose to pass on doing so because the midterm elections were too close, we predicted a 50bps hike in December.

Two days later, the FOMC voted 10-2 to hold the federal funds rate (FFR) at 3.75%-4.00%, with the two dissenters favoring a 25bps hike.

Yet, in his October 28 presser, Fed Chair Kevin Warsh’s assessment of the economy sounded decidedly hawkish. Economic growth was robust and broadening, the labor market was in good shape, inflation remained above the Fed’s 2% target, and financial conditions were hardly tight.

So why did the Fed stand pat?

Warsh argued that financial conditions had tightened, inflation expectations remained anchored, and stronger productivity growth was allowing the economy to expand without overheating.

With an information-rich period ahead, the Fed saw little reason to rush. We called that decision puzzling, comparing it to someone standing in a room with a fire alarm blaring and smoke pouring under the door, yet insisting on more evidence before calling the fire department.

Now Fed Governor Christopher Waller is sounding the same alarm. Speaking in London on Tuesday, Waller said he would support a 25bps rate hike in December even if inflation improved in October.

However, if October’s core CPI increased by around 0.3% m/m or more, as it had in the previous two months, he argued that a larger move would be warranted.

Specifically, he said that “a 50 basis point hike in the policy rate should be considered at the December meeting.” Waller warned that moving by only 25bps under those circumstances would jeopardize the Fed’s inflation-fighting credibility.

Economic data released since Waller’s remarks suggest that a 50bps hike in December is becoming increasingly likely.

We believe such a move is warranted, as it would bring the FFR back to our estimated neutral range of 4.25%-4.50%.

Corporate news in Australia:

– Brookfield acquires a fully leased 45,780sqm logistics facility in south-west Sydney from Goodman Group ((GMG)) for $203.5m, expanding its Australian industrial property portfolio

– Blackstone submits a revised non-binding $3 per share takeover proposal for IDP Education ((IEL)), with shares jumping 16% as the board considers the offer

– David Jones’ receivers plan to close 19 stores by year-end as part of an urgent restructuring, while former owner Anchorage Capital explores buying back the retailer through a Deed of Company Arrangement

– The ACCC raises preliminary competition concerns over Insurance Australia Group’s ((IAG)) $855m acquisition of RAC WA’s insurance business

– Rio Tinto ((RIO)) shortlists five bidders for its $7bn energy infrastructure portfolio, with Blackstone and Ares Management seeking to acquire the entire portfolio

– Gold Fields may sweeten its $36bn takeover proposal for Northern Star Resources ((NST)), with analysts suggesting a higher cash component could lift the offer to $31–$33 per share despite production setbacks at the Super Pit

– AirTrunk and European Energy Australia partner on a proposed $1.5bn, 800MW renewable energy and battery development in NSW’s Hunter region to support AirTrunk’s planned 550MW Kurri Kurri data centre campus

– Anthropic’s IPO is reportedly multiple times oversubscribed, with strong institutional demand prompting bankers to consider lifting the US$70–US$78 per share offer price and fully diluted valuation beyond US$1.4trn, potentially to US$1.5trn or more

– Anthropic lodges its Australian prospectus, allowing retail investors to participate through local brokers, with CommSec ((CBA)) acting as lead Australian retail broker and Macquarie ((MQG)) also participating, ahead of the proposed Nasdaq listing later this month

– Fifth Estate Asset Management raises a new Australian small-cap fund capped at $250m, targeting undervalued companies and planning to commence investing from 1 December

– Davidson Kempner offers $375m in non-binding debt funding towards InfraBuild’s $750m bond refinancing, with Jefferies Australia advising on the transaction

– MA Financial Group ((MAF)) writes down its $2.2bn secured real estate loan fund by approximately -$40m, or -1.8%, amid weaker property conditions

On the calendar today:

-NZ Sep Net migration

-JP Oct PPI

-UK 3Q GDP (prelim)

-UK Sep Industrial production

-UK Sep Trade balance

-US Oct Existing home sales

-ARISTOCRAT LEISURE LIMITED ((ALL)) FY26 earnings report

-AMCOR PLC ((AMC)) AGM

-ANZ GROUP HOLDINGS LIMITED ((ANZ)) ex-div 83.00c (80%)

-AUB GROUP LIMITED ((AUB)) AGM

-CITY CHIC COLLECTIVE LIMITED ((CCX)) AGM

-CHARTER HALL GROUP ((CHC)) AGM

-COSOL LIMITED ((COS)) AGM

-COMPUTERSHARE LIMITED ((CPU)) AGM

-CORPORATE TRAVEL MANAGEMENT LIMITED ((CTD)) AGM

-CATALYST METALS LIMITED ((CYL)) AGM

-GENESIS MINERALS LIMITED ((GMD)) AGM

-GRAINCORP LIMITED ((GNC)) FY26 earnings report

-GUZMAN Y GOMEZ LIMITED ((GYG)) AGM

-INGHAMS GROUP LIMITED ((ING)) AGM

-ORICA LIMITED ((ORI)) FY26 earnings report

-PALADIN ENERGY LIMITED ((PDN)) Q1 earnings report

-SUNRISE ENERGY METALS LIMITED ((SRL)) AGM

-WAGNERS HOLDING CO. LIMITED ((WGN)) AGM

-XERO LIMITED ((XRO)) 1H27 earnings report

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

Spot Metals,Minerals & Energy Futures
Gold (oz)	3984.23	– 46.48	– 1.15%
Silver (oz)	51.73	+ 0.20	0.39%
Copper (lb)	6.25	0.00	0.00%
Aluminium (lb)	1.42	– 0.00	– 0.32%
Nickel (lb)	7.20	– 0.14	– 1.92%
Zinc (lb)	1.71	+ 0.01	0.37%
West Texas Crude	86.36	+ 0.03	0.03%
Brent Crude	92.51	+ 0.56	0.61%
Iron Ore (t)	92.15	– 0.39	– 0.42%

The Australian share market over the past thirty days…

Index	11 Nov 2026	Week To Date	Month To Date (Nov)	Quarter To Date (Oct-Dec)	Year To Date (2026)
S&P ASX 200 (ex-div)	9153.20	1.47%	2.75%	4.14%	5.04%

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
AVH	Avita Medical	Upgrade to Hold from Sell	Morgans
CDA	Codan	Upgrade to Buy from Accumulate	Ord Minnett
		Upgrade to Buy from Neutral	UBS
CTD	Corporate Travel Management	Upgrade to Buy from Neutral	UBS
DNL	Dyno Nobel	Upgrade to Accumulate from Hold	Morgans
MND	Monadelphous Group	Upgrade to Buy from Hold	Bell Potter
QAN	Qantas Airways	Downgrade to Hold from Accumulate	Morgans
SCG	Scentre Group	Downgrade to Equal-weight from Overweight	Morgan Stanley
		Downgrade to Hold from Accumulate	Ord Minnett
SLC	Superloop	Upgrade to Outperform from Neutral	Macquarie
VNT	Ventia Services	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.

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