The Overnight Report: Bonds & Oil Push Back

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US markets slipped slightly, as Nvidia lost its founder and CEO Jensen Huang to an accumulation of infidelity scandals.

Anthropic's IPO is reportedly several times oversubscribed.

The Australian market closed slightly weaker yesterday. On Friday morning ASX200 futures are pointing to a weak start for the end of the week.

Lower precious metals prices are likely to weigh on Aussie gold stocks.

World Overnight
SPI Overnight	9121.00	– 61.00	– 0.66%
S&P ASX 200	9146.80	– 6.40	– 0.07%
S&P500	7592.40	– 26.98	– 0.35%
Nasdaq Comp	25366.09	– 100.10	– 0.39%
DJIA	52297.09	– 189.40	– 0.36%
S&P500 VIX	18.97	+ 1.48	8.46%
US 10-year yield	5.10	+ 0.11	2.10%
USD Index	103.18	+ 0.25	0.25%
FTSE100	10863.09	+ 27.62	0.25%
DAX30	26771.88	+ 109.11	0.41%

Good Morning,

On Thursday, the ASX200 slipped -6.4 points or -0.07% to 9146.80.

Materials were a drag, down -2% with buying across Healthcare, InfoTech, REITs and Telecoms.

Macquarie on Aristocrat Leisure ((ALL)):

“Aristocrat reported A$1,579m FY26 NPATA, +2% YoY (+10% constantFX), ahead of MQe (A$1,569m) and in line with Visible Alpha (A$1,581m).

“The result showed momentum, strong exit rates, and a step-change within North America Gaming and iCasino (report link). CEO Trevor Croker, also announced his upcoming retirement (April 2027), with Dafne Guisard the nominated successor.

“Aristocrat should deliver +10-15% near-term EPSA growth (MQe = +13% constant-FX CAGR, FY26-29) with Gaming and Interactive having higher market-share opportunities in a robust backdrop. A key debate is whether the new CEO maintains the US$1bn FY29 Interactive revenue target.”

RBC Capital on Xero ((XRO)):

“There were several moving parts in XRO’s 1H27 result, with key positives being the FY28 aspirational revenue upgrade (consensus likely to upgrade FY28 EBITDA as a result), A$1bn buyback, and strength across Xero’s core subscription businesses in Australia and the UK, offset by a -2% EBITDA miss vs RBCe/consensus and CFO resignation.

“The headline FY27 EBITDA upgrade is positive though offset by higher D&A, with EBIT unchanged. Our FY27E/FY28E EBITDA estimates are virtually unchanged, with accretion from the share buyback driving most of the +9% increase to our valuation. Retain Outperform.”

On the calendar today Bendigo & Adelaide Bank’s ((BEN)) quarterly update, as well as AGMs from SGH Ltd ((SGH)) and Navigator Global Investments ((NGI)).

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

Nvidia’s Trouble Stayed Mostly With Nvidia

Nvidia $NVDA lost its founder this morning and opened down hard.

Then everyday investors bought about US$111 million of it in the first half hour, more than on any morning Vanda Research has tracked.

The people who lend Nvidia money barely reacted, and the VIX, the market’s fear gauge, sat right at its average for the year.

That makes sense to me, because the big chip buyers pay out of their own profits and still need the chips whoever is CEO.

Rising Yields Took Back The Midday Rebound

Stocks had worked their way back to about even by lunch, and then the bond market took it away.

Trump said he doesn’t need a deal with Iran, oil rose, and San Francisco Fed President Mary Daly said she leans toward more rate hikes.

That pushed the 10-year Treasury yield to about 5.1 percent, which hit small companies hardest and took gold and bitcoin down too.

I’d say rates did more damage to the market today than Nvidia did.

OpenAI Raised Half Of What It Planned

OpenAI set out to raise as much as US$30 billion and came back with US$15 billion, CNBC’s David Faber reported.

It also took a lower price than it wanted, a US$1.25 trillion valuation instead of US$1.4 trillion.

Nvidia has at least US$30 billion in OpenAI, so that’s one more thing on the interim CEO’s desk.

Anthropic goes public next week, and that will tell us whether investors are being picky about OpenAI or about AI in general.

ANZ Bank, Australian Morning Focus, extract

Equity markets rose modestly despite the rise in bond yields. Financial headlines were dominated by news of Jensen Huang’s resignation from Nvidia, which weighed on the company’s share price.

The S&P500 was down -0.35% and Nasdaq down -0.39%.

