Ask Shawn: Equities rotate around before the Fed’s next meeting

The ASX200 ended its penultimate week of October down -1.2% with the damage unfolding over the last 2-days hence going into the weekend the market actually felt far worse, however, the market remains up over 200-points for the month – it certainly doesn’t feel like it! Yet again the Energy Sector was best on the ground while the Utilities Sector carried the wooden spoon. We can see the local index remaining in the 6600 – 6800 trading range into next month although we still believe the risks are on the upside.

Equities feel like they are treading water ahead of the Fed’s next interest rate decision on the 2^nd of November.

As we see some stocks reveal their sins in quarterly updates one thing remains very clear i.e. misses will not be tolerated and especially for stocks that are priced for any degree of growth.

Investors are comfortable in cash hence companies need to perform to avoid a stampede for the exit door – classic bear market sentiment.

The global/local macro news continues to cross our screens at a rate of knots from the UK losing another PM, to China listening to Xi Jinping’s plans for the next 5-years, Australia’s unemployment rate holding at a 50-year low, and a 2nd major data hack this time at Medibank. However, equities continue to swing on the hawkish rhetoric from Fed members when its quiet stocks rally but all too often someone comes out and talks extremely tough on interest rates through 2023.

US stocks surged on Friday night with the S&P500 closing up +2.4% as traders ploughed back into risk assets after bond yields turned lower and the BOJ intervened in the FX market buying Yen. Traders remain fixated on the world’s biggest bond market ahead of the Fed with any moves leading to major swings in sentiment, last night we saw the US 10-years slip back to 4.22%, still up for the week but it was enough to propel stocks higher i.e. just an end to the steep ascent by yields could deliver MM’s targeted Christmas rally. SPI Futures are calling the local market up almost 100-points on Monday morning, back towards its October high.

We continue to believe both US & Australian equities will be higher come Christmas but volatility is unlikely to disappear in the near future.

scroll

OPINION
ACTION

Latest Reports

Morning report 10/10/2025 09:16

ETF Friday: Looking at 3 ETFs for sector reversion into 2026

The ASX 200 rose +0.3% on Thursday, though the real action played out beneath the market's surface, with the materials sector leading the charge, up +1.8% despite a rare pullback in gold stocks.

Afternoon report 09/10/2025 17:20

The Match Out: Copper & Rare Earth stocks push ASX within striking distance of all-time high

The ASX snapped a three-day losing streak today as heavyweight miners powered the market higher, pushing the index back within reach of record levels. A 14-month high in copper prices sparked strong gains across the materials sector, offsetting weakness in banks and tech.

Morning report 09/10/2025 09:22

What Matters Today: Will the RBNZ reinvigorate the “yield” trade?

The ASX200 slipped 0.1% on a quiet Wednesday, which saw some initial morning weakness before buyers returned, taking the index back towards unchanged. Outside of Wesfarmers (WES) -7.5 points and James Hardie (JHX) +5.7 points, none of the main board added or retracted more than 2 points from the index.

Afternoon report 08/10/2025 17:25

The Match Out: ASX eases as retailers and tech stocks drag; gold pauses after record high

The ASX eased modestly during the session as losses across retail and technology stocks outweighed strength in healthcare. Investors also took profits from gold miners after the precious metal briefly broke through the US$4000/oz barrier for the first time.

Morning report 08/10/2025 17:16

Portfolio Positioning: The US Government remains shut, but markets are calm

The ASX200 peeled away 0.3% on Tuesday, the first “real” day of trading this week, although losses weren’t overly broad-based, with 40% of the main board closing higher. While the retailers led the decline, it was noticeable to see some profit-taking wash through many pockets of the market as the US government lockdown drags on, even some gold names closed lower, despite the precious metal posting fresh highs.

Afternoon report 07/10/2025 16:37

The Match Out: ASX trickles lower in quiet session

A softer session for local equities, with volumes still light on the ground despite positive offshore leads, with gold’s relentless rise still clearly in focus with several brokers upgrading their forecasts. We think some consolidation is overdue for local stocks - a healthy reset as we move through October remains our expectation for now.

Morning report 07/10/2025 09:58

Macro Monday on Tuesday: Volatility is slowly rising as we head into October

As we head into October, volatility has started to brew beneath the surface. In the US, volatility on the stock level is testing multi-year highs, and locally, it wasn’t that long ago that we saw the most volatile reporting season in recent memory. And in the last 24-hours, with the infamous October less than one week old, we’ve started to see big moves across stock and commodity markets.

Weekend report 04/10/2025 08:45

Weekend Q&A: The ASX is on track for new all-time highs this week

The ASX200 ended last week up +2.3%, with the first three days of October already recouping all of September's decline. The healthcare sector made a welcome return to the winners' enclosure, ably supported by the influential miners and banks, while the energy sector was the only meaningful drag on the index. Only a flat week by the heavyweight iron ore miners reined in performance, although their sector peers worked hard to address their slumber, with 18 members of the materials sector closing out the week up more than +5%.

Afternoon report 03/10/2025 17:49

The Match Out: ASX finishes the week strong, APE jumps on CanadaOne acquisition

The ASX finished the week strongly, rising steadily through the session with strength in healthcare, tech and consumer names more than offsetting softer trade in energy and utilities.

Morning report 03/10/2025 09:28

ETF Friday: Looking at 3 of the Top 10 purchased ETFs

The ASX 200 surged +1.1% on the second day of October, enjoying its best session in six weeks, as the market appeared to enjoy fresh funds flowing into the major stocks and sectors. Gains took the index back within striking distance of its all-time high as the influential financials and miners lifted the broad market, with 8 of 11 major local sectors closing higher, with energy stocks, real estate plays and health care also notching gains of more than 1% each.