The Overnight Report: Meta Up, Microsoft Down

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This story features NINE ENTERTAINMENT CO. HOLDINGS LIMITED, and other companies.
For more info SHARE ANALYSIS: NEC
The company is included in ASX200, ASX300 and ALL-ORDS

US markets recovered into the close from intraday lows, led by large moves in Microsoft, its shares falling nearly -10% and Meta shares rallying 10% in the opposite direction, with extreme precious metal price volatility.

After a soft day yesterday, ASX200 futures are pointing to a positive Friday session.

Good Morning,

The ASX200 slipped -6 points yesterday with technology leading the falls, down -1.9%.

Yet again, materials outperformed, boosted by gold miners.

ResMed’s ((RMD)) December quarter result is out and on first impression consensus forecasts have been beaten.

What happened overnight, NAB Markets Today Research extract

US and European stocks endured a risk off session overnight led by a sharp slump in Microsoft’s shares amid AI investment concerns (continued high level of investment, not enough return just yet).

Core bond yields eased slightly while the USD recovered a little bit of ground after falling during our day session yesterday.

Commodity markets were very volatile, with gold and silver snapping sharply lower after reaching unprecedented levels and then rebounding late in the day, while oil extended recent gains amid ongoing US -Iran tensions.

Meanwhile, iron ore edged on news China has effectively scrapped its property-sector borrowing limits.

The White House and Senate Democrats are nearing a deal to prevent a partial US government shutdown by advancing five already-approved spending bills that would fund most of the federal government, while separating out the contentious Department of Homeland Security (DHS) funding.

This approach would keep the government running for the fiscal year and postpone negotiations on immigration enforcement, as the DHS would instead be funded through a short-term measure, allowing more time to address proposed restrictions on immigration policy.

Of note too, the House is out this week and it’s not scheduled to return until Monday, so there could be a short (weekend) lapse in funding.

The US trade deficit widened sharply in November to US$56.8bn from US$29.2bn as imports rebounded and exports fell, reversing October’s unusually low reading (16y low) and underscoring volatility driven by shifting tariff policies.

Goods exports dropped back, partly due to unwinding earlier gold-related spikes while imports surged on pharmaceuticals and AI-related computer equipment. The big widening in the deficit resulted in a big drag on GDP nowcasts models like the Atlanta Fed’s GDPNow falling to 4.3% from 5.4%, still predicting very strong outcome for Q4, although there are a lot more data (Dec) still to come.

US Initial jobless claims were little changed, dipping to 209K from 210K and coming in slightly above expectations, while continuing claims fell to 1.83m, undershooting consensus.

That said, Pantheon economics notes the persistently low level of claims is less a sign of labour-market strength and more a reflection of softer-than-usual seasonal hiring in Q4.

Unadjusted payrolls across retail, wholesale, transport and logistics rose by -195K less over the three months to December than during the same period in 2024, suggesting underlying labour demand remains cooler than the claims data alone imply.

In other Trump led news, the President said he had persuaded Vladimir Putin to pause Russian bombing in Ukraine ahead of an extreme cold snap, while separately ordering the reopening of U.S. airspace to Venezuela after speaking with the country’s acting president in a step toward restoring ties following the Maduro raid. 

He also signalled he will announce his pick for the next Federal Reserve chair next week and reiterated his belief that interest rates should be two to three percentage points lower. 

Any nominee may face confirmation hurdles in the Senate, where Republican Senator Thom Tillis has vowed to block Fed appointments until the Justice Department’s probe into the central bank concludes.

US equities retreated from record highs as Microsoft suffered its worst session since 2020, losing -US$357bn in market cap falling -9.99%, but off the lows of -12%, and accounting for over two-thirds of the S&P500’s decline.

Concerns centred on rising investment spending, slower Azure growth, and a longer runway to monetising AI. Offsetting some pressure, Meta surged over 10% and IBM gained 5.13% on strong earnings, while Southwest Airlines jumped over 18% on upbeat long-term guidance.

The S&P500 recovered from intraday lows to end down -0.13 while the NASDAQ fell -0.76%. Small US stocks were not immune to the sell off with the Russel2000 down -0.41%.

Earlier in the session the Eurostoxx600 ended the day -0.23% and in Asia yesterday the CSI300 led the regional gains, climbing 0.76% while the Hang Seng gained 0.51%. 

A relaxation in property regulations in China provided support to pro-cyclical exposures. China is no longer requiring regular reporting on the ‘3 red lines’ policy imposed on property developers in 2020.

