The Overnight Report: US Government Shutdown?

This story features MONADELPHOUS GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: MND

The company is included in ASX200, ASX300 and ALL-ORDS

The S&P500 recovered off its lows, but fell for the third straight day despite better macro data.

After a punishing sell off on Wednesday, the ASX200 tipped slightly into the green yesterday with futures pointing to positive start to end the week.

World Overnight
SPI Overnight	8810.00	+ 8.00	0.09%
S&P ASX 200	8773.00	+ 8.50	0.10%
S&P500	6604.72	– 33.25	– 0.50%
Nasdaq Comp	22384.70	– 113.16	– 0.50%
DJIA	45947.32	– 173.96	– 0.38%
S&P500 VIX	16.74	+ 0.56	3.46%
US 10-year yield	4.17	+ 0.03	0.60%
USD Index	98.12	+ 0.61	0.63%
FTSE100	9213.98	– 36.45	– 0.39%
DAX30	23534.83	– 131.98	– 0.56%

Good Morning,

The ASX200 rose 8.5pts or 0.1% to 8773 on Thursday after its worst sell off in three weeks following a hotter than expected August CPI print on Wednesday.

Copper miners were the stars and rallied most after closure of a major Indonesian mine from a severe mud slide.

What happened overnight, NAB Markets Today Research extract

On US data, the third estimate of Q2 GDP showed another upward revision, now 3.8% from the 3.3% second estimate. personal consumption was revised up to 2.5% qoq from 1.7%.

A 2.9% jump in durable goods orders in August was, as usual, swung by volatile aircraft components, but core orders were still up 0.4% mom, beating expectations for a flat outcome. Some easing in tariff-related uncertainty is likely a support. Core shipments did fall -0.3% mom, but after a 0.6% gain in July.

The trade balance narrowed, more than expected to US$85.5bn as a sharp drop off in imports followed the August jump. With the first August monthly data now rolling in, the Atlanta Fed’s GDPNow estimate, which has been sitting well above consensus estimates, slipped a tenth -3.3% qoq.

Still a lot of Q3 data to come but growth momentum into Q3 looks at least as strong as the FOMC’s upgraded median projection for this year. August personal spending and income data are the next cab off the rank tonight.

On the labour market, initial jobless claims dipped unexpectedly to 218k, -1k below their year ago levels but likely flattered by fewer weather-related claims this year. Continuing claims were 1926k, lower than a month prior in the week ending 13 September, the reference period for the household survey that produces the unemployment rate in next Friday’s Payrolls release.

The 2-year US Treasury yield is up 6bps to 3.66% while the US 10-year rate is up 2bps to 4.17%, after reaching an overnight high of 4.20%. There are now -22bp of interest rate cuts priced for the next meeting and -39bp priced by the end of the year, from -23bp and -43bp a day prior.

From Fed speakers, Governor Bowman said inflation is “within range” of the Fed’s 2% target but the labor market is more “fragile” than expected. Not relevant to the short time path of policy, but worth noting that Dallas’ Logan suggested “the time has come for the FOMC to prepare to target a different short-term interest rate,” offering up the tri-party general collateral rate, which is tied to overnight repurchase agreements.

Governor Cooks lawyers warned even her temporary removal risks “chaos and disruption” in financial markets. A bipartisan group of former Treasury secretaries, Federal Reserve chairs and other experts urged the US Supreme Court not to let President Donald Trump fire Fed Governor Lisa Cook. 

In other news, there remains no obvious exit ramp as the 1 October deadline to avoid a US government shutdown approaches. Republicans are seeking a short term extensions to funding at current levels, while Democrats have demanded more healthcare spending. A shutdown could delay next Friday’s Payrolls report.

The drumbeat of better US data supported the USD with the DXY 0.6% higher. The AUD outperformed in yesterday’s dollar strength, supported by some repricing in RBA expectations after CPI, but there was no such offset over the past 24 hours and the AUD tracked the broader dollar move to be down -0.7% to 0.6535, having touched an intraday low of 0.6517.

