Daily Market Reports | 8:50 AM
This story features ST. BARBARA LIMITED, and other companies.
For more info SHARE ANALYSIS: SBM
The company is included in ALL-ORDS
US markets were fairly quiet on Friday with no official labour data.
The ASX200 had its strongest week since May last week and looks set to open higher with futures indicating a move through the previous all-time high of 9000.
| World Overnight | |||
| SPI Overnight | 9045.00 | + 29.00 | 0.32% |
| S&P ASX 200 | 8987.40 | + 41.50 | 0.46% |
| S&P500 | 6715.79 | + 0.44 | 0.01% |
| Nasdaq Comp | 22780.51 | – 63.54 | – 0.28% |
| DJIA | 46758.28 | + 238.56 | 0.51% |
| S&P500 VIX | 16.65 | + 0.02 | 0.12% |
| US 10-year yield | 4.12 | + 0.03 | 0.76% |
| USD Index | 97.42 | – 0.17 | – 0.17% |
| FTSE100 | 9491.25 | + 63.52 | 0.67% |
| DAX30 | 24378.80 | – 43.76 | – 0.18% |
Good Morning,
The ASX200 rose 42pts or 0.5% to 8,987pts on Friday.
Over the week, the index lifted 2.3%, its biggest weekly gain since early May.
What happened overnight, NAB Markets Today Research
It was a quiet end to the week in the absence of payrolls data.
The S&P500 was unchanged Friday while the Nasdaq lost -0.3%. Over the week, equities were uninterested in the government shutdown, with the S&P500 managing a 1.1% gain.
Healthcare stocks outperformed over the week, supported by a deal reached between Pfizer and the White House which reduced an overhang of tariff fear for the sector. The sector was up 6.2% over the week. Utilities and IT also outperformed, up over 2%, while Energy weighed, down -3.4%.
Despite the weekly gain, US equities underperformed other markets. The Eurostox 600 was 2.9% higher over the week. China remains on Golden Week holiday through Wednesday.
The data we did get on Friday, in the form of the Services ISM, was soft at 50.0 from 52.0 vs 51.7 expected. The decline was due to more than -5pt drops in both new orders and business activity. Employment rose less than 1pt to remain soft at 47.2. The ISM hasn’t had a great correlation with key activity indicators recently and contrasts with the healthier readings from the PMI services survey, which was revised up slightly to 54.2. Prices paid also rose a little, and are strong at 69.4.
In the absence of payrolls, the suite of alternate indicators doesn’t suggest much change in the labour market in September. A key challenge is alternate indicators tend to target employment, hiring or layoffs, rather than spare capacity measures like the unemployment rate. That is especially challenging given the slowdown in both labour supply and demand.
Leader of the Dallas Fed, Lorie Logan said Friday she is primarily focused on the unemployment rate, rather than payrolls figure. One attempt to reconcile what affect labour market flows will have on the unemployment rate is the Chicago Fed’s Labor Market Indicators estimate, which anticipated the unemployment rate was unchanged at 4.3% in September, with a modest skew towards 4.4%, broadly in line with the analyst consensus.
There are -24bp of cuts priced for the 29 October meeting. Markets are clearly of the view that an absence of the official data wouldn’t stop a cut, and if the shutdown is resolved in time the data would be consistent with a cut.
A slim majority of FOMC participants in September anticipated the data flow would be consistent with two more cuts this year. Vice Chair Jefferson said the Fed was able to draw on a range of data sources, “I feel as though I have enough information to do our job, and my expectation is that I’ll be well informed before I go into the October meeting.”
Dallas’ Logan said the Fed is further away from its inflation target than it is from the maximum employment goal and that “we really need to be cautious about further rate cuts from here”. Fed Governor Miran, said he’d amend his inflation view if housing costs unexpectedly jumped and argued his projections for the Fed’s policy path are not that different from those of his colleagues, but he wants to get there a little bit faster.