The EuroStoxx ended its session up 0.1%, while the FTSE100 gained 0.3%.

The yield on the US 10Y note rose around 11.9bp to 5.1%. WTI lifted 4.1% to US$88.8/bbl. Gold was weaker at US$3,882.6/oz.

The Fed has dropped the October meeting from its schedule, leaving seven rate-setting meetings for 2027. The move follows Fed Chair Warsh’s earlier announcement that the Fed intends to hold fewer meetings per year going forward, replacing rate-setting meetings with monetary policy strategy meetings.

While the 2028 schedule has not been finalised beyond the January meeting, Warsh said last month that, in 2028, the Fed would reduce the number of rate-setting meetings to six and increase the number of strategy meetings to two.

Existing US home sales fell from 3.97m to 3.75m (SAAR) in October, the lowest level since 2010. The result is not particularly surprising given the recent rise in US mortgage rates.

However, while the US housing market is one aspect of the economy indicating restrictive financial conditions, the same cannot be said for the AI investment boom, which is the key force behind US demand strength.

Market expectations of rate hikes from the Fed have continued to firm, with between three and four hikes now expected over the next 12 months.

The recent trend in US data has been unambiguous. Robust growth in domestic demand, signs that the labour market may be beginning to tighten, and a renewed upward trend in underlying inflation momentum all indicate that the Fed’s inflation challenge is evolving from responding to supply-driven relative price shocks to the emergence of demand-pull inflation.

FOMC policymakers’ remarks today were consistent with that conclusion. Cleveland Fed President Hammack reiterated that monetary policy is not restrictive and that additional, frequent adjustments may be required.

While the direction of travel for Fed policy is clear, the path is not, in the absence of guidance from Fed Chair Warsh. A continuation of the FOMC’s gradual approach without a clear articulation as to why carries significant risk to its credibility as evidence of a growing inflation challenge builds.

Tomorrow’s PPI report is the next cab off the rank for assessing inflation risks.

One My Mind: Fed hikes as fiscal spending outweighs AI slowdown, Sonal Desai, Franklin Templeton, extract

The AI infrastructure buildout will be slower after next year and more expensive.

Data centers are less likely to benefit from fiscal incentives and more likely to have to contribute to build new power generation or pay subsidies to help defray the higher cost of power due to their additional demand and maybe commit to boosting local employment.

These challenges are not insurmountable, but they could increase the cost of the build out. While the adverse fallout on economic activity, however, will likely be moderate.

The often-repeated argument that US growth is now almost entirely dependent on AI investment is vastly overstated. The contribution of AI capital expenditures (capex) to gross domestic product (GDP) growth peaked in the third quarter of this year, when it accounted for 1.4 percentage points out of an annual growth rate of 2.1%.

What we and other analysts can measure as AI capex, however, captures more than just AI investment. National accounts statistics provide data on information processing equipment, software, research and development, and data centers as the categories most closely associated with AI.

This is the combined measure of capex that peaked at 1.4 percentage points last quarter. Between 2015 and 2022, before generative AI came onto the scene, this same measure averaged about 0.5 percentage points.

The excess attributable to AI is therefore short of one percentage point. Moreover, a lot of the related hardware is imported and therefore needs to be subtracted to get the net contribution to growth.

This adjustment would at least halve the contribution of AI capex to growth, bringing it to a more realistic 0.4 to 0.5 percentage points, somewhat less than one-quarter of the US economy’s growth rate.

Clearly this is a meaningful contribution, but far from the only driver of US growth.

AI capex will not disappear, and these estimates show that even if it were cut in half, it would reduce US GDP growth by less than a quarter of a percentage point, which would still leave the US economy running at about potential.

Since AI capex accounts for just over 7% of nominal GDP, the fallout would be modest, including in terms of employment (the same sectors account for about 5% of private payrolls).

Finally, some of the slowing AI capex would plausibly be made up by an acceleration in other areas that have more recently been crowded out by the AI boom.

The bottom line is that the shift in the political wind will make the AI infrastructure buildout slower and more expensive, but without major implications for growth and inflation.

If concerns about the growth impact of AI slowdowns are overblown, I think the idea that a divided government will narrow the fiscal deficit is wishful thinking. If there is one thing that unites the two political sides, it is their desire to spend more.

A divided house will not spend less. It will likely spend more.

The growth outlook remains healthy, in my view. Looser fiscal policy and potentially lower energy prices, if the Iran crisis is resolved, would be positive for economic activity and would outweigh the limited headwind from a potentially slower pace of AI infrastructure investment.

