The Monday Report – 23 February 2026

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

US markets rallied on the Supreme Court's ruling to stike down President Trump's "Liberation Day" tariffs. 

Trump’s subsequent threat to introduce a new global tariff (10% and then lifted to 15% on Saturday) is likely to keep trade policy uncertainty elevated.

After a weak performance on Friday, ASX200 futures are moderately positive.

Australia will be among the first markets to respond to President Trump's Truth Social posts on 15% global tariffs.

Good Morning,

While on/off, on/off announcements about US import tariffs will dominate market sentiment today, the local results season rolls on.

Early reports this morning have seen Fisher & Paykel Healthcare ((FPH)) upgrade earnings guidance, Perenti ((PRN)) increasing its dividend for shareholders and Nuix ((NXL)) reporting a net profit versus a loss previously.

There will be a lot more, today and up until Friday:

https://fnarena.com/index.php/reporting_season/

What happened last week, Tony Sycamore, IG extract

The ASX200 finished 163 points (1.84%) higher last week at 9081, building on a 2.4% gain from the previous week.

The ongoing February reporting season has provided a strong tailwind for the ASX200, with better-than-expected results from key heavyweights across banking, energy, and resources offsetting isolated disappointments.

The best performing sectors last week were IT (5.88%), Energy (4.12%), Industrials (3.07%) and Telcos (+2.79%).

In contrast, Real Estate (-1.68%), Consumer discretionary (-1.02%), Consumer Staples (-0.74%) and the Utilities (+1.06%) sectors underperformed the broader market. 

What happened overnight, NAB Markets Today extract

Friday was a busy night of important data releases, but the US Supreme Court’s (SCOTUS) decision to strike down President Trump Liberation Tariffs (IEEPA) dominated the narrative and price action.

SCOTUS’ ruling sparked a relief rally in equities and initially supported Treasuries before that move faded.

Trump’s subsequent threat to introduce a new global tariff (10% and then lifted to 15% on Saturday) kept trade policy uncertainty elevated but did little to derail risk appetite.

In a 6-3 decision, written by Chief Justice John Roberts, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, affirming limits on executive power in trade policy. 

IEEPA was the basis of Trump’s tariffs on Mexico, Canada, and China last February and the “reciprocal” tariffs he levied on almost every country in the world on Liberation Day.

The Court emphasized the power to impose tariffs is a core taxing authority vested exclusively in Congress under Article I of the Constitution. The ruling also noted that in nearly five decades since IEEPA’s enactment, no President had used it to impose tariffs, reinforcing the view that such authority was never intended.

The dissenters argued regulating imports has historically included tariffs and that foreign-affairs powers justify broader delegation, but the majority rejected this interpretation as inconsistent with constitutional structure.

Importantly too, the high court did not specify how the federal government would refund the estimated US$130bn to US$200bn collected under the tariffs. In his dissent, Justice Brett Kavanaugh warned that issuing refunds would present practical challenges and said it would be “a mess”. The case will now return to the Court of International Trade to oversee the refund process.

Reacting to the news, on Friday President Trump denounced the ruling and announced a 10% global tariff under a different authority—Section 122 of the Trade Act of 1974. Then on Saturday, the President announced the global tariffs will be lifted to 15%, effective immediately.

The provision under 122 Section permits tariffs of up to 15% for a maximum of 150 days. Once that window expires, Trump has indicated the measures would shift to the 301 framework of the Trade Act, which enables more enduring tariffs.

However, that mechanism requires investigations lasting several months (150 days enough?) before any duties can take effect.

Thinking about implications for the US, global economy and markets, the first observation to make is that IEEPA tariffs may be dead, but Trump’s trade regime isn’t. The administration has several avenues it can pursue (as per above), these are likely to be litigated over several years, but there are no signs President Trump is planning to back down.

Another conclusion is the tariff landscape is now more uncertain than before, uncertainty is not good news for any economy or market (For instance, this morning Bloomberg is reporting the EU will propose freezing the EU trade deal ratification process with the US until they receive more details).

Unless commonsense prevails, we could be entering a circular process where new tariffs are announced, then potentially overturned (with the right for refunds), only for new tariffs to be announced, and we do the dance again. That said, if other Trump policies are any guide, then maybe some sort of deal will eventually be reached. Until then, buckle up!

Then, it is also true that cancelation of tariffs, refunds and new tariffs are not exactly like for like. This means there are going to be winners and loser.

