Daily Market Reports | 9:41 AM
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The company is included in ASX100, ASX200, ASX300 and ALL-ORDS
US markets took a breather with profit taking most apparent in technology stocks as Fed Chair Powell stated we are in "challenging times" and President Trump pushed back on looming shutdown negotiations with the Democrats.
The ASX200 rallied for a third straight day on Tuesday with futures pointing to a weak start ahead of the August CPI print at 11.30am AEST.
| World Overnight | |||
| SPI Overnight | 8852.00 | – 31.00 | – 0.35% |
| S&P ASX 200 | 8845.90 | + 35.00 | 0.40% |
| S&P500 | 6656.92 | – 36.83 | – 0.55% |
| Nasdaq Comp | 22573.47 | – 215.50 | – 0.95% |
| DJIA | 46292.78 | – 88.76 | – 0.19% |
| S&P500 VIX | 16.64 | + 0.54 | 3.35% |
| US 10-year yield | 4.12 | – 0.02 | – 0.56% |
| USD Index | 96.86 | – 0.11 | – 0.11% |
| FTSE100 | 9223.32 | – 3.36 | – 0.04% |
| DAX30 | 23611.33 | + 84.28 | 0.36% |
Good Morning,
The Australian market closed higher, posting three days of gains with the ASX200 up 35pts or 0.4% to 8845.9. Consumer staples, REITS and Technology stocks fell. Today, the August CPI reading will likely determine the market’s direction.
NAB expects the headline CPI indicator to remain steady at 2.8%yoy.
Key movers in the month will be a fall in electricity prices as rebates in NSW are reintroduced, though base effects from a year ago will see the yoy rate tick higher.
The release will also include updates on inflation for a range of market services – these were relatively benign in Q2 and are expected to remain moderate.
What happened overnight, NAB Markets Today Research
Global markets paused for breath as Federal Reserve Chair Jerome Powell delivered a measured address, reiterating the Fed’s dual mandate and the “challenging situation” posed by upside inflation risks and downside employment risks.
US equities retreated from record highs, with the S&P500 down -0.55% and NASDAQ off 0.-95%. Amazon and Nvidia led declines in megacaps, while IPO activity remained robust, with Klarna and Netskope leading September’s charge.
Newly public companies delivered strong returns, and Nvidia reassured clients about its OpenAI partnership. European equities fared better, with the Euro Stoxx600 up 0.28%, supported by positive German PMI data.
The latest PMI surveys painted a picture of regional divergence. In the Eurozone, the composite index edged up to 51.2, driven by a strong rebound in German services (52.5) and composite (52.4), offsetting ongoing weakness in French services (48.9) and manufacturing (48.1).
France’s recovery has stalled amid political uncertainty, while Germany’s services sector posted its strongest expansion in a year, though manufacturing slipped.
UK PMIs softened, with services falling to 51.9 and manufacturing to 46.2, as export demand slumped and firms cited weaker sales to the US and Europe.
S&P Global noted a litany of worries, including weakening growth and further job losses. In the US, flash PMIs showed manufacturing at 52.0 and services at 53.9, both in expansion but decelerating.
Regional surveys were mixed: Richmond Fed activity weakened, while Philadelphia Fed services picked up modestly but remain soft overall.
Powell’s speech in Providence reiterated the Fed’s current dilemma noting “Near-term risks to inflation are tilted to the upside and risks to employment to the downside — a challenging situation”.
He described policy as “modestly restrictive” and stressed the need to balance both sides of the mandate.
Powell avoided signaling the next move, instead emphasising data dependence. Governor Bowman struck a more dovish tone, warning the Fed may need to lower rates more quickly as labour market dynamism fades, and expressing confidence that tariff impacts on inflation will be short-lived. Atlanta Fed President Bostic remained vigilant on inflation, noting the need to stay on guard after years above target.
In a similar vein, Chicago’s Goolsbee advocated caution, suggesting rates could come down gradually if stagflationary pressures ease, but warned against aggressive easing with inflation still elevated.
