Daily Market Reports | 8:38 AM
This story features SANTOS LIMITED, and other companies. For more info SHARE ANALYSIS: STO
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS
US markets set new record highs, again, with Intel and Nvidia rallying on a US$5bn investment by the world's largest company in Intel.
After a two-week trading low for the ASX200 yesterday, futures are set to open higher.
| World Overnight | |||
| SPI Overnight | 8838.00 | + 41.00 | 0.47% |
| S&P ASX 200 | 8745.20 | – 73.30 | – 0.83% |
| S&P500 | 6631.96 | + 31.61 | 0.48% |
| Nasdaq Comp | 22470.73 | + 209.40 | 0.94% |
| DJIA | 46142.42 | + 124.10 | 0.27% |
| S&P500 VIX | 15.70 | – 0.02 | – 0.13% |
| US 10-year yield | 4.10 | + 0.03 | 0.69% |
| USD Index | 97.00 | + 0.36 | 0.37% |
| FTSE100 | 9228.11 | + 19.74 | 0.21% |
| DAX30 | 23674.53 | + 315.35 | 1.35% |
Good Morning,
The ASX200 fell -73.3pts or -0.83% on Thursday to a two-week low of 8745.20. Energy fell the most as Santos ((STO)) shares sank as the XRG consortium walked away from the bid.
With the exception of technology stocks, all sectors declined.
What happened overnight, NAB Markets Today Research
Risk appetite returned overnight as markets reassessed the Fed’s stance, with traders taking a more positive view of the FOMC decision and guidance. US equities surged to new highs, with the S&P500, Nasdaq100, Dow Jones, and Russell2000 all closing at new highs.
Tech outperformed, fueled by a 23% jump in Intel after Nvidia’s US$5bn investment and plans for joint chip development. Small caps also rallied, and Chinese equities were buoyed by ongoing AI investment and optimism around domestic chip innovation. .
The post FOMC market assessment has been on the Fed risk management approach with Chair Powell’s “meeting by meeting” guidance seen as prudent.
Overnight US data releases painted a picture of resilience in the labour market and a rebound in business sentiment. Initial jobless claims fell sharply by -33,000 to 231,000, reversing the previous week’s spike and suggesting the earlier rise was likely a statistical blip related to the Labour Day holiday with an unusual jump in Texas claims, attributed to attempted fraud.
The underlying trend remains one of only a gentle drift higher in claims, reinforcing the view the US labour market is not showing signs of sudden weakness. Meanwhile, the Philadelphia Fed business outlook index surged from -0.3 in August to 23.2 in September, its highest level in eight months and well above expectations. The rebound was driven by a strong recovery in new orders, as some tariff uncertainty for firms was lifted.
US Treasury yields climbed overnight, with the 10-year yield reaching an overnight high of 4.13% before buyers stepped back in to pare some of the early rise in yields. The initial sell-off was triggered by stronger-than-expected US data, which reinforced the “soft landing” narrative and prompted traders to scale back expectations for imminent Fed rate cuts.
The move in US yields resulted in a bear steepening of the curve, with the 5s30s spread widening by around 2bps, the 10-year yield ending the session at 4.10%, around 2bps higher compared to the previous close.
Post the FOMC meeting the US dollar has been enjoying broad gains, buoyed by stronger-than-expected US data and higher Treasury yields (DXY up 0.5%). The Australian dollar was relatively steady, holding its ground after the latest labour market report showed the unemployment rate unchanged at 4.2%, broadly in line with RBA forecasts.
While employment fell, a drop in participation prevented the unemployment rate from rising, and the data reinforced expectations the RBA will continue its gradual path towards policy normalisation. Against a backdrop of a strong USD, the AUD has been drifted down over the past 24 hours, now trading at 0.6611, recording a brief uptick to 0.6656 late yesterday before resuming its downtrend.
In contrast, the New Zealand dollar under-performed sharply, after Q2 GDP contracted by- 0.9%, a much weaker outcome than expected. The kiwi extended its losses overnight, falling to multi-year lows on the crosses This reinforced the market’s view the RBNZ is likely to deliver further rate cuts before year-end.
The Bank of England’s latest policy decision saw the Monetary Policy Committee vote 7 to 2 in favour of keeping the Bank Rate unchanged at 4%, with the two perennial doves, Swati Dhingra and Alan Taylor, maintaining their calls for further easing. The guidance accompanying the decision remained cautious, emphasising any future rate cuts would be “gradual and careful” and contingent on continued progress in underlying disinflationary pressures.
UK Governor Andrew Bailey reiterated while further reductions are likely, the timing and scale remain uncertain given upside risks to inflation.
