Daily Market Reports | 8:51 AM
This story features SPARK NEW ZEALAND LIMITED, and other companies.
For more info SHARE ANALYSIS: SPK
The company is included in ASX300 and ALL-ORDS
US markets finished higher on Friday led by an ongoing rebound in technology stocks and the Nasdaq.
The Australian market lifted on Friday but finished the week down (-0.87%) with ASX200 futures suggesting a positive start to what will probably be a quiet trading week.
| World Overnight | |||
| SPI Overnight | 8640.00 | + 41.00 | 0.48% |
| S&P ASX 200 | 8621.40 | + 33.20 | 0.39% |
| S&P500 | 6834.50 | + 59.74 | 0.88% |
| Nasdaq Comp | 23307.62 | + 301.26 | 1.31% |
| DJIA | 48134.89 | + 183.04 | 0.38% |
| S&P500 VIX | 14.91 | – 1.96 | – 11.62% |
| US 10-year yield | 4.15 | + 0.04 | 0.85% |
| USD Index | 98.25 | + 0.12 | 0.12% |
| FTSE100 | 9897.42 | + 59.65 | 0.61% |
| DAX30 | 24288.40 | + 88.90 | 0.37% |
Good Morning,
Sydney was scorching hot on the weekend and there was a lot of soul-searching and mental healing going on near Bondi Beach; thousands of additional Epstein files have been released (many heavily redacted); the 2025 Ashes are Australia’s; the local share market is poised for a positive start in what is otherwise likely to remain a relatively quiet week.
The bourse pulls up stumps at 2.10pm on Wednesday.
Tony Sycamore, IG extract
The ASX200 finished 75 points (down -0.87%) lower last week at 8621, taking its lead from a soft first four days on Wall Street, and as the hawkish tone of the RBA overshadowed end-of-year enthusiasm.
The key event on the local calendar this week are Tuesday’s RBA Board meeting minutes. At the meeting, the Reserve Bank of Australia kept the cash rate unchanged at 3.60%, as widely anticipated, marking the third consecutive hold.
The decision came with a hawkish tone in the accompanying statement. Key observations included inflation appearing more broad-based, strengthening private sector growth, a recovering housing market, a still-tight labour market, capacity utilisation remaining above long-run averages, elevated unit labour costs, and the potential for further capacity pressures if private demand continues to accelerate.
RBA Governor Michele Bullock’s subsequent press conference reinforced this hawkishness, noting a rate cut was not considered, while the Board did discuss scenarios that could warrant a hike. She emphasised the RBA’s tightening bias, stating that “if it looks like inflation is not coming back to the band then the Board will have to take action, and it will”.
The upcoming minutes will be closely scrutinised for deeper insights into potential triggers and timing around a first-rate hike or a shift back toward a neutral policy stance.
The Australian interest rate market starts the week pricing in 9bp of RBA rate hikes for February. There are 25bp of rate hikes priced for July and a cumulative 41bp of rate hikes priced between now and the end of 2026.
US equity markets gained on Friday, led by a rebound in tech stocks after strong earnings from Micron Technology helped ease concerns around lofty valuations and high debt levels. For the week, the Nasdaq100 gained 0.59% and the S&P500 edged 0.1% higher, while the Dow Jones lost -323 points (-0.67%).
Building on Thursday’s 10.2% gain, Micron Technology finished 7% higher on Friday at US$265.92, after the company delivered better-than-expected earnings, alongside a strong outlook. Elsewhere, Nvidia finished 3.93% higher at US$180.00, extending its rebound from critical support at US$170 as the US launched a review that could allow the sale of advanced AI chips to China.
Meanwhile, Oracle jumped 6.35% to US$191.92 after TikTok’s Chinese owner, ByteDance, signed a binding agreement to hand control of the app’s US operations to a group of investors, including the cloud computing giant. In contrast, Nike slumped -10.54% to US$58.71 after revealing a sharp decline in China sales, a contraction in gross margins, and weaker-than-hoped guidance for Q3.
Looking ahead, the focus in a holiday-shortened week will be on Wednesday morning’s Q3 GDP print. The US economy grew at an annualized 3.8% in Q2 according to the final (third) estimate from the Bureau of Economic Analysis (BEA).