President Trump delivered a strongly worded speech at the UN, criticising migration and climate policies, denying climate change, and questioning the UN’s effectiveness. He called for an end to “open borders” and lambasted European migration policy, while also referencing the wars in Gaza and Ukraine.
On Russia and Ukraine, Trump supported NATO’s right to shoot down Russian aircraft violating airspace and expressed support for Ukraine to reclaim its territory, though he stopped short of promising security guarantees. On the Ukraine, Trump also emphasised the need for Europe to play a greater role.
US Treasuries rallied, with yields -2 to -4bp lower across the curve and a flattening bias. The 10-year yield ended at 4.10%, near the lows in an overnight range of 4.10-4.14, the decline in yields was supported by solid demand at the 2-year auction.
Fed speak elicited muted reactions, with Powell reiterating the “no risk-free path” mantra. UK gilts outperformed Bunds, with 10-year gilt yields down 3bp to 4.68%, while Bunds closed unchanged at 2.75%.
The US dollar was little changed, oscillating in a tight range. EUR/USD consolidated near 1.18, supported by German PMI strength. The AUD is little changed relative to levels 24 hours ago, after trading to an overnight high of 0.6615, the pair now trades at 0.6599.
Moving to commodities, gold surged to a fresh record above US$3,765/oz, buoyed by China’s push to become a custodian of foreign sovereign gold reserves. Oil rebounded, with WTI up 1.74% to US$63.73, as traders weighed the impact of Ukrainian strikes on Russian refineries and the risk of Moscow curbing diesel exports. European leaders signalled intent to end Russian oil purchases by year-end, adding to bullish sentiment.
In other news, President Trump is still not keen on government shutdown negotiations, demanding Democrats drop health care and Medicaid demands before agreeing to talks.
The risk of a prolonged government shutdown has increased, with potential negative implications for economic growth and market sentiment.
Bandwidth Then, Data Centres Now? Steve Sosnick, Interactive Brokers
One of the questions I’m asked most frequently is whether the current market environment reminds me of the internet bubble of the late ‘90s. My short answer is “history doesn’t repeat, but it often rhymes”.
The enthusiasm for all things related to artificial intelligence is akin to that of the dawn of the internet, though many of the circumstances are quite different. That said, I am wondering if the frenzy to build ever-larger data centers is reminiscent of the race to add bandwidth in the prior era.
This is something I was pondering a few days ago when Oracle announced a huge boost to forward guidance that was largely propelled by a US$300bn, five-year data center commitment from OpenAI.
When we first wrote about it on the morning of September 10th, I was not yet fully aware that the lion’s share of the guidance stemmed from that specific deal. As I noted in an interview later that day,
… [Y]ou are correct in pointing out the risks inherent in the market’s complete revaluation of Oracle… Not only are Oracle stockholders crucially dependent upon the company meeting its guidance, but the broader market is, too.
This is indeed a monstrous commitment from a company (OpenAI) that burns prodigious amounts of cash and has reported in May to expect losses of US$44 billion before turning profitable in 2029. Remember, that was before they committed to spending US$300bn with Oracle.
Spending of this magnitude can only be achieved if investors are willing to finance it. So far, that has hardly been a problem – investors have been eager to get a piece of the action from OpenAI and other companies in the AI space. But it became one in 2000 when investors began to concern themselves with profits over promise.
I was reminded of this today somewhat by chance. I happened to be awaiting my turn for a media appearance when it turned out that the guest before me was the CEO of CoreWeave. His stock has been a phenomenon since going public earlier this year, but it too is a money burner. On a rolling four-quarter basis, the company lost over -US$900 million, and analysts project losses for at least the next two years, though at smaller magnitudes. Yet I believe that if Coreweave announced a secondary offering tomorrow, it would be lapped up by eager investors.
Will that be the case forever, especially after that CEO acknowledged that AI infrastructure will require trillions in investment? Can we assume that investors will be perpetually willing to finance investments of that magnitude even if the near-term returns are scant?
I recall something similar with bandwidth during the internet rollout. There was a huge rush to wire the country and the world for the coming internet era. That bandwidth eventually proved necessary and profitable, but it took more time and money than most investors expected during the heady rally.
