The Monday Report – 09 February 2026

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This story features WOODSIDE ENERGY GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: WDS
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

A sharp recovery in risk-on assets, bitcoin, and precious metals coincided with a forceful rally across US indices with the Dow Jones hitting 50,000 for the first time.

After a challenging week for investors, ASX200 futures are pointing to a strong follow-through for the local market, as earnings season kicks off in earnest this week.

Good Morning,

The ASX200 fell -160 points or -1.81% last week amidst weaker commodity prices and general risk-off selling.

The RBA announced its first-rate hike in two years, up 25bps to 3.85%, with a hawkish outlook.

Volatility in stock moves accelerated on Friday as reporting season is warming up, albeit slowly at this early stage. 

What happened last week, Tony Sycamore, IG extract

US equity markets staged a sharp rebound at the end of a highly volatile week, as overextended positioning in precious metals and tech stocks clashed with disappointing jobs data and geopolitical worries.

Once the dust settled, however, the rotational flows seen at the start of last week, moving from tech into cyclical stocks, continued. This shift was initially sparked earlier in the week by a stronger-than-expected US manufacturing PMI reading.

The Dow Jones emerged as the clear winner, surging 1,223 points (up 2.50%) for the week to close at a fresh record high above 50,000 for the first time ever. In contrast, the S&P500 finished fractionally lower (down -0.10%), while the Nasdaq100 fell around -1.87%, weighed down by valuations, AI disruption fears, and concerns over AI capex commitments.

For those anticipating this rotation to persist, one way to express the view is to go short the Nasdaq and long the Dow Jones. 

To account for the Nasdaq’s significantly higher volatility relative to the Dow, it is important to adjust position sizing rather than trading dollar-for-dollar. This helps normalise the trade’s volatility while capturing the relative performance spread. 

This type of trade is commonly referred to as pairs trading, a relative value trade, a rotation trade, or a long/short equity spread on indices.

Looking ahead to this week, earnings season dials back a notch in intensity, with reports due from names like Spotify, Robinhood, Lyft, McDonald’s, Cisco, Airbnb, Rivian, Twilio, and Coinbase.

On the economic front, the key domestic event is the delayed January Non-Farm Payrolls report.

Last month (December), the US economy added just 50,000 jobs, falling short of expectations for a gain of around 60,000 and coming in below November’s downward revised figure of 56,000.

Despite the weak headline hiring number, the unemployment rate edged lower to 4.4%, down from a revised 4.5% in November (which had been the highest level since October 2021).

The January Non-Farm Payrolls report is expected to show 70,000 jobs added, with the unemployment rate expected to hold steady at 4.4%.

The US interest rate market starts the day pricing in roughly -58bps of Fed cuts for 2026, with the first -25bp move expected in July and a second in December.

NAB Market’s Today extract

Data releases on Friday included Industrial Production (IP) for Germany and Spain, the Canadian Jobs report and an update on US consumer confidence and consumer credit. 

The IP data for Germany and Spain were soft, coming in well below expectations. The -1.9% fall in German IP was notable given that there was a rise of 3% in construction output (manufacturing output was down -3%).

While the data prints were disappointing it should be noted that it follows two months of strong gains recorded in October and November. 

Of note in the Canadian jobs report was the fall in the unemployment rate to 6.5% (from 6.8%) which is the lowest rate since September 2024.

While employment growth fell in the month, this does follow strong gains recorded in previous months. 

The preliminary US University Michigan sentiment read showed solid gains in sentiment (rising to the highest level since August) – with most of the gains seen in current conditions, supported by a meaningful fall in 1-year inflation expectations (to 3.5% from 4.0%).

Longer term inflation expectations ticked a little higher to 3.4% (from 3.3%).

On the labour market, consumers see a high probability of job loss –the highest since July 2020– and 60% expect the unemployment rate to rise over the next 12 months.

It should be noted that that the shift to web-only responses for the Michigan survey appear to have reduced its predictive power. 

US consumer credit rose by the most in a year with total credit outstanding rising US$24bn in December following an increase of US$4.7bn in the previous month.