Firms that paid the tariffs are entitled for rebates, but what happens to consumers that paid higher prices?

As for the 15% global tariff, at this stage it is unclear what products could be exempted. This is very important for many Australian exporters (beef, wine, etc). 

Then there is the issue of countries like Australia, that import more from the US than what they export to the US, do they have a legal defence to avoid the global tariff? 

Finally, it is also worth adding that if the US pays back the IEEPA tariffs, a refund of around US$170bn will be equivalent to 0.5 to 0.6% of GDP. A big hit to the Federal fiscal position.

Before moving onto market, Friday was also a jam-packed day of important data releases.

Starting with the US, Q4 GDP rose at a 1.4% annualized rate, well below the consensus, 2.8%. GDP growth during Q4 was dragged down by a government shutdown and DOGE-linked cuts to federal spending, but underlying private-sector momentum remained solid, though increasingly unbalanced.

Consumer spending grew at a steady 2.4% annualized pace, while private investment rose 2.6%, driven almost entirely by surging AI-related outlays, as non-residential and residential investment continued to contract and non-tech equipment spending slumped. 

Government spending fell -5.1%, subtracting nearly a full percentage point from growth, largely due to a sharp but partly temporary drop in federal outlays.

Stripping out volatile trade, inventories and government effects, final sales to private domestic purchasers rose a healthy 2.4%, matching recent trends.

Looking ahead, our friends in Pantheon economics note consumption is expected to slow as households’ spending has increasingly relied on a falling saving rate, confidence remains subdued, income growth is softening, and tighter financial conditions limit the scope for a repeat of past credit- or savings-driven spending booms.

The other important US data release on Friday was the December Core PCE (personal consumption expenditures price index), the Fed’s preferred measure of underlying inflation.

The index rose by 0.36% in December, slightly above the consensus, 0.3%, and the most in nearly a year. On an annual basis, the core PCE, which excludes food and energy, climbed 3%, compared to 2.8% at the start of 2025 and also above the consensus, 2.9%.

Ahead of the GDP data release (about an hour or so before), President Trump lamented the shutdown impact on GDP, posting in Truth Social “The Democrat Shutdown cost the U.S.A. at least two points in GDP. That’s why they are doing it, in mini form, again. No Shutdowns!”. The President also criticized and called on Fed Chair Powell to lower interest rates.

For the record, other US data releases included new home sales dipping to 745K in December, from 758K in November while the U of Michigan Consumer Sentiment index showed a marginal improvement in February, edging up to 56.6 from a previous reading of 56.4.

Moving onto the preliminary PMI reports for February, the surveys point to a clear divergence across regions: in the US, the composite PMI fell to 52.3, a 10-month low, as both services (52.3) and manufacturing (51.2) softened, signalling growth cooling toward circa 2% in Q1 amid policy uncertainty, weak orders, soft hiring and mixed inflation signals (easing goods prices but still-elevated services prices).

In contrast, the euro area saw modest improvement, with the composite PMI rising to 51.9 as manufacturing returned to expansion (50.8) and services held at 51.8, led by Germany’s rebound while France remained mixed, implying slow but stabilising growth. 

The UK stood out as the strongest performer, with the composite PMI climbing to 53.9 —the highest since April 2024— supported by firm services activity and improving manufacturing, including strong export orders, even as employment continued to decline, highlighting resilience in activity despite a still-soft labour market.

US equities finished Friday firmly higher and capped a solid week, with markets reacting positively to the Supreme Court decision striking down President Trump’s sweeping tariff programme.

The S&P500 rose 0.7% on Friday and gained 1.1% over the week, while the Nasdaq outperformed with a 0.9% daily rise and a 1.5% weekly advance, snapping its longest run of weekly losses since 2022.

The Dow added 0.5% on Friday and 0.3% over the week. Investors largely looked through Trump’s subsequent threat to introduce a fresh 10% global tariff, judging that legal and implementation hurdles would delay any immediate impact. It remains to be seen if 15% tariffs change the mood on Monday.

Friday’s US equity rally was led by trade-sensitive and consumer discretionary names. Lululemon, Constellation Brands, Mattel and Five Below all surged, extending weekly gains of more than 4.5% as tariff relief supported margin expectations. 

Big tech also rebounded after recent valuation-driven weakness, with Amazon up 5.7% on the week, Nvidia +3.8%, Apple +3.4% and Meta +2.5%. Palantir and Broadcom also ended the week higher. Health care (-0.32%) and Energy (-0.72%) were Friday’s underperforming sectors.