It also consumed some of the biggest names at the time. Two of them proved to be outright frauds, Enron and Worldcom, but others like Global Crossing and Northern Telecom also fell by the wayside. There was huge over-investment that needed to be reckoned with – expensively.
Now, far be it from me to accuse any company of being an Enron-style fraud. I have no evidence of that, nor do I want to portray even the slightest hint of casting that type of aspersion. But the AI-ecosystem is tightly bound, with Nvidia as the nexus. Their largest customers include names like Microsoft, Amazon, Alphabet, and Meta Platform, all of whom are indeed highly profitable and currently able to sustain a high level of investment into AI projects. But will they want to do so indefinitely?
Nvidia in turn is a huge customer of Coreweave and Super Micro Computer. If there are cutbacks in Nvidia spending from the big boys, that will spill back into the smaller beneficiaries. There is more fragility than the market might recognize.
While I sincerely hope there are no Enrons or Worldcoms lurking out there, there very well might be some Global Crossings or Northern Telecoms lurking. It’s all great while the momentum is favorable, but it can turn ugly very quickly if not.
And for now, as I literally just saw a headline that Nvidia plans to invest up to US$100bn in OpenAI, the music is still playing – loudly.
For more reading on the same topic, see https://fnarena.com/index.php/2025/09/18/openai-tech-boom-bubble-disruption/
Corporate news in Australia
-Telix Pharmaceuticals ((TLX)) announced the US centres for Medicare & Medicaid Services granted transitional pass-through payment status for Gozellix.
-Canyon Resources ((CAY)) is raising $200m at 26c per share for working capital at its Minim Martap project and increasing its stake in Camrail to 35% from 9.1%.
-UBS has been appointed to review the sale of Infratil’s ((IFT)) equity in medical imaging business Qscan, valued at circa $400m.
-Bevan Slattery is seeking an investor for specialised subsea cable owner and operator, Subco.
On the calendar today:
-AU Aug Inflation Indicator
-JP Sept PMIs
-US Aug Building permits
-US Aug existing home sales
-US Aug Mortgage App
-GENESIS ENERGY LIMITED ((GNE)) ex-div 6.45c
-IMDEX LIMITED ((IMD)) ex-div 1.00c (100%)
-KMD BRANDS LIMITED ((KMD)) earnings report
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3796.90 | + 15.80 | 0.42% |
| Silver (oz) | 44.27 | – 0.05 | – 0.11% |
| Copper (lb) | 4.64 | – 0.01 | – 0.23% |
| Aluminium (lb) | 1.20 | – 0.00 | – 0.31% |
| Nickel (lb) | 6.85 | + 0.04 | 0.53% |
| Zinc (lb) | 1.31 | – 0.00 | – 0.35% |
| West Texas Crude | 63.65 | + 1.28 | 2.05% |
| Brent Crude | 67.85 | + 1.27 | 1.91% |
| Iron Ore (t) | 105.49 | 0.00 | 0.00% |
The Australian share market over the past thirty days…
| Index | 23 Sep 2025 | Week To Date | Month To Date (Sep) | Quarter To Date (Jul-Sep) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8845.90 | 0.83% | -1.42% | 3.55% | 8.42% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| COH | Cochlear | Downgrade to Neutral from Buy | Citi |
| EBO | Ebos Group | Upgrade to Neutral from Sell | Citi |
| FMG | Fortescue | Upgrade to Neutral from Sell | UBS |
| MIN | Mineral Resources | Downgrade to Neutral from Buy | UBS |
| PEN | Peninsula Energy | Upgrade to Buy, High Risk from Hold | Shaw and Partners |
| PME | Pro Medicus | Upgrade to Buy from Sell | Citi |
| PTM | Platinum Asset Management | Downgrade to Hold from Buy | Bell Potter |
| RRL | Regis Resources | Downgrade to Sell from Neutral | UBS |
| STO | Santos | Upgrade to Buy from Accumulate | Ord Minnett |
| VAU | Vault Minerals | Downgrade to Neutral from Buy | UBS |
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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