ASX 200 Live Today – Thursday, 10th September

Welcome to our live ASX coverage for Thursday, September 10. Expect a high volume of posts pre-market and more periodic updates throughout the day. We’ll be wrapping the blog up around 2:00 pm AEST. Let us know how we can make it even better.

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New updates

It’s looking grim out there

[2:15 pm] The ASX 200 is down 130 points (-1.45%), a three-day skid that leaves the index up just 0.77% for the year. Telcos (+0.14%) is the only sector in the green, with utilities (-0.34%) and energy (-0.58%) outperforming on a relative basis. Copper closed at a record US$6.86/lb overnight and iron ore is holding around US$99 a tonne, but neither stopped the selling, and materials sector headlines the decline at -2.4%. Industrials, healthcare, real estate, financials, staples and tech all fell more than 1%.

The catalyst is pretty much the same as the past few days. Brent hit US$102 a barrel overnight before easing 0.6% today to US$101.05, and the US Treasury lifted its buyback to $6 billion to calm the long end, but yields pushed higher anyway, with the 30-year up 4bps to 5.29%. Equities have been rather buoyant, but now de-rating as the high inflation, hawkish central bank, persistent supply shock scenario takes hold. It’s looking grim out there.

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Australia softens LNG reservation plan to a 20% cap

[2:00 pm] The federal government has replaced a fixed domestic gas reservation requirement with an annual cap set by the regulator, easing the burden on east coast LNG exporters.

• Twenty per cent becomes a ceiling rather than a fixed set-aside, with the energy regulator setting the annual amount off a rolling five-year demand forecast plus a 10% supply buffer, versus the original proposal of 20% of annual output with no flexibility

• Existing contracts unaffected, with the rules applying only to prospective contracts and the spot market after trading partners sought assurances during consultation since May

• Queensland producers most exposedgiven Western Australian projects already sit under a 15% reservation policy, with Australia Pacific LNG, Gladstone LNG and QCLNG the three projects primarily affected

• Shareholders in the firing lineinclude ConocoPhillips, Shell, Origin Energy and Santos

• Up to 200 additional petajoules a yearcould flow to the domestic market on Energy Minister Chris Bowen’s estimate, which he said would more than cover new manufacturing demand and reduce price spike risk

• Licence applications open 1 Januarywith the supply obligation not starting until 1 January 2028, giving producers a two-year runway

Source: Bloomberg

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What’s holding up?

[1:34 pm] The S&P/ASX 200 is down around 2.6% in the past week, here’s what’s holding up.

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Morgan Stanley flags overlooked residential risks at Stockland and Mirvac

[1:30 pm] Morgan Stanley says the market’s focus on FY27 FFO guidance beats has masked slowing residential sales and thinner secured development profits, with both stocks rated Equal-weight.

• SGP pre-sales coverage of 45-51% on the residential side against a 54-96% range since FY20, leaving just 40-46% of FY27 development income secured including a conditional $55-80m data centre land sale

• SGP guided to 7.3k-8.3k resi settlements for FY27 with 3,722 properties pre-sold and due to settle, the lowest coverage this decade, though it delivered 8.9k lots in FY26 from about 4k pre-sold at the start of the year

• MGR has secured 60%-plus of development EBIT guidance for FY27, strong versus the typical 40-50% coverage of the past three to four years, with 1,749 contracts on hand against guidance of 2.8k-3.1k lot settlements

• 291 of MGR’s 775 FY27 completions unsold, mostly in Melbourne, with recent sales rates suggesting more than two years to clear the stock

• Valuations not stretched at 11x FY27e P/E for SGP and 13.6x for MGR, leaving runway for outperformance if residential sentiment improves and limiting material downside

• Defensive names preferred if rates rise, with SCG, GPT and VCX flagged as offering more stable earnings and less volatility than the residential-exposed pair

Company pages: Stockland (SGP), Mirvac (MGR)

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Traders brush aside Bessent’s ‘bet against me’ tough talk

[12:46 pm] Bessent’s repeated warnings to bond and oil traders have failed to stop yields and crude moving against him, with Wall Street questioning how much firepower the Treasury actually has.

