Daily Market Reports | 8:49 AM
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An escalation in China tariff and trade rhetoric from President Trump's Truth Social post on Friday sent US markets down, with Nasdaq falling the most.
ASX200 futures are pointing to a sharp fall on the back of US markets declines on Friday (even though Trump has tried to sooth market anxiety over the weekend).
| World Overnight | |||
| SPI Overnight | 8896.00 | – 84.00 | – 0.94% |
| S&P ASX 200 | 8958.30 | – 11.50 | – 0.13% |
| S&P500 | 6552.51 | – 182.60 | – 2.71% |
| Nasdaq Comp | 22204.43 | – 820.20 | – 3.56% |
| DJIA | 45479.60 | – 878.82 | – 1.90% |
| S&P500 VIX | 21.66 | + 5.23 | 31.83% |
| US 10-year yield | 4.15 | 0.00 | 0.00% |
| USD Index | 98.73 | – 0.47 | – 0.47% |
| FTSE100 | 9427.47 | – 81.93 | – 0.86% |
| DAX30 | 24241.46 | – 369.79 | – 1.50% |
Good Morning,
The Australian market slipped -12pts or -0.1% on Friday with losses in the gold miners.
Eight of eleven sectors rose including technology, offset by falls in materials and energy stocks.
What happened last Friday, NAB Markets Today Research, extract
There was no respite for US stocks from the moment the Trump Truth Social outburst (on China tariffs) hit the wires about 90 minutes after the open, with all main indices losing further ground in the last hour to close on the lows.
After Trump’s posting, commentators have been quick to observe the November 1 deadline for the 100% additional tariffs and export control holds, coming two days after the scheduled Trump-Xi meeting, held out some hope for a renewed trade truce. The FT, for example, suggested Trump was creating room for a solution even though he had said there was no point in meeting Xi at the Apec forum.
Indeed, asked what would happen if China reversed the export controls, Trump said: “We’re gonna have to see what happens. That’s why I made it November 1. As for the meeting, Trump later said, “I haven’t cancelled, but I don’t know that we’re gonna have it. But I’m gonna be there regardless, so I would assume we might have it.”
Nasdaq fared the worst, down -3.6%. On the week, the Nasdaq fell -2.5% and the S&P500 down -2.4%.
US stock markets dragged global markets down with them, the news also eliciting a strong bid for US Treasuries, where yields fell plus/minus 10bps across the curve, and drove safe-haven flows into the Yen and Swiss Franc (but not the US dollar).
The AUD rediscovered its mantle as the currency market’s favourite ‘whipping boy’, losing -1.25% to 0.6475 (but is back above 0.65 in early Sydney trade). Bitcoin fared even worse, down -5.6% Friday and as much as -14% including weekend trade to a low of US$105k before recovering to US114k currently. Gold rose 1% to recapture the US$4,000 handle.
The University of Michigan preliminary October consumer sentiment survey shows sentiment virtually unchanged on September at a still-depressed 55.0 against a dip to 54.0 expected, while 5-10 year inflation expectations were unchanged at 3.7% as expected (1-year down to 4.6% to 4.7%)
CNBC reported Friday the list of Fed chair contenders has been narrowed to five following the latest round of Bessent interviews: Waller, Warsh, Hassett, Bowman and BlackRock’s Reider. CNBC said the individual selected by Trump could be nominated to the Fed –-though not necessarily as chair-– by January (i.e. straight after Miran’s current four-month term ends).
Fed Governor Waller told CNBC Friday he believes job growth has been negative for months now, which affects how quickly the Fed can cut rates.
“You can’t have negative job growth and 4% GDP growth.” That economic equation is not sustainable, he added. “I’m still in the belief we need to cut rates, but we need to kind of be cautious about it,” Waller said.
Anecdotally, Waller said CEOs and other business leaders are telling him they are not hiring any more. “The labor market is just not that strong,” he said, adding it’s shifted how he thinks about Fed policy.
St. Louis President Alberto Musalem said Friday he supported last month’s interest-rate reduction as a way to take out insurance against the weakening labor market, but reiterated officials need to continue leaning against elevated inflation.