Looking at the breakdown, non-revolving credit (eg cars, school tuition) rose by US$10bn while revolving rose US$13.8bn to be the largest increase in two years. The increase may reflect holiday season shopping where it has been reported spending was at record levels, however, it also fuels current concerns around the household balance sheet.

Fed Vice Chair Jefferson was out speaking on Friday, delivering a cautiously optimistic tone on the US outlook, arguing that easing tariff-related inflation and strong productivity gains should help guide inflation back to the 2% target.

He noted the Fed’s recent policy moves have positioned the federal funds rate near neutral. With inflation risks seen as temporary, he emphasised the Fed will maintain flexibility to respond to evolving economic data.

The Japanese election was held on Sunday, and the Japanese Prime Minister Takaichi is poised for the biggest post war election victory. 

At the time of writing the Liberal Democratic Party has secured 316 seats of the 465-seat lower house; an outcome which is seen to give the PM the mandate to deliver her spending plans.

In an interview on Sunday the PM said the LDP fought the election on a series of major policy shifts and “If we won the public’s support, then we truly must tackle these issues with all our strength’. While financial markets had already reacted to the prospect of a strong victory –-buying stocks, selling JGB’s and selling the yen-– there is an expectation that this price action will continue to start the week given the strong result.

Equity markets ended the week on a strong note with US indices out-performing peers. US stocks closed up 2-2.5% with a notable rise in chipmakers, the Philadelphia Stock Exchange Semiconductor index (gauge of chipmakers) closed up 5.6%, recovering just over 60% of the loses recorded post Anthropic’s announcement of a new automation tool.

Nvidia Corp’s Jensen Huang comments in a CNBC interview that demand for AI is “incredibly high” appeared to support the bid. Huang also noted the build out of AI infrastructure will continue for seven to eight years (forecast capital expenditure in 2026 from four of the largest US tech companies totals a massive USD650bn).

The Dow Jones closed above 50,000 for the first time (it closed above 40,000 for the first time back in May 2024). 400 shares in the S&P 500 closed higher. 

European stocks lagged the rally in US stocks, but they did close higher on the day; Stoxx600 up 0.8% (led by tech stocks). Of note though was the decline (as much as -30%) in Stellantis (makers of Fiat and Jeep) following its warning to the market of a -EUR22bn charge for a ‘significant overestimation’ of EV vehicle shift.

For commodities, it was a volatile 24 hours for silver which traded a range of US$64 to US$77.9 through Friday. Silver gapped lower in the early Asia session, before recovering and closing at the US session at its intra-day high and up 9%. The oil price closed a little higher but also had a choppy session as investors digested news on US and Iran relations.

For bonds, the price action on Friday was subdued compared to what was seen in equities and commodities. 

Turning to currencies, the USD was lower on the day with risk sensitive currencies (including AUD) the strongest performers. 

Domestically, this week provides an update on both the consumer and businesses. December household spending data are released on Monday, with NAB expecting some payback following the strong gains of the previous two months, and consumer confidence are released on Tuesday.

NAB’s business survey is also released on Tuesday, before lending indicators on Wednesday. In addition, RBA Assistant Governor Hunter’s speaks Thursday on full employment and the labour market, while RBA Deputy Governor Hauser participates in a fireside chat Wednesday

In the US, non-farm payrolls, originally due Friday 6th, will now be released next Wednesday, with expectations for around a 70k jobs gain and the unemployment rate to hold at 4.4%. CPI has been pushed from Wednesday to Friday with the early consensus looking for 0.3% core CPI. Also during the week are retail sales and the employment cost index.

Market Call: Dow at 70,000 by 2029, Yardeni Quicktakes extract

“Through the roof.” That’s how Nvidia’s CEO Jensen Huang described AI infrastructure spending in his excellent interview with Scott Wapner on CNBC this past Friday, February 6.

Huang described the current landscape as a “once-in-a-generation infrastructure buildout,” specifically highlighting that demand for Nvidia’s Blackwell chips and the upcoming Vera Rubin platform is “sky-high.” He emphasized the shift from experimental AI to AI as a fundamental utility has reached a definitive inflection point for every major industry.