As far as the Fed is concerned, a resilient economy, a strong labor market, and entrenched inflationary pressures will matter more than a potential marginal reduction in price pressures from energy and tariffs.

The Fed remains on track to deliver another two to three rate hikes, starting most likely in December, and pressure on bond yields will remain to the upside. Real yields are not rich yet.

The neutral nominal fed funds rate is around 4%-4.50% and adding about 1 percentage point of term and risk premium would give us a fair value of 5%-5.50% for 10-year US Treasuries.

Continued loose fiscal policy will keep generating substantial funding requirements for the government. Any slack in funding demand created by a potential slowdown in AI infrastructure is likely to be taken up by investment in other sectors of the economy.

Upward pressure on yields is therefore likely to persist.

Corporate news in Australia:

• Majority Capital Partners proposes a $197m takeover of G8 Education ((GEM)) at 26c per share, a 160% premium
• TPG Capital emerges as a potential buyer of Altius Group, with Riverside seeking around $500m for the healthcare business through Macquarie Capital ((MQG))
• Orica ((ORI)) explores further acquisitions, potentially including a sizeable US mining chemicals business, as part of its international expansion strategy
• Ridley Corp ((RIC)) emerges as a potential acquirer of GrainCorp ((GNC)) following the latter’s $10.1m FY26 loss and leadership departures, including managing director Robert Spurway
• Morgan Stanley Infrastructure Partners advances the $1bn auction of New Zealand ferry operator StraitNZ, with Northleaf Capital
• EQT prepares to sell Icon Group, while GenesisCare appoints Jefferies to advise on a potential $1bn–$2bn sale, placing over $4bn of Australian cancer-care assets potentially on the market in 2027, with Jardine Matheson flagged as a possible buyer
• Xero ((XRO)) launches an on-market share buyback of up to $1bn over 12 months
• GrainCorp ((GNC)) completes $38m of its $75m on-market buyback and finalises the sale of GrainsConnect Canada
• Commonwealth Bank ((CBA)) takes possession of AEW Capital Management’s $175m Melbourne office tower following a financing default
• Many Peaks Minerals ((MPK)) launches a $60m equity raising to advance its Cote d’Ivoire gold project, appointing Canaccord Genuity as global bookrunner alongside Barrenjoey ((BJY)) and SCP Resource Finance as joint lead managers
• Paladin Energy ((PDN)) launches a $525m capital raising to support its uranium operations and longer-term production ambitions through to 2031

On the calendar today:

-NZ Oct Manufacturing PMI

-CH 3Q Balance of payments (prelim)

-EZ 3Q GDP (second estimate)

-EZ Sep Trade balance

-US Oct PPI

-BENDIGO & ADELAIDE BANK LIMITED ((BEN)) Qtrly update

-DICKER DATA LIMITED ((DDR)) ex-div 11.50c (100%)

-NAVIGATOR GLOBAL INVESTMENTS LIMITED ((NGI)) AGM

-SGH LIMITED ((SGH)) AGM

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

Spot Metals,Minerals & Energy Futures
Gold (oz)	3874.34	– 109.89	– 2.76%
Silver (oz)	49.98	– 1.75	– 3.38%
Copper (lb)	6.18	– 0.07	– 1.12%
Aluminium (lb)	1.46	+ 0.04	2.76%
Nickel (lb)	7.23	+ 0.03	0.36%
Zinc (lb)	1.72	+ 0.01	0.69%
West Texas Crude	88.95	+ 2.59	3.00%
Brent Crude	96.00	+ 3.49	3.77%
Iron Ore (t)	91.60	– 0.55	– 0.60%

The Australian share market over the past thirty days…

Index	12 Nov 2026	Week To Date	Month To Date (Nov)	Quarter To Date (Oct-Dec)	Year To Date (2026)
S&P ASX 200 (ex-div)	9146.80	1.40%	2.68%	4.07%	4.96%

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
CDA	Codan	Upgrade to Buy from Accumulate	Ord Minnett
		Upgrade to Buy from Neutral	UBS
DNL	Dyno Nobel	Upgrade to Accumulate from Hold	Morgans
FDC	FDC Consolidated	Upgrade to Buy from Accumulate	Morgans
FLT	Flight Centre Travel	Downgrade to Equal-weight from Overweight	Morgan Stanley
		Downgrade to Accumulate from Buy	Morgans
MND	Monadelphous Group	Upgrade to Buy from Hold	Bell Potter
SCG	Scentre Group	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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