Over the weekend, Japan’s Sanae Takaichi won an LDP leadership contest, defying pre-polling which had lent towards Shinjiro Koizumi. Takaichi is seen as supportive of easy fiscal and monetary policy. USDJPY is up 1.3% in early Monday trading and the reaction in equity markets and JGBs will be a focus. Takaichi will need support of at least one minority party to secure a majority in a vote later this month to become Prime Minister.
Expectations for an October hike could be pared. There were -15bp of tightening priced Friday. BoJ Governor Ueda spoke Friday and kept options open for the October meeting. He was generally positive on the growth picture but pointed to downside risks including from US tariffs and the impact on profits, uncertainties on the US outlook, and the potential for food price inflation to be overstating the inflation signal.
Also over the weekend, OPEC-Plus met and to raise oil production from November by 137k barrels a day. The relatively modest increase came after reports last week suggested the possibility of a more aggressive reintroduction of supply. Speculation of a larger supply increase, as well as oil demand concerns, had seen Brent down almost -8% over last week to US$64.36.
The low of US$64.00 on Thursday was the lowest since 2 June. Copper was up 3% on Friday and 7% over the week. The move this week was alongside broader strength in base metals, while copper’s recent rally has been aided by a series of supply setbacks, including Freeport-McMoRan declaration of force majeure at the giant Grasberg mine in Indonesia last month.
A Bubble in Bubble Fears? Ed Yardeni, Yardeni Research
We are raising our year-end S&P500 target back to 7000. We started the year there, but lowered it earlier this year in response to Trump’s Tariff Turmoil.
We began raising our forecast again during the spring, when we concluded the tariff issue would no longer impact the stock market by the end of the summer. We bet the resilience of the economy would boost S&P500 earnings. So far, so good.
We think the V-shaped stock market rebound since April 9 is discounting the economy’s resilience, which reduces the odds of a recession. The market is now experiencing a slow-motion melt up. We attribute this to the Fed’s rate cut on September 17 and expectations of one or more cuts before the end of the year.
As promised, we are increasing the odds of a melt up to 30% from 25% and reducing our base-case for a sustainable bull market (i.e., without a correction) to 50% from 55%. Our odds of a correction (or worse) remain at 20%.
When the tech bubble in the stock market inflated during 1999, we don’t recall as much chatter about a bubble as we are hearing today. From a contrarian perspective, it is comforting there is a bubble in bubble fears. The Google Search index for “AI bubble” rose from zero in mid-September to 100 on October 2.
We are counting on another better-than-expected earnings reporting season for Q3 over the next few weeks to support the stock market’s rally to record highs. Industry analysts are currently predicting the quarter’s earnings will increase by 6.4% y/y. We are expecting a 10.7% increase. We expect the large banks to start the season around mid-October with upside earnings surprises. In addition, we expect the AI and cloud companies won’t disappoint either.
S&P500 forward earnings per share for the S&P500 rose to another new record high during the week of October 2. That puts the forward P/E at 22.7 based on Friday’s close. (The recent down ticks in the 2025 and 2026 earnings estimates reflect changes in the constituents of the S&P500.)
The bubble in technology-related stocks today has less air than the one during 1999. Today, the S&P500 Information Technology and Communication Services sectors account for a record 44.9% of the index’s market capitalization and a record 37.4% of the index’s forward earnings. During the Tech Bubble of 1999-2000, their combined market cap and forward earnings shares peaked at 40.7% and 23.8%.
In the absence of government data on real economic activity, we will be giving even more weight to S&P500 forward earnings as an economic indicator.
During September, it rose to a record high, showing a solid y/y increase of 9.8%.
Corporate news in Australia
-St Barbara ((SBM)) is raising $40m for its Simberi mine in PNG via an institutional placement at 46c, a -9.7% discount to the last close.
-Brookfield and Powerco are finalising terms to acquire NZ gas and electricity distribution infrastructure owner Clarus Group for NZ$2bn.