• Ten-year yields at a three-year high of 4.85% on Wednesday, rising despite the first upsized buyback, while Brent has pushed above US$100 a barrel since Bessent began jawboning both markets

• Thirty-year yield at 5.29% late Wednesday, just under the 5.3% level analysts describe as the line in the sand Bessent would likely defend

• Deficit and Iran war sit outside his control, with Potomac River Capital’s Mark Spindel saying the market has called his bluff and the near US$2trn deficit plus Fed inflation credibility concerns outweighing the manoeuvres

• Credibility questioned by AEI’s Michael Strain, who counts three failed attempts to move the long end, though promised fiscal plans and the several hundred billion dollars of claimed fraud savings have yet to materialise

• Yen intervention has worked so far, with the joint effort lifting the currency and likely stopping Japanese authorities selling Treasuries to fund a solo defence

• Some still respect the put, with Bank of America’s Ralph Axel and Katie Craig calling the expanded buybacks likely the start of a deeper policy to cap long-end yields and Citigroup saying the Treasury Secretary’s put should be taken seriously

Source: Bloomberg

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China-US 10-year yield gap widens to a record

[12:45 pm] The spread between Chinese and US 10-year government bonds has reached its widest on record after the surge in Treasury yields, lifting the risk of capital outflows and a softer yuan.

• Gap at 317 basis points, the widest in Bloomberg data going back to 2002

• US 10-year yield at 4.85% on Wednesday, the highest since 2023, while the Chinese 10-year held at 1.68%

• Policy divergence is the driver between a growth-focused People’s Bank of China and an inflation-fighting Federal Reserve, threatening the currency stability that resilient exports have delivered

• Yuan still near multi-year highs against the dollar on robust exports, though the widening spread reduces the appeal of onshore assets for both global and domestic investors

• Yield disadvantage extends beyond the US, with Japanese and UK yields near multi-decade highs and a Bloomberg gauge of global sovereign bonds yielding 3.8% this week, the highest since 2007

Source: Bloomberg

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Top ASX 200 gainers

[11:18 am] West African Resources tops the leaderboard after its FY26 result, while a few energy and defensive names catch a bid.

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Top ASX 200 losers

[11:18 am] Nine Entertainment tumbles on its Premier League rights agreement, while a few gold, copper, rare earth and agriculture names lag.

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Soaring yields and US$100 oil tanks the market

[10:08 am] The ASX 200 is down 118 pts (-1.33%) in early trade, with every sector in the red. BHP is off 2.9% despite copper closing at a fresh all-time high overnight, suggesting the move higher in equity risk premium is outweighing the gain in the underlying commodity price. Yield-sensitive and consumer-facing sectors including Tech, Financials, Real Estate and Staples are also sharply lower. Against this backdrop of ~US$100 oil and vertical bond yield charts … it’s rough out there.

S&P/ASX 200 sectors (Source: Market Index)

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Thinking out loud about St Barbara

[10:00 am] I’ve been following St Barbara for a while, and first covered it back in January. You can read my original write up here, but in a nutshell:

• Back then, SBM was effectively ~70% cash backed ($527m cash vs. market cap of $740m) and carrying at least A$2bn in “value” based on its 40% Simberi stake and 100% owned Atlantic development portfolio

• The Simberi Feasibility Study (Dec 2025) reported a post-tax NPV of US$1.81 billion (A$2.6 billion), which translates to approximately A$1.0 billion for St Barbara’s 40% stake. This NPV is based on US$4,000/oz gold and US$50/oz silver assumptions

• Atlantic’s 15-Mile processing hub concept study had an estimated post-tax NPV of A$1.08 billion using a gold price of US$2,500. The PFS is currently underway and expected in the March quarter 2026

Oh look, the stock just opened and its up 19% to 88 cents.