European equities also closed higher on Friday, supported by earnings momentum and easing concerns around stretched AI valuations. The EuroStoxx600 rose 0.8% on the day and finished the week up just over 2%. Germany’s DAX gained 0.9% on Friday, the CAC40 jumped 1.4%, and the FTSE100 rose 0.6%, all ending the week in positive territory.

US Treasuries sold off modestly on Friday after an initial rally following the Supreme Court tariff decision quickly faded. By the end of the New York session, yields were 1–2bp higher across most of the curve, with front-end and long-end underperforming the belly.

The 10-year yield ended around 4.08%, near the upper end of the week’s 4.02–4.10% range. For the week, the curve bear flattened with the 2y rate up 7bps while the 10y gained 4bp. In Europe, German 10-year Bund yields fell around 2bp on the week, while UK gilts outperformed with 10-year yields down by -6bp over the week.

The US dollar weakened on Friday following the Supreme Court ruling, with the DXY down around -0.2% on the session, trimming but not fully erasing its weekly gain. EUR/USD rose to 1.178, GBP/USD to 1.348, while AUD and NZD outperformed, up 0.6% and 0.5% respectively during the New York session. The AUD traded in a 0.7015 to 0.7095 range, closing the NY session at 0.7081 and now starts the new week a tad lower at 0.078. 

Positioning data showed a decisive shift against the dollar. Speculative traders increased net USD shorts to about US$22.2bn, the most bearish stance since 2021. At the same time, investors added aggressively to commodity-FX exposure: specs bought 12.6k CAD and 12.7k AUD contracts, taking both to their largest net long positions in years. Yen positioning flipped modestly long, while euro and sterling saw renewed net selling.

Commodities were mixed on Friday but finished the week stronger, led by energy and metals. Oil prices were volatile as reports suggested Trump was weighing limited military strikes on Iran rather than a full-scale attack.

Brent ultimately rose 0.1% on Friday to US$71.76 and gained nearly 6% over the week, while WTI slipped marginally on the day but rose more than 5% on the week. Geopolitical risk has replaced surplus concerns as the dominant driver of crude, lifting volatility.

Industrial metals strengthened into the close, with copper up 1.7% on Friday and modestly higher on the week, supported by risk sentiment and supply concerns. 

Gold surged 1.7% on Friday, ending the week higher as well, benefiting from dollar weakness and lingering geopolitical uncertainty

Market Call: A Loopy Stock Market, Ed Yardeni,Yardeni Quicktakes extract

The equal-weight S&P500 has been rising to record highs since the beginning of the year, while the market-weight S&P500 has been literally loopy just below 7000 over the same period.

This has been mostly attributable to the stock market’s rotation in the type of outperforming stocks, from high-tech to low-tech industries. 

Previously, the former were supercharged by expectations that companies involved in AI were sure winners, while the latter lagged because investors figured it would take a while before AI benefited them.

However, once the hyperscalers began massively increasing their spending on AI infrastructure, investors feared the investments might not pay off. This mounting uncertainty triggered a rotation from high-tech industries that had gained much market-cap share in the S&P500 to low-tech industries with much smaller market-cap share.

So far this year, investors have favored the S&P500 sectors that are associated mostly with the physical and analog world rather than the virtual and digital world.

That makes a lot of sense because much of the AI capital spending boom will boost demand for oil and gas, electricity, materials, capital equipment, and real estate.

Furthermore, the geopolitical backdrop remains unsettled and unsettling.

A military confrontation between the US and Iran seems increasingly likely, which has sent the price of a barrel of Brent crude oil up by more than US$10 since the start of the year. This explains why the S&P500 Energy sector has been the best-performing S&P500 sector so far this year.

Yet the transportation stocks included in the S&P500 Industrials sector have continued to rise to record highs.

Defense stocks, which are also part of the Industrials sector, have been very strong so far this year. Rising geopolitical risks and uncertainties have been bullish for precious metals, which are included in the Materials sector. Base metal prices are rising amid growing demand driven by booming AI capital spending.

The stock market’s sector rotation has been largely driven by the repricing of sector valuation multiples.

So far this year, the forward P/Es of the following sectors have declined, mostly due to AI-related uncertainties: Consumer Discretionary, Information Technology, Communication Services, and Financials.

