The Overnight Report: Crash, Bang, Smash

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This story features NEUREN PHARMACEUTICALS LIMITED, and other companies.
For more info SHARE ANALYSIS: NEU
The company is included in ASX200, ASX300 and ALL-ORDS

US markets fell again, led by Technology stocks, again, with silver crashing -15% and bitcoin continuing its sell-off, down over -13%.

uranium was not immune.

After a sell off in miners yesterday, ASX200 futures are pointing to more selling pressure for Friday's session.

Good Morning,

The Australian market fell on Thursday led by profit taking in miners.

The ASX200 declined -39 points or -0.4%.

Consumer stocks and banks outperformed.

What happened overnight, ANZ Bank, Australian Morning Focus extract

Equity markets were under downward pressure as the corrective price action continued. At the time of writing the S&P500 was down -0.7% and finished down -1.23%, the euro Stoxx50 was off -0.7% and the FTSE100 was down -0.5%.

The yield on the US 10y Treasury note fell to 4.188%. Oil was weaker. WTI fell -2.98% to US$63.20bbl. Gold fell -2.43% to US$4,832oz.

The US Challenger job cuts report for January confirmed 108.4k layoffs, the highest January total since 2009. The 12m rolling sum is 1.265m, also the highest level of layoffs since 2009.

The 12-month data is now at levels that normally are associated with US recessions.

We continue to believe that labour market weakness will require lower interest rates and do not warrant a prolonged pause in the easing cycle.

The JOLTS data are showing falling demand for labour. Job openings fell -386k in December to 6.54m.

Based on the January Challenger job cuts report, the January ADP private payrolls report and the end-December job openings data, there is no evidence of a recovery in the US labour market.

Both demand for labour and hiring is weakening, continuing the established theme of 2025 when the economy generated the slowest jobs growth since 2003, excluding recessions.

It could be argued the labour market, outside the healthcare and education sectors, is in a hiring recession and that monetary policy is too restrictive when measured against the recent pace of jobs growth.

Excess labour supply is building and that is disinflationary. We see no reason for a prolonged pause in the rate cutting cycle based on available labour market data.

The BoE and ECB left policy rates unchanged. The BoE’s hold was a close call, with 4 of the 9 member MPC voting for a -25bp rate reduction, including the two deputy governors.

We expect the MPC will cut rates -25bp next month – the first in a series of three 2-5bp rate cuts this year.

The ECB maintained its view that inflation will stabilise around 2.0% over the medium term and said it is determined to ensure that is the case.

Our analysis concludes underlying disinflation momentum is intensifying. We expect the ECB will need to cut rates again (two -25bp cuts) this year.  

There are no significant economic data releases or events in New Zealand, Australia or China today. 

Commodities

Precious metals were hit with a fresh wave of selling, which weighed on sentiment across the metals complex. Oil fell amid easing geopolitical tensions.

Copper struggled to hold gains from earlier in the week as signs of weaker demand in China weighed on sentiment.

Inventories of copper rose in London Metal Exchange warehouses in Asia. This was coupled with reports of easing in Chinese buying, with fabricators and manufacturers said to lack the appetite to chase the market higher.

Daily refined copper spot trading volumes across the country totalled 25,300t on Wednesday, down from a three-month peak of 38,121t on Monday, according to Mysteel Global data.

Nevertheless, the underlying fundamentals remain positive. The State Grid Corp of China announced a 35% jump in fixed asset investment to CNY30.8bn in January on ultra-high voltage grids and pumped storage power stations.

Supply side issues also remain a concern. Anglo American cut its outlook for copper output from its operations to between 700-760kt in 2026, from the previously forecast range of 760-820kt. It cited issues at its flagship Collahuasi mine in Chile.

In a sign the US remains driven in its desire to shore up supply chains of critical minerals, the White House announced plans to take a stake in Glencore’s Congolese copper operations.

This comes after the Trump administration hosted a critical minerals summit with 55 countries to reduce dependence on China and ensure stable access to key resources.

The US pitched the use of price floors and a flood of US private equity investment, according to statements from the US Trade Representative’s office.

Silver fell sharply, wiping out its two-day recovery as a fresh wave of selling hit the market. Spot silver plunged as much as -18% to fall below US$73/oz. After building up large positions in January, the market remains dominated by speculative and CTA positioning.

This is despite ongoing structural tightness in the physical market. This volatility is likely to remain high until these positions have been unwound.

The selloff in the gold market was a little bit more contained due to greater liquidity and less aggressive positioning by investors.

Iron ore prices are threatening to break below US$100/t for the first time since November 2025 amid the broader selloff across the industrial metal sector. Weaker fundamentals are also at play.

Stockpiles at Chinese ports have been building in recent weeks as the industry enters the seasonal shutdown period over the Lunar New Year. Supply has also been building. Iron ore shipments from Australia, including Port Hedland totalled 9.3mt in the week to 23 January, up from 8mt in the previous week.