Fast forward to the below deal, and now the company is:

• $1.07bn market cap (as at 10:01 am on Thursday)

• Cash position of approximately $880m

• Declared a 5 cents per share dividend on 28 August

• Considering a 13 cents per share special dividend

• New Simberi royalty NPV of $212m (at a discount rate of 5% and gold price assumption of US$4,000/oz)

• Board intends to do a strategic review of its royalty interests and consider opportunities for dividends or capital distributions

What you’re effectively left with is a cash box that’s paying a ~5-6% dividend, with a possible ~15% dividend to come, plus the royalty and the Canadian development assets.

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St Barbara sells remaining New Simberi interest to Lingbao for $453m

[9:51 am] St Barbara has agreed to divest its residual stake in the New Simberi Gold Project and the Tabar Islands exploration licences, retaining royalty exposure and flagging further shareholder returns.

• Cash proceeds of $453m comprising $410m consideration plus about $43m repaying St Barbara’s share of construction capital between April 2026 and signing, with Lingbao funding cash calls through to completion

• Royalties retained of 2.75% NSR on 100% of gold and silver from New Simberi and 1.5% NSR on 100% of minerals from the Tabar Islands licences, both commencing 1 July 2027 with a Lingbao parent company guarantee

• New Simberi royalty NPV of $212m at a 5% discount rate and a US$4,000/oz gold price, against a forecast 2.2Moz of production (2.0Moz payable) over an initial 13-year mine life

• Pro-forma cash of approximately $880m on completion, with no debt or hedging, leaving the 15-Mile Processing Hub, the Touquoy Restart Project, the exploration portfolio and the royalty book

• Special dividend of about 13 cents fully franked under consideration subject to completion, on top of the 5 cents declared on 28 August, plus a possible on-market buy-back of up to 100m shares to be decided after the updated 15-Mile PFS due end-September

• Completion targeted for the March quarter 2027 subject to Chinese and PNG regulatory approvals and shareholder approvals on both sides, with Lingbao able to terminate on a material adverse event

Company page: St Barbara (SBM)

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Focus Minerals declares maiden fully franked dividend of 8 cents

[9:44 am] Focus has declared its first dividend, a fully franked final for the year ended 31 December 2025, following the sale of the Laverton Gold Project.

• Dividend of 8 cents per share fully franked for a total cash distribution of about $22.9m, representing a 3.7% yield on Wednesday’s close of $2.18

• Laverton Gold Project sold for $250m cash during FY25, with approximately $173m of principal and interest on historical related-party borrowings repaid to the major shareholder

• Cash and equivalents of about $130m at 31 December 2025, with the distribution equal to roughly 18% of that balance

• Bonneville Underground Mine commenced production during the year, lifting ore output and driving a material improvement in operating and financial results

• Liquidity retained after payment on the company’s review of forecast operating cash flows, working capital, planned capex and development commitments, leaving capacity for growth and acquisition opportunities

Company page: Focus Minerals (FML)

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NEXTDC prices $1.1bn convertible notes offering

[9:43 am] NEXTDC has priced a subordinated convertible note issue due 2031 to fund its development pipeline, alongside a capped call hedge and a delta placement of borrowed stock.

• Notes of $1,100m at 1.75% per annum payable semi-annually, maturing 17 September 2031, with settlement expected on 17 September 2026 and net proceeds of about $1,006m after the cost of the capped call and before transaction costs

• Initial conversion price of $16.6950 a share, a 32.5% premium to the $12.60 reference share price, with NEXTDC able to settle conversion in cash rather than shares

• Capped call struck at the conversion price with a cap of $21.4200, a 70% premium to the reference price, hedging share price gains between those two levels but leaving NEXTDC unhedged above the cap

• Pro forma liquidity of about $9,776m at 30 June 2026 before offering and capped call costs, up from the reported $8,676m comprising $876m cash, $7,100m undrawn senior facilities and $700m of undrawn hybrid commitments

Company page: NEXTDC (NXT)

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Bannerman completes $124m placement to fully fund Etango

[9:42 am] Bannerman has closed the bookbuild for a fully underwritten institutional placement priced at $4.00 a share, with proceeds earmarked for the Etango uranium project.