Investors rebalanced into the other seven sectors, which saw their forward P/Es rise so far this year. As a result, the equal-weight S&P500 outperformed the market-weight index.

Also outperforming the market-weight S&P500 have been the SmallCap and MidCap stock price indexes.

While investors have been rebalancing their portfolios, resulting in the repricing of S&P500 sectors, industry analysts have remained mostly bullish on the earnings outlooks for the companies they follow.

Many of them weren’t bullish enough about earnings during the four quarters of 2025, which all had significant upside “earnings hooks” in the charted results, as actual results were stronger than projected ones.

The forward earnings per share of the S&P500 rose to yet another record high during the week of February 19.

The 2026 consensus estimate held steady at US$314.62, while the 2027 estimate rose to US$364.54. Both are higher than our current estimates of US$310 and US$350. We are likely to raise our estimates soon once the final tally for 2025 is in.

Meanwhile, the breadth of positive 12-month forward revenues and forward earnings percent changes continues to increase. This is a very good reflection of the current strength of US economic activity.

We asked our friend Michael Brush for an update on the pace of insider buying:

“Insiders continue to make quick lightning strikes into the market and individual names on sharp weakness. But otherwise, they are quite cautious.

Meanwhile, sentiment remains very bullish. It is in the danger zone, in the contrarian sense. The Investors Intelligence Bull/Bear ratio recently came in at 3.87.

Anything above 4.00 is the danger zone, and we are close enough.

This combination of cautious insiders and enthusiastic investors makes the market vulnerable to downside risk. It also suggests the market will not go into runaway upside mode anytime soon.” (Michael covers insider activity in his investment letter, Brush Up on Stock.) 

We agree.

Corporate news in Australia

-Bailey Nelson is interviewing advisers as it prepares for sale

-ColCap is on track to raise $2.7bn for the largest RMBS transaction for a non-bank lender in Australia

-Bunnings ((WES)) will offer one hour delivery for lawn mowers, power washers and pet food, as part of 30k items on Uber Eats at store prices

-Calvary Health Care and Northwest Heathcare are working with Healthscope’s landlords on a new deal

-Asian pharmacy group AS Watson is looking at a possible bid for a group of Priceline stores which would require FIRB approval

-Ramsay Health Care ((RHC)) is selling its European unit, sparking takeover speculation

-Bastion Security, backed by Quadrant, acquires Astralas

-Bapcor ((BAP)) is planning an equity raising after weaker earnings forecast

On the calendar today:

-AUSSIE BROADBAND LIMITED ((ABB)) 1H26 Earnings

-ADAIRS LIMITED ((ADH)) 1H26 Earnings

-AMPOL LIMITED ((ALD)) FY25 Earnings

-ANSELL LIMITED ((ANN)) ex-div 37.54c

-CHORUS LIMITED ((CNU)) 1H26 Earnings

-DATA#3 LIMITED. ((DTL)) 1H26 Earnings

-ELECTRO OPTIC SYSTEMS HOLDINGS LIMITED ((EOS)) 2025 earnings report

-G8 EDUCATION LIMITED ((GEM)) 1H26 earnings report

-GENESIS ENERGY LIMITED ((GNE)) 1H26 Earnings

-IMDEX LIMITED ((IMD)) 1H26 Earnings

-IPD GROUP LIMITED ((IPG)) 1H26 Earnings

-KOGAN.COM LIMITED ((KGN)) 1H26 earnings report

-LINDSAY AUSTRALIA LIMITED ((LAU)) earnings report

-LIBERTY FINANCIAL GROUP LIMITED ((LFG)) earnings report

-LENDLEASE GROUP ((LLC)) 1H26 Earnings

-MCMILLAN SHAKESPEARE LIMITED ((MMS)) 1H26 Earnings

-NIB HOLDINGS LIMITED ((NHF)) 1H26 Earnings

-NUIX LIMITED ((NXL)) 1H26 Earnings

-PRAEMIUM LIMITED ((PPS)) 1H25 earnings report

-PERENTI LIMITED ((PRN)) 1H26 earnings report

-REGIS HEALTHCARE LIMITED ((REG)) earnings report

-REECE LIMITED ((REH)) 1H26 Earnings

-SUNSTONE METALS LIMITED ((STM)) General Meeting

-SYMAL GROUP LIMITED ((SYL)) 1H26 Earnings

-TOURISM HOLDINGS LIMITED ((THL)) 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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