In addition to the rate decision, the BoE announced it would slow the pace of quantitative tightening, reducing its planned gilt sales to GBP70 billion for the coming year (down from GBP100 billion previously), with a deliberate skew away from longer-dated bonds to help limit the impact on the gilt market. This adjustment aims to address criticism that aggressive active sales have been putting upward pressure on long-term UK yields.
In Europe, yields also moved higher, led by long-end bonds. The German 30-year yield rose 7bps to 3.30% after the finance agency announced increased bond issuance, particularly in the 15-year sector. UK 30-year gilts jumped 6bps to 5.49% notwithstanding the Bank of England’s decision to reduce the pace of quantitative tightening and skew gilt sales away from longer maturities.
Post the BoE meeting the OIS market now doesn’t price a -25bps BoE cut before April next year, little changed to where it was yesterday.
Moving to commodities, oil edged lower, with WTI down- 0.5% to US$63.73/bbl, as oversupply fears and Trump’s preference for low prices weighed on sentiment. The EU is set to propose new sanctions on Russia, targeting energy and financial sectors. Gold slipped -1.2%, while base metals were mixed.
In other news, President Trump is set for a high-stakes call with Chinese President Xi Jinping on Friday, with the prospect of a trade truce and a framework deal to preserve TikTok’s US operations on the agenda.
Meanwhile, Trump has also asked the US Supreme Court to allow him to fire Federal Reserve Governor Lisa Cook, escalating a legal battle that could have significant implications for the central bank’s independence.
Adding to the political drama, Trump also threatened to revoke TV licences for US broadcasters critical of him, drawing renewed scrutiny of media freedom.
On the geopolitical front, the European Union is preparing to unveil a new package of sanctions on Russia, targeting energy, banks, and crypto sectors, following a call between EU Commission President von der Leyen and President Trump.
TikTok, Stephen Innes, SPI Asset Management
Markets often feel like they’re waiting on a phone call that never quite comes, but today’s line runs straight between Washington and Beijing.
Trump and Xi are set to speak, and the wires are already humming with the usual mix of theatre, posturing, and selective leaks. Traders know the pattern: pre-call signalling to stir the pot, media breadcrumbs to shape expectations, and then a carefully choreographed conversation where neither side truly gives away the store.
But this is not just another round of polite diplomatic banter. Hanging in the balance is TikTok’s American survival, the tariff “truce,” and the broader chessboard of technology dominance. Markets are treating it like waiting for a risk event release, not because the call itself will deliver hard outcomes, but because the tone may shape how algorithms and asset allocators lean into the weekend.
Trump’s sudden enthusiasm for TikTok is the kind of narrative twist that traders love. Once an enemy of the app, he’s now hailing it as an asset too valuable to discard, especially when it doubles as a pipeline to young voters. A U.S. consortium snapping up the local business with China’s nod and a “fee plus” kicker?
It sounds more like a structured product than a social media deal, and the market hears it the same way. This is not just about a video app; it’s a proxy for who controls algorithms that shape consumer behavior. In markets, we call that order flow.
Trump wants it domesticated, securitized, and presented as “owned by America.” Beijing, for its part, wants to make sure no crown jewel is stripped without some kind of ongoing claim. Both sides are maneuvering as though the option premium is worth more than the underlying asset.
Huawei’s re-emergence with a blueprint for its chips signals Beijing is no longer playing quiet defence. Pair that with its order that domestic firms stop buying Nvidia’s AI products, and you’ve got a clear message: China is willing to shift the demand curve, even at a short-term cost, to gain long-term independence.
The U.S., meanwhile, is striking a side deal with Nvidia, shipments can go through, but Washington collects a 15% skim. That is classic rent-extraction dressed up as national security.
For markets, it’s a reminder that semis are not just cyclical plays but geopolitical pawns. Each announcement ricochets into valuations, not because supply-demand curves changed overnight, but because the regulatory ceiling keeps lowering above the sector.
The current 90-day tariff pause is a holding pattern, like a market in range trade waiting for a breakout. The longer it holds, the more compressed the energy, and the more violent the move when the breakout finally comes.
Traders remember what happened when tit-for-tat escalations got out of hand earlier this year; volatility bled from FX into equities into credit in a perfect feedback loop.
Bessent’s comments on the yuan underscore the subtler game. Against the dollar, the RMB has been steady; against the euro, it’s collapsed. That tells us Beijing is more concerned with preserving relative competitiveness against Europe than pushing against the U.S. For U.S. traders, it’s a sideshow. For Europe, it’s a slow-burning pressure cooker. Either way, currency shifts are just another leg in the tripod of leverage, tariffs, tech, and FX.
Wall Street has learned these Trump-Xi moments rarely deliver the fireworks promised. They’re more like a poker hand where both players show a card or two, smile for the cameras, and leave the real bets for later.