The news contributed to large gains in the stocks of Chinese property developers and supported base metals. Iron ore prices rallied and copper futures traded to a record high.

Sticking with commodities, precious metals saw some of the most extreme price action of the day: gold surged near US$5,600/oz before crashing below $5,200 within hours, ultimately ending down -1% at around $5,300. Silver experienced a similar reversal. The US administration policies both domestic and offshore have contributed to the recent volatility.

After falling over -2.6% in the previous four days, the USD is finding some stability, easing a little during our session yesterday and then recovering some ground overnight.

Yesterday the AUD had gained initially following the developments in China and rally in base metals (intrady high of 0.7094) which saw NZD/USD trade up towards 0.6090.

However, both the AUD and NZD dropped sharply alongside equities and the retracement in metals overnight. The AUD now trads at 0.7031 (-0.1% lower over the past 24 hrs) and NZD is at 0.6068, -0.4%).

Treasury markets saw modest strength overnight, with the 10-year yield slipping to 4.24% from 4.26%.

The White House/Senate deal as well as sell off in equities supported the move with core yield in europe also edging down.

Gilts outperform, with 5-year yields down -5bps while german bunds yields decline across the curve (10y -3 to 2.83%).

Overnight AU Bond futures followed the move in UST yields, with the 10y Bond future climbing to 95.18, up 4.5bps while the 3y gained 2.5 bps to 95.74.

Gold demand trends, World Gold Council extract

Total gold demand in 2025, including OTC, exceeded 5,000t for the first time. Combined with the record-breaking run in the gold price –-setting 53 new all-time highs during the year-– this yielded an unprecedented value of US$555bn (up 45% y/y).

Heightened investment activity drove overall demand growth: global gold ETF holdings grew 801t –-the second strongest year on record-– while bar and coin buying accelerated to reach a 12-year high.

Safe-haven and diversification motives were consistent themes driving investment interest throughout the year, along with price-driven motivations.

Central bank purchases of 863t reached the upper end of our expected 2025 range; they remain historically elevated and geographically widespread but have slowed from their recent pace.

A decline in jewellery demand volumes was entirely expected in the environment of successive record gold price highs. Sentiment towards gold jewellery, however, remained very positive, as evidenced by the value of global demand, which climbed 18% to a record US$172bn.

Technology demand was stable despite disruption in the consumer electronics space, supported by continued growth in AI-related applications.

Tense geopolitics look set to be a major contributor to gold’s fortunes again in 2026, supporting a continuation of elevated central bank demand, strong gold ETF inflows, and robust bar and coin demand.

Jewellery weakness is likely to persist and a strong recycling response seems unlikely.

Bond market uncertainty, expected policy rate cuts and pressure on the US dollar are likely key factors supporting continued strength across gold investment sectors

Jewellery spend should remain healthy, absent economic shocks, but tonnage demand will likely experience similar weakness to 2025.

Central bank demand is expected to be solid at levels close to those in 2025.

Mine supply and recycled gold are likely to reach similar levels to last year, with miners incentivised by high margins and recycling firm but constrained.

Corporate news in Australia 

-Nine Entertainment ((NEC)) is planning to sell its radio network, with Arthur Laundy tipped as the possible buyer

-Macquarie Asset Management ((MQG)) is apparently negotiating with UniSuper ahead of the $11.6bn bid for Qube Holdings ((QUB)) 

-Mayne Pharma ((MYX)) is seeking legal cost from failed Cossette takeover

-ioneer ((INR)) has launched a $72m capital raising at a discount to encourage investors

-Brightstar Resources ((BTR)) has launched a $150m capital raising to fund construction of Goldfield hub

-Wiluna Mining to relist via $400m IPO as the gold price surges

-Rare earths stocks fell yesterday on reports the US Administration does not support mandated floor prices for their products

On the calendar today:

-AU Dec Pvt Sector Credit

-AU Dec Qtr PPI

-JP Dec Unemployment

-EZ Flash 4Q GDP

-US Dec PPI

-CREDIT CORP GROUP LIMITED ((CCP)) 1H26 Earnings

-JUPITER MINES LIMITED ((JMS)) Dec Qtr Activity

-MACH7 TECHNOLOGIES LIMITED ((M7T)) Dec Qtr Update

-ORIGIN ENERGY LIMITED ((ORG)) Dec Qtr Activity

-PLS GROUP LIMITED ((PLS)) Dec Qtr Activity

-RESMED INC ((RMD)) 2Q26 Earnings

-VULCAN ENERGY RESOURCES LIMITED ((VUL)) Dec Qtr Activity

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

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