The S&P500 fell -0.5%, a third consecutive decline, but did pare losses after being down more than -1% intraday. All S&P500 sectors except Energy and IT were in the red, with losses led by Consumer Discretionary and Health Care. The Euro Stoxx600 index closed down- 0.7%.

President Trump signed an executive order formalising the previously announced agreement for a group of American investors to take control of TikTok’s US operations.

Q3 earnings season is coming, Ed Yardeni, Yardeni Research extract

Before you know it, September will be over. It is likely to defy the month’s reputation of being a bad one for stocks. Instead, the S&P500 rose to a new record high of 6693.75 on Monday, September 22. 

October has also experienced some painful stock market setbacks, although the month has often provided good buying opportunities following poor September performances. Q3’s earnings reporting season occurs in October. We expect it will be a positive one for the market.

The rebound in the stock market since this year’s low on April 8 (when it bottomed at 4982.77) has been extraordinary. That’s mainly because the Q1 and Q2 earnings seasons (during April and July) were much better than expected. We are expecting similar “earnings hooks” (i.e., upturns in the data series as actual results are incorporated) for Q3 and Q4.

Q2’s upbeat earnings surprises weren’t limited to the Information Technology and Communication Services sectors, in general, or the Magnificent-7 and the AI stocks, in particular. The Financials and Consumer Discretionary sectors also beat expectations.

Analysts’ consensus expectations for S&P500 earnings during Q3 haven’t changed much since the start of the Q2 earnings reporting season.

Financials should be among the sectors that beat earnings expectations for Q3.

That’s especially likely for the big banks, which are experiencing better loan growth. Also boosting their earnings is the steepening yield curve and mounting investment banking business.

Corporate news in Australia

-Monadelphous ((MND)) wins $200m in mining contracts from BHP Group ((BHP)) and Fortescue ((FMG)).

-Computershare ((CPU)) is selling its UK mortgage services to Pepper Advantage and is expected to book a -GBP35m-40m loss.

-Gold Fields launches a $1.1bn sell down of shares in Northern Star Resources ((NST)).

-Woodside Energy Group ((WDS)) has joined Japan’s Suiso Energy and Kepco on a hydrogen export project in Perth using gas and carbon capture and storage.

On the calendar today:

-NZ Sept Cons Confidence

-JP Sept CPI

-US Aug PCE

-US Sept Kansas Fed

-US Sept Uni of Mich

-SRG GLOBAL LIMITED ((SRG)) ex-div 3.00c (100%)

-VERIS LIMITED ((VRS)) ex-div 0.20c (100%)

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

Spot Metals,Minerals & Energy Futures
Gold (oz)	3781.85	+ 25.73	0.69%
Silver (oz)	45.48	+ 1.36	3.07%
Copper (lb)	4.79	– 0.03	– 0.71%
Aluminium (lb)	1.21	+ 0.00	0.19%
Nickel (lb)	6.94	+ 0.08	1.22%
Zinc (lb)	1.33	– 0.00	– 0.18%
West Texas Crude	65.25	+ 0.42	0.65%
Brent Crude	69.60	+ 0.46	0.67%
Iron Ore (t)	105.54	0.00	0.00%

The Australian share market over the past thirty days…

Index	25 Sep 2025	Week To Date	Month To Date (Sep)	Quarter To Date (Jul-Sep)	Year To Date (2025)
S&P ASX 200 (ex-div)	8773.00	-0.01%	-2.23%	2.70%	7.52%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
CLW	Charter Hall Long WALE REIT	Downgrade to Neutral from Buy	Citi
CQR	Charter Hall Retail REIT	Upgrade to Outperform from Neutral	Macquarie
MYR	Myer	Downgrade to Hold from Accumulate	Ord Minnett
PLS	Pilbara Minerals	Downgrade to Sell from Neutral	UBS
PTM	Platinum Asset Management	Downgrade to Hold from Buy	Bell Potter
SCG	Scentre Group	Upgrade to Neutral from Underperform	Macquarie
VAU	Vault Minerals	Downgrade to Neutral from Buy	UBS
VCX	Vicinity Centres	Upgrade to Neutral from Underperform	Macquarie

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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