Daily Market Reports | 8:36 AM
This story features COCHLEAR LIMITED, and other companies.
For more info SHARE ANALYSIS: COH
The company is included in ASX50, ASX100, ASX200, ASX300 and ALL-ORDS
S&P500 and Nasdaq reached new all time highs, with gold and bitcoin coming along for the ride.
Politics in France and Japan created divergent market performances.
After a lacklustre start to the week, with much of Australia enjoying a public holiday, ASX200 futures are pointing to a mildly positive start.
| World Overnight | |||
| SPI Overnight | 9017.00 | + 10.00 | 0.11% |
| S&P ASX 200 | 8981.40 | – 6.00 | – 0.07% |
| S&P500 | 6740.28 | + 24.49 | 0.36% |
| Nasdaq Comp | 22941.67 | + 161.16 | 0.71% |
| DJIA | 46694.97 | – 63.31 | – 0.14% |
| S&P500 VIX | 16.37 | – 0.28 | – 1.68% |
| US 10-year yield | 4.16 | + 0.04 | 1.04% |
| USD Index | 97.77 | + 0.35 | 0.36% |
| FTSE100 | 9479.14 | – 12.11 | – 0.13% |
| DAX30 | 24378.29 | – 0.51 | – 0.00% |
Good Morning,
The Australian market traded lower on Monday, despite the ASX200 topping 9000 earlier in the session, the first time since August.
On lower volumes, the market slipped -6pts with six of eleven sectors closing in the red.
Tech fell -1.4% while materials rose 0.6%.
What happened overnight, NAB Markets Today Research
A combination of Japanese and French news has driven most of the price action over the past 24 hours with another announcement from Open AI sparking yet another tech induced uptick in the US equities.
Overnight, markets were gripped by renewed political uncertainty in France after Prime Minister Sebastien Lecornu’s surprise resignation.
President Macron now faces three unenviable options: appoint a new prime minister, dissolve the National Assembly and call snap elections, or, least likely, resign himself.
The deadlock has heightened concerns over France’s fiscal outlook and its ability to pass a budget, with the far-right National Rally (RN) leading in polls should elections be called. The prospect of an RN-led government, with limited governing experience and ambiguous fiscal plans, is an unsettling scenario for investors and EU politics.
Markets reacted swiftly to the French news. French 10-year yields rose 6bps to 3.57%, while the spread to German Bunds widened to 85bps, the highest since January. The French 30-year yield closed 7bps higher at 4.40%. French equities underperformed, with the CAC40 down -1.4%.
The euro initially fell -60 pips to just above 1.1650 before recovering, reflecting both political risk and broader eurozone uncertainty. German and UK long bonds also sold off, with Bund and gilt yields up 2bps and 4bps, respectively.
US Treasury yields moved higher overnight, reflecting both global and domestic fiscal concerns. The 10-year yield rose to 4.16%, up 2 basis points during the overnight session and 4 basis points from Friday’s level, with the curve steepening as long-term Treasuries underperformed. This move was in line with similar trends seen in Europe and Asia, where fiscal uncertainty and political developments weighed on bond markets.
The US government has now started its second week of shutdown with no clear signs of an end to the impasse, Democrats are refusing to provide the votes the ruling Republicans need to reopen federal departments, unless an agreement is reached on extending expiring “Obamacare” health care subsidies.
Meanwhile Rep. House Speaker Mike Johnson told his members not even to report to Congress unless the Democrats cave, insisting any health care negotiation be held after re-opening the government. Analyst expect the shutdown could last a few weeks before some agreement is reached.
In Japan, the shock selection of Sanae Takaichi as LDP leader over the weekend and likely next prime minister triggered a sharp rally in equities, with the Nikkei surging 4.8% to a record high.
Takaichi, a known proponent of fiscal and monetary stimulus, is expected to maintain an expansionary policy stance. Her adviser, Etsuro Honda, signalled that an October BoJ rate hike is unlikely, but left the door open for a December move.
Market pricing now sees virtually no chance of an October hike, but a 57% probability for December, down from 80% last week. The yen weakened further, with USD/JPY breaking above 150 and up nearly 2% from last week’s close.
Equity markets elsewhere were mixed. US indices were led higher by tech shares after AMD announced a landmark deal with OpenAI to supply AI infrastructure, sending AMD shares up as much as 38% (closing up 23.7%).
The S&P500 rose 0.4%, marking a seventh consecutive gain, while the Nasdaq outperformed, and the index is up 47% in the last six months. In contrast, European equities lagged, weighed down by French political risk, and the Nikkei’s 4.8% rally stood in stark contrast to declines in the CAC40 and muted moves in the ASX200.
In FX, the yen was the clear underperformer, while the AUD and NOK held steady. The AUD starts the new day at 0.6619, close to its overnight high (0.6620) after trading to an intraday low of 0.6591, the AUD was supported by resilience in commodity prices and a positive outlook for gold exports.
Notably, the Australian government (Department of Industry, Science and Resources said in a report) now projects gold will become the country’s second-most valuable commodity export, overtaking LNG, as prices surge to record highs. Gold revenues are forecast to reach $60 billion in 2025–26, nearly double the level two years ago, offsetting declines in LNG and coal.
Commodities saw further gains, with gold punching to successive highs, nearing US$4,000/oz, driven by central bank buying, Fed rate cuts, and geopolitical risks. Oil prices rose 1.5% after OPEC-Plus agreed to a modest 137,000 bpd production increase for November, less than feared, while supply risks persist due to ongoing attacks on Russian refineries.