“Looking ahead, I am open-minded about a potential further reduction in interest rates to provide further insurance against labor market weakening,” Musalem said. “I believe that we have to tread with caution, because there’s limited room for further easing before monetary policy could become overly accommodative.”
On Sunday Trump took an even more conciliatory line in a post on his Truth Social platform. “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment,” he wrote. “ … “He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”
For its part, China’s Commerce ministry said on Sunday that since the two countries held trade talks in Madrid last month, the US had “continuously introduced a series of new restrictions against China”, including putting Chinese companies on a trade blacklist.
“China’s position on tariff wars has been consistent: we do not want to fight, but we are not afraid to fight,” the ministry added. Incidentally, one source of Trump’s annoyance beyond the rate earths sphere is the refusal by China so far to ramp up purchases of soybeans from the US.
The other big political news Friday was that Tetsuo Saito, the leader of Japan’s Komeito party who have been coalition allies with the LDP since 1999, withdrew his party’s alliance. This was after his demand of new LDP leader Sanae Takaichi for stricter regulation on political funding, following a scandal that has dogged the LDP, was not forthcoming.
Without a reconciliation, this will force Takaichi to accelerate talks with smaller, populist parties in effort to form an effective government, failure of which would then greatly increase the chances of the LDP having to concede fresh elections. The news has cast a big shadow over ‘Takaichi-nomics’, hence the scale of the Nikkei futures loss compared to other markets.
Other political news Friday was that France’s President Macron has again re-appointed Sebastien Lecornu as Prime Minister, tasking him once again with trying to form a government and passing a budget for 2026.
ECB officials are increasingly weighing in on public policy outside of their monetary policy remit, the latest being Bundesbank President Joachim Nagel and Governing Council members Martins Kazaks.
Nagel, in a wide-ranging New York Times interview titled ‘Germany’s Top Economist Charts a Path Out of Europe’s Crisis’, warned against ‘complacency’ in European capitals over tariffs, competition with China and attacks on institutions. “When you are in a hurricane, you have this quiet in the eye of the storm…this may describe the European economy today”.
The answer, for him, is greater European integration, and he warned against underestimating the region’s ability to adapt to its challenges. Intensifying competition with China should be “an eye-opener for all European companies,” Mr. Nagel said.
But Europe is in a strong position to negotiate on trade with China because “they need us more than we need China,” he added. “Our most important market is Europe. It’s not China.” Nagel said he was not concerned about the strength in the euro.
In commodities, seemingly oblivious to the global news flow iron ore was, alongside gold, the only commodity we track to show gains on Friday (Iron ore +1.4%, gold 0.75%) with base metals all lower led by a -4.8% drop for copper (LMEX -2.5) and WTI crude down -4.2%.
Pullback, Correction, Or Meltdown? Yardeni Research extract
Trump Trade Turmoil hit the stock market hard on Friday as President Donald Trump raised the US tariff on Chinese imports from 30% to 130% in retaliation for China’s imposing severe export controls on its exports of rare earth minerals.
This all happened ahead of a summit meeting between Trump and Chinese President Xi scheduled for later this month. On Friday, Trump said he might not attend, then changed his mind.
If neither side were to blink, the US and Chinese economies would lead the global economy into a deep recession, if not a depression. But we expect that both sides will blink very soon given the extremely adverse consequences of a trade war between the world’s two biggest economies.
The S&P 500 dropped -2.7% on Friday, led by a -3.8% plunge in the Magnificent-7.
The S&P 500 fell close to its 50-day moving average on Friday. If it doesn’t find support there, it should do so at its 200-day moving average. That would mark a correction of roughly -10% from the index’s record high of 6753.72 on October 8.
On October 8, the S&P 500 exceeded its 200-day moving average by 11.8%. We doubt that the index will fall below this average during the current correction, assuming as we do that both sides will quickly negotiate a resolution of the trade conflict given the severity of the consequences to both.
The Information Technology and Communication Services sectors of the S&P500 remain particularly extended relative to their 200-day moving averages.
The good news is that Q3’s earnings reporting season starts this week; among the first to report will be the big banks, which likely beat analysts’ expectations. Industry analysts currently estimate that S&P 500 companies’ collective Q3 earnings per share rose 6.6% y/y. We estimate a 10.0% y/y increase.