Crude oil fell for the first time in three days amid signs of easing supply risks. Iran confirmed it would hold negotiations with the US, allaying concerns of US military action which could threaten oil exports from the OPEC member.

Iranian Foreign Minister, Abbas Araghchi, confirmed talks will be held in Oman on Friday. However, the two sides remain well apart, leaving tensions elevated.

This should see the geopolitical risk premium remain in place. Traders are also following Ukraine peace talks this week. Those talks could be put on hold after Russia renewed attacks on Ukraine’s energy infrastructure this week.

North Asia LNG prices held steady around USD11/mmbtu as overall demand from the region remained subdued. Only pockets of buying have emerged in recent week from smaller consumers such as Thailand and Vietnam. European natural gas managed to eke out a small gain as weather forecasts turned colder for the second half of the month, putting further strain on tight inventories.

Amazon misses on market expectations after the close with the stock trading down circa -7%. Amazon CEO, Andy Jassy said,

“With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, low earth orbit satellites, we expect to invest about US$200 billion in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital”.

AI is both a blessing and a curse: Yardeni Quicktakes extract

Our December 11, 2025, Quicktakes was titled “AI CALL: The TIME Curse & The Game of Thrones”.

The TIME Cover Curse hit AI in mid-December when the magazine featured “The Architects of AI” as the 2025 TIME Person of the Year.

We wrote: The AI trade is turning into a Game of Thrones. In the past, the Magnificent-7 had their own kingdoms surrounded by big moats. They each had their unique monopolies. But now they are competing in the AI race, threatening one another’s kingdoms. That’s why we recommended under-weighting the Magnificent-7 in Sunday’s QT, anticipating that the bull market will broaden to the S&P 493 in 2026.”

In our December 18, 2025, Quicktakes, we warned, “The Mag-7 may be undergoing a correction similar to the DeepSeek correction earlier this year. … In recent weeks, investors have started to fret that the [AI infrastructure] spending is depleting the Mag-7s’ cash flows and slowing profits growth. 

Before AI, the Mag-7 had lots of cash flow because their spending on labor and capital was relatively low. That changed once AI forced them to spend much more on both. They found themselves competing more with one another to win the AI race.”

The stock market is down again today, even though Alphabet reported fabulous revenues and earnings. However, the company also announced it would double its 2025 capex to US$175-US$185 billion in 2026. 

The ratio of the S&P500 Magnificent-7 ETF (MAGS) to the Impressive-493 ETF (XMAG) peaked at a record high of 3.09 on November 3, a few days after Michael Burry trashed the AI trade in an October 27 post. It is down to 2.76 around noon today.

The selling of both the Mag-7 and, more broadly, the tech sector may be getting a bit overdone. There are certainly AI-related tech stocks that will make lots of money in this space.

We aren’t feeling as opportunistic about bitcoin’s plunge. Indeed, we’ve been negative on the cryptocurrency ever since the GENIUS Act was enacted on July 18 of last year. It gave the government’s seal of approval for the use of stablecoin, which is backed by Treasury bills and other liquid assets.

That eliminated the transaction demand for bitcoin, which is proving to be a very poor store of value!

Michael Burry is now warning the free-fall in bitcoin, which is down below US$68,000 at around noon today, will trigger a selloff in gold and silver. We doubt bitcoin sellers own much in precious metals.

The question is: Will the selloff in bitcoin cause crypto-treasury companies to implode, as their falling stock prices suggest they might? If they do, we doubt their calamity would trigger a systematic financial crisis.

The underperformance of the Mag-7 and the S&P500 Information Technology sector is causing the US MSCI to underperform the All Country World ex-US MSCI. On December 7, 2025, we switched our equities strategy recommendation from Stay Home to Go Global.

In US economic news, initial unemployment claims increased by more than expected but remain very low.

Challenger announced job layoffs rose in January to 108,400. The series has been very volatile for the past year.

We prefer initial unemployment claims as a measure of layoffs.

Corporate news in Australia

-Neuren Pharmaceuticals ((NEU)) shares lost almost -10% after it was announced the FDA only provided written feedback on its NNZ-2591 treatment

-Regal Partners ((RPL)) announced a $75m share buyback

-Rio Tinto ((RIO)) has walked away from Glencore merger talks over valuation issues

-Maas Group ((MGH)) shares sank after it announced the sale of its construction materials business for $1.703bn with AI-focused reinvestment

-KKR backs HMC Capital’s ((HMC)) green push with $600m investment

-Koala IPO plan impacted by sell-off in small cap industrials

-Healthscope lenders back plan to become a non-profit, keeping 32 hospitals open

-Ardea Resources ((ARL)) wins $1bn funding for nickel-cobalt project from US and Australia

On the calendar today:

-CHARTER HALL RETAIL REIT ((CQR)) 1H26 Earnings

-NEWS CORPORATION ((NWS)) 2Q26 Earnings

-REA GROUP LIMITED ((REA)) 1H26 Earnings

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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