This marked a sharp turnaround from the -0.6% contraction in Q1, driven primarily by surging consumer spending, robust business investment (particularly AI-related), and a significant drop in imports, which boosted net exports.
Due to the federal government shutdown, the BEA canceled the advanced estimate for Q3 and will combine it with the second estimate this week—effectively serving as the first official print.
Market expectations for this “second” estimate centre on a moderation from Q2’s pace. Consensus forecasts cluster around 2.5%, though it is worth noting the Atlanta Fed’s GDPNow model is tracking at 3.5% as of December 16.
This is expected to confirm the US economy was on solid footing before the government shutdown began on October 1.
The US interest rates market starts the week pricing in roughly -16.5bp of cuts for the March FOMC meeting, with about- 60bp embedded between now and the end of 2026.
“Santa”, Are you still coming, Lance Roberts, The Bull Bear report extract
The short answer appears to be “yes.”
However, it seems to be narrower, later, and more fragile than the headline mythology suggests.
Importantly, the official “Santa Claus rally” window has not even started yet, as it is statistically measured as the last five trading days of the year plus the first two of January. Historically, that seven-session stretch has produced an average gain of about 1.3% and finishes positive “nearly 80% of the time,” according to data analysis from the long-running Stock Trader’s Almanac.
However, given the recent sloppy and weak trading in the market, it is unsurprising investors are questioning whether “Santa Will Visit Broad & Wall” this year. So, don’t give up hope just yet that investors’ stockings will be filled with Christmas cheer.
According to Goldman Sachs, absent anything actively bad, stocks seem to drift upward for a variety of reasons such as year-end window dressing, share buybacks, and performance chasing.
A rosier 2026 economy, deregulation, AI, and the fundamental premise that corporate stories will improve are also tailwinds.
“Barring any major shocks, it will be hard to fight the overwhelmingly positive seasonal period we are entering and the cleaner positioning set-up.”
[Goldman’s Gail Hafif].
Currently, what matters is whether the market is positioned to enter the “Santa Rally” window with sufficient internal support to sustain a year-end bid.
After a weak and volatile first half of December, price action improved as the week drew to a close, with both employment and inflation reports supporting further Fed rate-cutting policies.
U.S. equities rebounded on renewed strength in mega-cap/AI leadership, following the UAE’s commitment of US$100 billion. According to the WSJ, OpenAI aims to raise as much as US$100 billion from sovereign-wealth funds. Given the UAE was a previous investor, it now has little choice other than to continue funding further commitments.
Furthermore, Reuters captured the tone shift succinctly: “we’re beginning to see some stabilization… for the Christmas year-end rally to resume,” noting tech had been under pressure before the bounce.
However, “intact” does not mean “easy”.
First, breadth is not uniform, and conviction remains selective. Schwab described the market’s posture as “selective, rather than broad”, while noting roughly 56% of S&P500 stocks were above their 50-day moving averages. That is a healthy level, but not the kind of participation that makes rallies durable without interruption.
Secondly, sentiment is elevated, and positioning risk is creeping back in. As shown, the National Association of Investment Managers Index surged to levels that have usually preceded pullbacks. However, that does not negate Santa seasonality; it does, however, raise the odds that any rally could be short-lived in January.
Bottom line: The Santa Rally remains viable because the overall trend remains constructive and liquidity expectations are supportive. However, the market is also priced for good news.
In such an environment, the rally likely depends on continued stabilization in leadership, contained yields, and no surprise shocks that force de-risking into thin holiday liquidity.
Yardeni Quick Takes extract: Seeing Reindeer & Solid S&P500 Earnings
We believe the S&P500 has been in a Santa Claus rally since it bottomed on November 20 at 6538. It is up 4.5% since then through Friday’s close.
Over the past 10 years, the average increase in the S&P500 from the start of November through the end of the year has added 4.5 percentage points to its return.
The S&P500 is up 16.2% year-to-date. It is on track to be the third consecutive year of double-digit gains. We expect another earnings-led 10%-plus increase in 2026 to 7700 for the S&P500.