The forward earnings of the S&P 500 rose to a record high of US$296.16 per share during the October 9 week. It should exceed $300 by the end of the year.
Stock market sentiment was overly bullish last week, but not exceedingly so based on Bull/Bear Ratios. Furthermore, fears of a bubble have been rising in recent weeks. The fact that a bubble has been widely feared might reduce the magnitude of the pullback.
The S&P500 VIX rose to 21.7 on Friday . The corporate junk bond spread remains very low, confirming that credit-quality concerns remain muted.
Interestingly, while the price of gold rose on Friday’s latest Trump Tariff Turmoil, the price of bitcoin fell sharply.
Corporate news in Australia
-Takeover talks between Blackstone and Iress ((IRE)) have stalled over price and due diligence access.
-Macquarie Group ((MQG)) is reportedly breaking up and selling the $2.5bn Paraway Pastoral in parts due to investor pressure.
-Boab Metals ((BML)) launched a $50m equity capital raising at 40c per share for early development if its lead-silver Sorby Hills project.
-JPMorgan has been appointed to seek buyers for Foresight Group’s 29.1% stake in Flinders Port Holdings, the owner and operator of the Port of Adelaide.
-Affinity Equity Partners is selling ScotPac, one of Australia’s largest non-bank lenders to SME’s.
-Morgan Stanley Infrastructure Partners is nearing a $1bn deal for Queensland waste firm BMI.
-Pacific Equity Partners (PEP) is leading a private equity buyout of FleetPartners Group ((FPR)) for $621m with rival bids from Bain and Mitsubishi Motors.
On the calendar today:
-NZ Aug Net migration
-JP Public Holiday
-CH Sept Trade Bal
-US Public Holiday
-ANZ GROUP HOLDINGS LIMITED ((ANZ)) CEO Strategy Update
-CIVMEC LIMITED ((CVL)) ex-div 3.5c (100%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 4000.40 | + 15.43 | 0.39% |
| Silver (oz) | 47.25 | – 0.47 | – 0.98% |
| Copper (lb) | 4.89 | – 0.24 | – 4.75% |
| Aluminium (lb) | 1.25 | – 0.02 | – 1.31% |
| Nickel (lb) | 6.89 | – 0.01 | – 0.09% |
| Zinc (lb) | 1.36 | – 0.01 | – 0.72% |
| West Texas Crude | 58.90 | – 2.55 | – 4.15% |
| Brent Crude | 62.73 | – 2.41 | – 3.70% |
| Iron Ore (t) | 105.74 | + 0.88 | 0.84% |
The Australian share market over the past thirty days…
| Index | 10 Oct 2025 | Week To Date | Month To Date (Oct) | Quarter To Date (Oct-Dec) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8958.30 | -0.32% | 1.24% | 1.24% | 9.80% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| COG | COG Financial Services | Downgrade to Hold from Accumulate | Ord Minnett |
| CSC | Capstone Copper | Downgrade to Accumulate from Buy | Morgans |
| CYL | Catalyst Metals | Upgrade to Buy from Accumulate | Morgans |
| IMD | Imdex | Upgrade to Accumulate from Hold | Morgans |
| LYC | Lynas Rare Earths | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| PDN | Paladin Energy | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| PNR | Pantoro Gold | Downgrade to Trim from Hold | Morgans |
| RMS | Ramelius Resources | Upgrade to Buy from Accumulate | Morgans |
| TCL | Transurban Group | Upgrade to Hold from Trim | Morgans |
| VEE | Veem | Downgrade to Accumulate from Buy | 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.)
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CHARTS
For more info SHARE ANALYSIS: ANZ - ANZ GROUP HOLDINGS LIMITED
For more info SHARE ANALYSIS: BML - BOAB METALS LIMITED
For more info SHARE ANALYSIS: CVL - CIVMEC LIMITED
For more info SHARE ANALYSIS: FPR - FLEETPARTNERS GROUP LIMITED
For more info SHARE ANALYSIS: IRE - IRESS LIMITED
For more info SHARE ANALYSIS: MQG - MACQUARIE GROUP LIMITED