• Placement of $124m before costs, issuing about 31m new shares at $4.00 each, representing around 14.9% of issued capital and using existing Listing Rule 7.1 capacity

• Offer price a 5.4% discount to the last close of $4.23 on 8 September, with new shares ranking equally with existing fully paid ordinary shares

• SPP of up to $10m open to eligible Australian and New Zealand shareholders at the same $4.00 price, capped at $30,000 per holder and not underwritten

• Etango fully funded through construction and ramp-up on the combination of placement proceeds, existing cash, the near-term CNOL subscription and reimbursement payments, and CNOL’s pro-rata working capital contributions

• CNNC Overseas conditions satisfied or waived for the strategic investment and joint venture covering the funding, development and operation of Etango

Company page: Bannerman Energy (BMN)

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GrainCorp reaffirms FY26 guidance and delays systems transformation

[9:31 am] GrainCorp has held FY26 earnings guidance while pushing back the first release of its SAP replacement and lifting the associated FY27 spend.

• FY26 underlying EBITDA expected around the midpoint of the $200-240m range, with underlying NPAT within the $20m to $50m range, including $5m of one-off restructuring costs

• Release 1 deployment pushed to 2Q CY27 from 2H26 after late-stage testing, a decision framed as reducing implementation risk, with Release 2 covering Agribusiness now deferred

• FY27 Release 1 spend of $30-35m, an increase of $30m, while 2H26 spend is unchanged at approximately $25m

• Transformation run-rate benefits of $12m by the end of FY26, above the top end of the prior commitment, building toward the targeted $20-30m through-the-cycle EBITDA uplift by the end of FY28

• Agribusiness operating model changes fully implemented, affecting around 80 roles across the ECA network and corporate support functions

• ABARES forecasts an east coast winter crop of 26.6mmt, up 12% from its June forecast, with positive development in New South Wales and Victoria offset by drier conditions in Queensland

Graincorp has surged some 45% since early July as strong winter rains improved growing conditions, resulting in the ABARES wheat crop forecast upgrade on 1 September. This follows a ~45% decline between October 2025 and May 2026, driven by initial grain market concerns, an earnings downgrade in December and another severe downgrade in February.

Company page: GrainCorp (GNC)

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Explorer wrap: high-grade hits at Pursuit, LinQ, Manuka and Odyssey

[9:30 am] A run of exploration and development updates across lithium brine, copper, gold, tungsten and rare earths.

• Pursuit Minerals returned 809mg/L Li from 399.2m to 404.0m at DDH-3 on the Mito tenement at Rio Grande Sur, its highest grade at the project and about 2.7 times the 298.4mg/L Li shallower interval, with DDH-3 completed to 560m and the rig now at DDH-4

• Tungsten Mining has all primary approvals in place at the 100%-owned Watershed project in Far North Queensland and has started pre-FID construction, with a DFS due in October 2026 and first production targeted for H1 2027 against the June PEE’s pre-tax NPV8 of $1.31bn and 198% IRR

• LinQ Minerals hit 113m at 0.71% Cu Eq from 33m in MZACD010 at Monza, including 4m at 5.3% Cu Eq, plus 193m at 0.45% Cu Eq from 49m in MZACD008, with mineralisation open in all directions and a 1km untested anomaly toward the Estoril resource

• Manuka Resources returned 32m at 7.98g/t Au from 34m and 8m at 12.96g/t Au from 37m from a completed 56-hole, 3,133m RC programme at Pipeline Ridge, with a first-pass resource estimate to follow and more drilling in October

• Odyssey Gold returned 5m at 16.1g/t Au from 30m including 2m at 36.7g/t Au in CBRC0451 west of Cable, confirming lodes outside the current resource and prompting a review of Stage 1 Feasibility Study timing

• Australian Rare Earths achieved continuous rare earth recovery into pregnant leach solution at Koppamurra and processed a first batch through the mixed rare earth hydroxide circuit, with oxide samples to go to prospective offtake partners and the campaign running to December 2026

Company pages: Pursuit Minerals (PUR), Tungsten Mining (TGN), LinQ Minerals (LNQ), Manuka Resources (MKR), Odyssey Gold (ODY), Australian Rare Earths (AR3)

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Nine extends Premier League rights through to 2034

[9:22 am] Nine has secured Australian streaming and broadcast rights to the Premier League for a further six seasons from 2028-29, giving Stan Sport content certainty beyond the current deal.