What markets care about is not the communique but the direction of travel. A thaw, however incremental, keeps equities buoyant and risk spreads contained. A stumble, say, Xi balking on TikTok or Trump reviving tariff threats, and you’ll see an immediate repricing in FX, with USD/CNH the first responder.
Tech stocks remain the high-beta play here; Nvidia, Oracle, and anyone linked to AI supply chains will feel the tremors most acutely.
So, we sit hanging on the telephone, waiting for the leaders to lift the receiver and speak in tones markets can decode. It’s not about whether TikTok survives or tariffs extend another 90 days. It’s about whether investors can keep pretending the ice is melting, or whether the frost is still deep enough to crack.
In trading, you don’t always need the deal, you just need the story. And today, the story is that Washington and Beijing still need each other enough to keep talking.
That alone may be enough to keep risk assets bubbly into the weekend.
Corporate news in Australia
-Santos ((STO)) maybe be forced to divest assets now the XRG takeover bid is off the table.
-Origin Energy’s ((ORG)) partly owned Octopus Energy has announced the sale of Kraken.
-ASIC has ordered stop orders on La Trobe investment products, including the flagship 12-month term account which raised funds via the listing of La Trobe Private Credit Fund ((LFI)).
-Employment Hero has accused Seek (SEK)) of cutting off access to its data.
-Nasdaq listed Air T has made an offer for Rex Airlines to be scrutinised by even the Prime Minister.
On the calendar today:
-NZ July Trade Bal
-JP Aug CPI
-JP BoJ Target rate
-UK Aug Retail sales
-LATITUDE GROUP HOLDINGS LIMITED ((LFS)) ex-div 4.00c
-MYER HOLDINGS LIMITED ((MYR)) earnings report
-VITA LIFE SCIENCES LIMITED ((VLS)) ex-div 4.50c (100%)
-WAM INCOME MAXIMISER LIMITED ((WMX)) ex-div 0.25c (100%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3678.20 | – 15.32 | – 0.41% |
| Silver (oz) | 42.11 | + 0.11 | 0.25% |
| Copper (lb) | 4.60 | – 0.02 | – 0.36% |
| Aluminium (lb) | 1.22 | + 0.01 | 0.47% |
| Nickel (lb) | 6.85 | + 0.01 | 0.17% |
| Zinc (lb) | 1.32 | – 0.01 | – 0.94% |
| West Texas Crude | 63.65 | – 0.36 | – 0.56% |
| Brent Crude | 67.51 | – 0.43 | – 0.63% |
| Iron Ore (t) | 105.24 | – 0.06 | – 0.06% |
The Australian share market over the past thirty days…
| Index | 18 Sep 2025 | Week To Date | Month To Date (Sep) | Quarter To Date (Jul-Sep) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8745.20 | -1.35% | -2.54% | 2.38% | 7.18% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AD8 | Audinate Group | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| AMP | AMP | Downgrade to Accumulate from Buy | Ord Minnett |
| BUB | Bubs Australia | Downgrade to Accumulate from Buy | Ord Minnett |
| CNI | Centuria Capital | Downgrade to Sell from Neutral | UBS |
| COF | Centuria Office REIT | Downgrade to Sell from Neutral | UBS |
| DBI | Dalrymple Bay Infrastructure | Upgrade to Accumulate from Hold | Morgans |
| HDN | HomeCo Daily Needs REIT | Upgrade to Buy from Neutral | UBS |
| HVN | Harvey Norman | Upgrade to Equal-weight from Underweight | Morgan Stanley |
| IGO | IGO Ltd | Upgrade to Neutral from Sell | Citi |
| MFG | Magellan Financial | Downgrade to Underperform from Neutral | Macquarie |
| NHC | New Hope | Downgrade to Underperform from Neutral | Macquarie |
| NTU | Northern Minerals | Downgrade to Hold from Speculative Buy | Ord Minnett |
| PDN | Paladin Energy | Downgrade to Hold from Accumulate | Ord Minnett |
| RFF | Rural Funds | Upgrade to Buy from Neutral | UBS |
| STO | Santos | Downgrade to Trim from Accumulate | Morgans |
| WES | Wesfarmers | Upgrade to Equal-weight from Underweight | Morgan Stanley |
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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CHARTS
For more info SHARE ANALYSIS: LFS - LATITUDE GROUP HOLDINGS LIMITED
For more info SHARE ANALYSIS: MYR - MYER HOLDINGS LIMITED
For more info SHARE ANALYSIS: ORG - ORIGIN ENERGY LIMITED
For more info SHARE ANALYSIS: STO - SANTOS LIMITED
For more info SHARE ANALYSIS: VLS - VITA LIFE SCIENCES LIMITED
For more info SHARE ANALYSIS: WMX - WAM INCOME MAXIMISER LIMITED