During the week of December 12, industry analysts’ consensus estimates for S&P500 earnings per share for 2025, 2026, and 2027 were US$272, US$312, and US$358. They expect a 14.7% increase in earnings next year and 14.6% in 2027. Our estimates for the next two years are similar at US$310 and US$350.
S&P500 forward earnings rose to US$312 last week, putting the current forward P/E at 21.9 times (x). In 2026, forward earnings will converge to the 2027 consensus earnings estimate, which has been rising rapidly in recent weeks.
The analysts are bullish about 2026. We are too.
Industry analysts currently estimate that S&P500 revenues rose 6.4% this year, will increase 6.9% next year, and will rise 7.0% in 2027. Those are very optimistic estimates given the average increase since the start of the data in 1993 is 4.5%.
However, that average includes recessions. Industry analysts normally do not anticipate recessions when projecting revenues and earnings. In our Roaring 2020s scenario, they might be right not to do so.
Also consistent with our unfolding Roaring 2020s narrative is the analysts’ consensus outlook for the S&P500 profit margin. It is currently expected to rise from 13.3% this year to 14.3% and 15.4% over the next two years.
Earlier this year, industry analysts significantly lowered their earnings expectations for Q1 and Q2, mainly due to mounting concerns that tariffs would weigh on revenue and narrow profit margins.
The results were much better than expected. Analysts didn’t lower their estimates before the Q3 earnings reporting season. Yet, once again, the results handily beat their estimates.
Now, their Q4 estimates are drifting higher, but the government shutdown might have depressed earnings. In addition, the Magnificent-7’s Q4 results may not be as magnificent given their data centre spending.
Industry analysts expect solid double-digit growth in S&P500 earnings per share over the four quarters of 2026. Their growth expectations have been increasing in recent weeks.
The forward earnings growth of the S&P500 Magnificent-7 has been very strong in 2025, but so has that of the S&P500 Impressive-493. We expect to see the bull market rotate away from the former toward the latter in 2026.
That’s because the Mag-7 are facing more competition in the AI race from one another as well as from other companies.
The Impressive-493 should benefit from this competition, using new AI technology to boost their productivity and profit margins.
Corporate news in Australia
-Spark NZ ((SPK)) has partnered with Challenger ((CGF)) to establish a new financing structure for interest-free plans to mobile handset customers
On the calendar today:
-AU RBA Dec Meeting Minutes
-US 3Q GDP (Initial)
-US Oct Durable Goods (Advance)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 4387.30 | + 22.20 | 0.51% |
| Silver (oz) | 67.49 | + 2.09 | 3.20% |
| Copper (lb) | 5.51 | + 0.08 | 1.53% |
| Aluminium (lb) | 1.34 | + 0.02 | 1.47% |
| Nickel (lb) | 6.61 | + 0.13 | 2.07% |
| Zinc (lb) | 1.40 | + 0.01 | 0.47% |
| West Texas Crude | 56.52 | + 0.62 | 1.11% |
| Brent Crude | 60.47 | + 0.76 | 1.27% |
| Iron Ore (t) | 106.92 | + 0.02 | 0.02% |
The Australian share market over the past thirty days…
| Index | 18 Dec 2025 | Week To Date | Month To Date (Dec) | Quarter To Date (Oct-Dec) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8588.20 | -1.25% | -0.30% | -2.95% | 5.26% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| BOE | Boss Energy | Downgrade to Neutral from Buy | Citi |
| BOQ | Bank of Queensland | Upgrade to Accumulate from Hold | Morgans |
| JDO | Judo Capital | Upgrade to Buy from Accumulate | Morgans |
| LOV | Lovisa Holdings | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| NSR | National Storage REIT | Downgrade to Neutral from Buy | UBS |
| TWE | Treasury Wine Estates | Upgrade to Neutral from Sell | Citi |
| Downgrade to Lighten from Hold | Ord Minnett | ||
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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For more info SHARE ANALYSIS: CGF - CHALLENGER LIMITED
For more info SHARE ANALYSIS: SPK - SPARK NEW ZEALAND LIMITED