Investors were clearly comforted by Huang’s comforting words. Earlier in the week, they trashed the stocks of the four hyperscalers (AMZN, GOOGL, META, and MSFT) after the companies announced plans to increase spending collectively by more than 60% from historic 2025 levels to a whopping US$700 billion this year.

In our Friday morning QuickTakes, we wrote: “That’s freaking out investors, who are worrying that such massive spending might not pay off. However, all that spending in just this year will certainly provide lots of revenues and earnings to the companies that are vendors to the hyperscalers. The economy will also get a big boost from so much capex.” 

Huang also dismissed concerns about overspending, stating the capital investments are “appropriate and sustainable” because they lead to “profitable tokens” and rising cash flows. He was interviewed during CNBC’s “Closing Bell” on Friday. 

The three-part bottom line: The hyperscalers’ cash flow will increase as a result of all their capex, their humongous spending will boost the broad economy, and that’s bullish for a broadening of the Roaring 2020s stock market!

Also “going through the roof” after Huang used that expression was the DJIA, which rose above 50,000 for the first time ever. The DJTA (transports) also rose to a new record high. Dow Theory remains bullish.

The fact the “delivery” side of the economy (transports) is confirming the “production” side (Industrials) suggests the market currently views the 2026 growth story as fundamentally solid.

We are still forecasting DJIA at 70,000 by the end of the Roaring 2020s.

Over the past few years, the permabears have warned the bull market was too concentrated in the Magnficent-7 stocks, which include the four hyperscalers. They observed that with more than 30% of the S&P500’s market capitalization in just seven stocks, the stock market was vulnerable to a sharp selloff should any or all of them trip up for any reason. 

Four of the Mag-7 are in the DJIA (AAPL, AMZN, MSFT, and NVDA). They have underperformed ytd. That didn’t stop the DJIA from reaching a new record high on Friday.

Also rising to a new record high on Friday was the S&P500 equal-weight stock price index. It is up 5.5% year-to-date, while the S&P500 market-weight price index is up 1.3% which shows the drag of larger-capitalization stocks’ poorer relative performance. 

The sectors that mostly underperformed the S&P500 last year have outperformed so far this year.

On a relative basis, the MAGS ETF has underperformed the XMAG ETF since November 3, 2025, after Michael Burry publicly announced he was shorting the AI trade on October 27. We began to recommend under weighting the Mag-7 on December 7, 2025.

Meanwhile, industry analysts continue to raise their expectations for S&P500 operating earnings in 2027. That’s important because the forward earnings of the index, which rose to another record high last week, is converging toward the analysts’ 2027 earnings estimate, which is currently at US$363.03 per share. We are still forecasting US$350.00.

The breadth of positive y/y percent changes in the forward revenues and forward earnings of the S&P 500 continues to improve.

Industry analysts are also turning more upbeat on the outlook for S&P500 long-term earnings growth.

We asked Michael Brush for an update on insider buying activity:

“Insider buying picked up sharply on the weakness last week. That’s a bullish statement on the stock market and also the economy because their buying was concentrated in cyclicals.

Focusing on the larger, more meaningful buys, actual insiders invested over US$15 million across two dozen companies, a sizeable increase from prior weeks’ levels.

Their buying was concentrated in industrials, chemicals, electrical components, banks, and consumer-facing companies. Investors considered insiders because of large holdings (10% owners) put over US$140 million into their holdings, also a relatively large increase.”

Corporate news in Australia

-Shell may sell $2bn stake in Woodside Energy’s ((WDS)) North West Shelf LNG project

-Global Investment Partners launches $565m/year Pacific National sale with JPMorgan

-Scape abandons Keyton deal which is likely to impact on Lendlease Group’s ((LLC)) asset sale plans

-Pepper Money ((PPM)) is approaching privatisation in KKR fund-to-fund transaction

-News Corp ((NWS)) is anticipating a sizeable payout from Anthropic’s copyright settlement as it pressures AI businesses to pay for its content

-RZ Resources is looking at $1bn ASX listing as US demand for critical minerals explodes

-Cobre ((CBE)) is raising $50m at 15c share to help fnd the acquisition of Chile’s Sierra Atacama mine

On the calendar today:

-AU Dec Household Spending

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

-DEXUS CONVENIENCE RETAIL REIT ((DXC)) earnings report

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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