• Rights cover all Australian streaming and broadcast subscription and free, across 38 match weeks and 10 matches per week, running to the 2033-34 season

• FY29 rights fee broadly in line with FY28 before scaling through the six years, equating to a roughly 3% CAGR from the end of the current deal to the end of the new one

• Loss of Optus contributions lifts the cost to Stan, which Nine expects to offset by removing the subscription discount for legacy Optus subscribers plus other cost and revenue initiatives

• Stan EBITDA has more than doubled from $40m in FY21 to $81m in FY26, with the Premier League cited as key to 50% growth in average Sport subscribers over the past 12 months

• Pricing power demonstrated through the $5 per month increase in Sport subscription rates in August 2025, supported by the Optus Sport deal

• Content to be promoted across broadcast, media and outdoor assets while sitting primarily on Stan, alongside the NRL and NRLW, all four tennis Grand Slams, the Olympics, rugby union, the NBL and WNBL and netball

Company page: Nine Entertainment (NEC)

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West African Resources delivers $437m NPAT and 20 cps special dividend

[9:20 am] WAF’s first full half of combined Sanbrado and Kiaka production produced record group figures, a 20 cents per share special dividend and a plan to accelerate debt repayments.

Comparisons below are to Macquarie ests only, not consensus, Macquarie models a December full year, so the half-year actuals are shown as a share of the full-year CY26e ests rather than as a beat or miss. Macquarie has WAF at Outperform with a $4.00 target.

• Revenue of $1.46bn, running at 51% of the $2.89bn full-year est

• Gold production of 232,905oz, at 51% of the 457koz full-year est, with 214,883oz sold

• Profit before tax of $684m and profit after tax of $437m, the latter at 44% of the $1,002m full-year reported NPAT est

• Operating cash flow of $690m, at 54% of the $1,287m full-year net operating cash flow est

• Special dividend of 20cps unfranked totalling $228.8m, double the 10 cents full-year DPS carried in ests, with a record date of 18 September and payment on 7 October

• Cash and bullion of $876m plus 42,453oz of unsold gold and net assets of $1.99bn, with management flagging accelerated repayments to secured lenders

Company page: West African Resources (WAF)

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Energy charts of interest: Diesel futures, Brent and key stocks

[9:13 am] US diesel futures rallied 5.1% overnight to a fresh all-time high, now up 89.9% since 26 February. That’ll likely drive some more positive flows for local refiners like Ampol and Viva Energy. Brent settled 2.3% higher overnight to US$101.74 a barrel, with the S&P 500 Energy Index up 1.0% to a record high, and up 44.7% year-to-date. The ASX 200 Energy Index is up 30.4% year-to-date, but still ~2% away from the 7 April high.

Source: TradingView

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Bond yields are sizzling

[8:58 am] If you’re looking for a bullish chart, look no further than bond yields (of any duration). You’ve got the Australian 3-year breaking out of its six-month trading range to the highest since June 2011. While the US 2-year continues to steadily trend higher, closing at 4.43% overnight, the highest since July 2024. (Also, Australia focuses on the 3-year as its the RBA’s chosen benchmark for its explicit yield target, while the US 2-year is the cleanest proxy for the expected path of the fed funds rate over the near-term).

The US 30-year reminded Bessent who the ‘house’ is, up 4 bps to 5.29%, still slightly below the 17 August high of 5.31% but still pressing uncomfortable levels. While the Aussie 30-year jumped 5 bps to 5.73% overnight, a record high since the bond’s inception in 2016.

Key Australian bond yields (Source: TradingView)

Key US bond yields (Source: TradingView)

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Traders price four hikes from the ECB and BOE as oil surges

[8:49 am] Swaps markets have ramped up European tightening bets as the Iran war lifts energy costs, though several analysts think the pricing has gone too far. The ECB’s interest rate decision is tonight at 10:15 pm, where consensus expects a 25 bp hike to 2.65%.