-Mint Innovation is touted for an $80m IPO pre-Christmas as well as US-based 6K Additive is looking to raise $40m for an indicated IPO valuation of $250m.
-QIC and the Clean Energy Finance Corp have invested $30m in SwarmFarm Robotics, a manufacturer of automated farming machines.
On the calendar today:
-AU MI Sept Inflation
-AU Public Holiday (NSW, ACT, SA and Queensland)
-CH Public Holiday
-EZ Aug Retail Sales
-HARVEY NORMAN HOLDINGS LIMITED ((HVN)) ex-div 14.50c (100%)
-RIDLEY CORPORATION LIMITED ((RIC)) ex-div 5.00c (100%)
-STEALTH GROUP HOLDINGS LIMITED ((SGI)) ex-div 1.00c (100%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3908.90 | + 29.00 | 0.75% |
| Silver (oz) | 47.97 | + 1.09 | 2.31% |
| Copper (lb) | 5.11 | + 0.16 | 3.17% |
| Aluminium (lb) | 1.23 | + 0.01 | 0.81% |
| Nickel (lb) | 6.91 | + 0.05 | 0.79% |
| Zinc (lb) | 1.37 | + 0.00 | 0.30% |
| West Texas Crude | 60.88 | + 0.16 | 0.26% |
| Brent Crude | 64.53 | + 0.34 | 0.53% |
| Iron Ore (t) | 104.36 | + 0.26 | 0.25% |
The Australian share market over the past thirty days…
| Index | 03 Oct 2025 | Week To Date | Month To Date (Oct) | Quarter To Date (Oct-Dec) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8987.40 | 2.27% | 1.57% | 1.57% | 10.15% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| 29M | 29Metals | Downgrade to Neutral from Outperform | Macquarie |
| AIS | Aeris Resources | Downgrade to Neutral from Outperform | Macquarie |
| AMP | AMP | Upgrade to Buy from Accumulate | Ord Minnett |
| APE | Eagers Automotive | Upgrade to Accumulate from Hold | Ord Minnett |
| ASX | ASX | Upgrade to Accumulate from Hold | Ord Minnett |
| CMM | Capricorn Metals | Downgrade to Underperform from Neutral | Macquarie |
| GL1 | Global Lithium Resources | Upgrade to Neutral from Underperform | Macquarie |
| NHC | New Hope | Downgrade to Accumulate from Buy | Morgans |
| NHF | nib Holdings | Upgrade to Buy from Accumulate | Ord Minnett |
| NIC | Nickel Industries | Upgrade to Outperform from Neutral | Macquarie |
| PPT | Perpetual | Upgrade to Outperform from Neutral | Macquarie |
| PRU | Perseus Mining | Downgrade to Neutral from Outperform | Macquarie |
| QUB | Qube Holdings | Upgrade to Buy from Accumulate | Ord Minnett |
| RHC | Ramsay Health Care | Downgrade to Underweight from Equal-weight | Morgan Stanley |
| RMS | Ramelius Resources | Downgrade to Neutral from Outperform | Macquarie |
| RRL | Regis Resources | Downgrade to Underperform from Neutral | Macquarie |
| SNL | Supply Network | Upgrade to Buy from Accumulate | Ord Minnett |
| VEE | Veem | Downgrade to Hold from Buy | Ord Minnett |
| WAF | West African Resources | Downgrade to Underperform from Outperform | Macquarie |
| WGN | Wagners Holding Co | Downgrade to Hold from Accumulate | Morgans |
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.)
(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)
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CHARTS
For more info SHARE ANALYSIS: HVN - HARVEY NORMAN HOLDINGS LIMITED
For more info SHARE ANALYSIS: RIC - RIDLEY CORPORATION LIMITED
For more info SHARE ANALYSIS: SBM - ST. BARBARA LIMITED
For more info SHARE ANALYSIS: SGI - STEALTH GROUP HOLDINGS LIMITED