Brent traded around US$65.50/bbl, and WTI settled at US$61.69/bbl.
Finally, in the Middle East, delegations from Hamas and Israel began indirect talks in Egypt under President Trump’s Gaza peace plan, aiming to end the nearly two-year war.
Mediators are working towards a mechanism for the release of hostages and prisoners, with negotiations expected to last several days.
The BBC notes the talks will see Egyptian and Qatari officials holding shuttle meetings with delegations from both Israel and Hamas separately, negotiations come on the eve of the second anniversary of the Hamas-led attack on southern Israel on 7 October 2023.
Awaiting earnings season, Franklin Templeton extract (Oct 3)
-Federal fund futures are calling for two more interest-rate cuts in 2025. There is a 98% chance of a -25bp cut in October and a 90% chance of a -25bp cut in December.
-Two-year Treasury note yields are about -50 bps below the fed funds rate, which is another indication that two more rate cuts are likely this year.
-Breakeven inflation rates were flat week-over-week. One-year breakeven rates are 2.65%, two-year breakeven rates are 2.58% and five-year breakeven rates are 2.40%. If these rates, which reflect market pricing, turn out to be accurate, they indicate the US Federal Reserve (Fed) will not achieve its 2% inflation target during the next five years.
-Government shutdowns historically have not been a significant problem for equity markets. Since 1976, there have been 21 shutdowns. There has typically been some market weakness at the start of the shutdowns, but by three months afterwards, the S&P500 was up 3% on average, with a 67% hit rate.
Looking to the one-year time frame, the S&P500 was up 90% of the time, with an average return of 12% for all 21 shutdowns. Stock prices follow earnings, and a government shutdown won’t likely impact earnings for the majority of companies.
-The US dollar has been steady, with the US Dollar Index (DXY) around 98. It is flat relative to the stock market’s low point for the year last April.
-The S&P500 Index is getting a little overbought recently with a Relative Strength Index (RSI) of 70. The last three times we have reached this level, the tape has pulled back -2% to -3%. The same can be said for the Nasdaq Composite Index, with an RSI of 71. We regard periods of weakness as potential opportunities for investing at more attractive prices.
-Down in the market-capitalization stack, the S&PMidCap 400 Index and the Russell2000 Index do not appear to be overheated. The same can be said for the equal-weight S&P 500. The average stock looks good.
-Our most recent research paper explores global equity and fixed income market returns when the Fed cuts rates after a pause. Much like the data we saw in our US-focused paper, equity returns have been strong in such cutting cycles. Emerging market equities have led with an average one-year return of 27%.
-Did you know that on a year-to-date (YTD) basis, the Russell2000 Growth Index is ahead of the Russell1000 Value Index? As we know from our US-focused paper, average returns for the Russell2000 are positive 20% when the Fed resumes cutting rates. We believe this is an indicator that it may be a favorable time to consider increasing small-cap exposure.
-The tape is broad. YTD, all 11 S&P industry sectors have positive returns through October 2. This participation is significantly stronger than has been the case for much of the past 5 years.
-YTD, the S&P500 is ahead of MSCI Europe Index in local currency. All of Europe’s outperformance is a result of currency appreciation.
-We remind you that the consensus outlook is for the S&P500 to end 2025 in the range of 6400-6800, based on the views of Franklin Templeton investment professionals in our Global Investment Management Survey.
– The wall of worry remains in place. According to the American Association of Individual Investors’ weekly survey, 43% of respondents were bullish. This is well below the complacency level of about 60%.
-Similarly, we see in the survey that 57% of respondents were either neutral or bearish.
Corporate news in Australia
-Saluda Medical is preparing an $150m IPO giving the company a $1bn valuation, led by former Cochlear ((COH)) executive John Parker.
-CommBank ((CBA)) has moved all its core banking system into Amazon’s cloud, AWS, departing from the bank’s mainframe servers nine days ago.
-Igneo Infrastructure Partners signed a deal to sell Clarus Group for nearly NZ$2bn with Brookfield buying Clarus’ gas distribution and pipelines operations.
On the calendar today:
-AU Sept ANZ-Indeed job ads
-AU Westpac-MI Consumer Sentiment
-CH Public Holiday
-US Aug Consumer Credit
-US Aug Trade Bal (suspended)
-REECE LIMITED ((REH)) ex-div 11.90c (100%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3984.55 | + 75.65 | 1.94% |
| Silver (oz) | 48.46 | + 0.50 | 1.04% |
| Copper (lb) | 5.05 | – 0.06 | – 1.19% |
| Aluminium (lb) | 1.23 | + 0.00 | 0.33% |
| Nickel (lb) | 6.91 | – 0.00 | – 0.02% |
| Zinc (lb) | 1.36 | – 0.01 | – 0.75% |
| West Texas Crude | 61.75 | + 0.87 | 1.43% |
| Brent Crude | 65.55 | + 1.02 | 1.58% |
| Iron Ore (t) | 104.48 | + 0.12 | 0.11% |
The Australian share market over the past thirty days…
| Index | 06 Oct 2025 | Week To Date | Month To Date (Oct) | Quarter To Date (Oct-Dec) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8981.40 | -0.07% | 1.50% | 1.50% | 10.08% |
| 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 |
| WAF | West African Resources | Downgrade to Underperform from Outperform | 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.)
(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: CBA - COMMONWEALTH BANK OF AUSTRALIA
For more info SHARE ANALYSIS: COH - COCHLEAR LIMITED
For more info SHARE ANALYSIS: REH - REECE LIMITED