• ECB pricing at about 90 basis points of increases by December 2027, the most in the current tightening cycle, implying three quarter-point hikes and a 60% chance of a fourth

• BOE seen raising by roughly the same amount, which would take Bank rate to its highest since February 2025

• Two-year German yields hit 3.08%, the highest since June 2024, as short-dated bond yields across the region jumped on Wednesday

• Energy import exposure is the driver, with Allspring’s Lauren van Biljon noting oil back above US$100 and the UK and Europe still very much tied to energy prices, alongside a more resilient euro-zone economy

• Policymakers less committed than markets, with ECB Governing Council member Joachim Nagel signalling a hike at Thursday’s meeting but staying wary on what follows, and BOE Governor Andrew Bailey downplaying the chance of an imminent move

• Bank of America recommends fading front-end ECB pricing citing limited evidence of broader inflationary pressure, while CG Asset Management’s Emma Moriarty calls four UK hikes unlikely given the weak economy

Source: Bloomberg

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Bessent’s upsized buyback fails to stem Treasury yield rise

[8:44 am] The US Treasury tripled the size of its first enlarged long-dated buyback operation but bond yields kept climbing, with Bessent also daring currency traders to test him.

• Buyback capped at US$6bn of longer-dated debt, triple the US$2bn originally scheduled, landing at the top of the US$5bn to US$6bn range Wrightson ICAP had flagged as the likely starting point

• Ten-year yields rose 5 bps to 4.84, the highest since Nov-23, with the Treasury then selling US$39bn of 10-year notes at 4.834%, the highest yield at a 10-year auction since 2007

• Forward calendar unchanged with the six remaining long-dated operations this fiscal quarter still guided at US$4bn or more, offering no signal of further escalation

• Bessent said “I am the house now” on Tuesday in reference to Treasury’s parallel yen support, which is aimed at deterring the Bank of Japan from selling from its US$1.1trn Treasury holdings, the largest foreign position

• Analyst reaction sceptical with Deutsche Bank’s Steven Zeng saying Treasury has created a monster it must keep feeding, Evercore ISI reading the announcement as Bessent accepting a limited role for buybacks, and BMO’s Ian Lyngen warning the activist approach risks the credibility of Treasuries as an asset class

• No obvious ceiling according to Neuberger Berman’s Joseph Purtell, who sees scope for tens of billions, though others estimate a practical limit near US$10bn, against US debt above US$40trn and a deficit headed past US$2trn

Source: Bloomberg

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Brent tops US$101 as US-Iran tanker strikes escalate

[8:41 am] Brent settled above US$101 a barrel for the first time since July after the US destroyed five Iranian tankers and Iran pledged to intensify attacks, with the EIA now flagging a tighter distillate market.

• Brent up 2.3% to US$101.74 a barrel, now up 18% since 25-Aug

• Eight Iranian tankers destroyed since Sunday including four in the Gulf of Oman and one near Kharg Island, though only one of the latest five was a very large crude carrier, limiting the near-term hit to Iranian export capacity

• Oil at sea down more than 150m barrels since mid-July on Vortexa data, with Chinese buying resuming this month after a hiatus that had capped prices, and TD Securities noting the market remains tight overall despite stabilising dark flows

• EIA lifted its Q4 retail diesel forecast 14% to US$5.55 a gallon and expects US distillate inventories below 100m barrels in September, staying under the five-year low through much of 2027 as global distillate output runs below last year

• EIA forecasts Brent averaging US$90/b in 2H26 before easing to US$74/b in 2027, assuming Middle East export constraints persist to year-end and regional crude output stays below pre-conflict averages until 2Q27

• Trump said relief will not come before the 3 November midterms, forecasting petrol below US$2 a gallon only afterwards with the national average currently above US$4.22, while European gas trades at its highest since 2023 heading into winter

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Apple unveils foldable iPhone Duo at US$1,999

[8:40 am] Apple’s first foldable handset headlined the September hardware event, with new CEO John Ternus making his debut and Pro pricing rising US$100.

• Duo priced from US$1,999 for 256GB and up to US$3,199 for 2TB, well below IDC’s expectation of US$2,500 or more and in line with JPMorgan’s US$1,999 call, with preorders from 16 October in more than 70 countries and availability 23 October

• iPhone 18 Pro up US$100 to US$1,199 and the Pro Max to US$1,299 amid the global memory shortage, following price rises on Macs, iPads, last year’s iPhone Air and the 17e

• A20 Pro is the first high-volume smartphone chip on TSMC’s 2nm node, with a 20% faster CPU, 40% faster GPU and 50% more memory bandwidth, and Apple has committed to producing some iPhone chips at TSMC’s Arizona fabs

• C2 modem debuts in the Duo, Apple’s second in-house design, running 50% faster at 15% lower energy, with analyst Ben Bajarin expecting Qualcomm content to be eliminated entirely from the iPhone 19 line

• No entry-level iPhone 18 launched, with that model shifting to a spring release alongside the 18e and iPhone Air 2, changing the seasonal revenue cadence

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RBC sees growing risk of 10% pullback in US stocks

[8:32 am] RBC Capital Markets says the odds of a garden-variety correction have risen heading into a seasonally weak stretch and the US midterms.

• Pullback risk of 5% to 10% has grown, with strategist Lori Calvasina noting concerns over inflation and interest rates are overshadowing recent improvement in consumer confidence

• September seasonality is unhelpful, with the S&P 500 having fallen in the month in five of the past 10 years

• Midterm cycle and Iran war are flagged as additional volatility sources, with political backlash against AI emerging as a campaign issue

• Downside likely contained given post-GFC pullbacks have generally held within the 5% to 10% band absent serious recession or rate-shock concerns

• Target held at 8,150 for the S&P 500 over the next 12 months, implying about 6% upside from Tuesday’s close

Source: Bloomberg

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S&P 500 earnings growth lifts to 32% on AI build-out

[8:32 am] Full-year profit estimates for the S&P 500 have been revised sharply higher after a stronger-than-expected second-quarter reporting season.

• Earnings growth of 32% is now projected for the S&P 500 this year, up from the 24% gain expected before second-quarter reporting began

• Beat rate of 86% across the near-complete reporting season is the highest since 2021, with the largest beats among AI-linked names including Amazon and Alphabet

• Communication services saw the largest upward revision, with earnings now seen up 51% this year versus 26% at the start of the second quarter, helped by Alphabet ad revenue and AI monetisation

• Consumer discretionary estimates now imply 32% growth versus about 12% previously, with Target, Walmart, TJX, Ross Stores and Estée Lauder all beating on EPS and raising guidance

• Energy upgrades followed record Chevron earnings and a roughly US$3.7bn boost to Exxon from higher crude tied to the Iran war, while Baker Hughes lifted full-year guidance as industrial and energy technology orders doubled to a record US$7.1bn

• Cost headwinds building with Apple’s sales outlook disappointing on rising memory prices and supply constraints, and Nvidia warning of narrowing margins on memory costs

Source: Bloomberg

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Good morning!

[8:24 am] ASX 200 futures are down 88 pts (-0.99%). Here’s what happened overnight:

• Wall Street fell for a third straight session as Brent crude broke through US$100 a barrel and the US 10-year Treasury yield pushed to its highest level since Oct-23, leaving energy and rates in charge of equities

  • S&P 500 (-0.48%), Equal-weight S&P 500 (-0.96%)

  • Nasdaq (-0.64%), Dow (-0.77%), Russell 2000 (-1.32%)

  • US 2-year yield up 3 bps to 4.43%, US 10-year up 5 bps to 4.84%, US 30-year up 4 bps to 5.29%

• The US escalated on two fronts, banning a broad swathe of Canadian imports from later this month while Trump conceded the Iran war and higher petrol prices will likely run past November’s midterms

• Apple delivered the session’s big corporate set piece, unveiling a US$1,999 foldable iPhone Duo in John Ternus’s first outing as chief executive, with tonight’s ECB expected hike and US producer prices the next catalyst