26 October 2026 | Weekly Snapshot
Saward Dawson > Wealth Advisory Insights > Weekly Snapshot > 26 October 2026
Did you know?
Thirty-nine years ago last Monday, on 19 October 1987, the Dow Jones fell 22.6% in a single session. It remains the largest one-day percentage fall in Wall Street’s history, and Australia’s All Ordinaries lost around a quarter of its value the next day on what became known here as Black Tuesday.
Hours before New York opened that day, US warships shelled Iranian oil platforms in the Gulf in retaliation for a missile strike on a US-flagged tanker, adding a geopolitical jolt to a market already rattled by rising bond yields and computer-driven “portfolio insurance” selling.
The lasting legacy of 1987 is structural: it gave us the circuit breakers that now pause trading in a rout. Investors who held on recovered their losses within two years.
Market Movements
The ASX finished the week almost unchanged (-0.4%), but the flat headline hid one of the sharpest rotations of the year. Resources fell 7.2% as the quarterly production season, gold’s fall below US$4,000 an ounce and a global sell-off in battery and critical-minerals stocks hit the miners at once. The Materials sector is now barely higher for the year, having been up more than 20% only seven weeks ago. Financials (+4.0%) were the offset as investors switched out of miners and into banks.
Takeover activity returned. Cleanaway (+21.1%) agreed to a A$3.095 a share cash offer from Swedish private equity firm EQT (not to be confused with our US gas holding, EQT Corporation), and Challenger (+21.0%) received an indicative A$11.80 a share proposal from its 20% shareholder, TAL Daiichi Life, a near-20% premium.
At the other end, NEXTDC fell 38.9% after cutting its earnings outlook by around a third. Residents in Melbourne’s inner west physically blocked the installation of new power poles, delaying grid connection at its West Footscray data centre. Together with the collapse of the A$44 billion Firmus AI data-centre float, it was a reminder that the AI build-out faces physical constraints (power, planning and people) as well as financial ones.
Inflation alarm bells from the RBA. Deputy Governor Andrew Hauser told a conference on Wednesday that the inflation outlook was “materially worse” than the RBA forecast, describing un-anchored inflation expectations as a “central banker’s nightmare”. Markets took the hint: the implied probability of a fifth rate hike this year at the 3 November meeting (Melbourne Cup day) jumped from under 20% to around 50%. That puts enormous weight on Wednesday’s CPI (see The Week Ahead).
Growth is softening at the same time. The October flash composite PMI fell to 47.7 from 51.3, signalling contraction, while input-cost inflation was the fastest since May. Slowing activity with sticky prices is the hardest mix for a central bank to manage. The 10-year bond yield eased to 5.16% late in the week with US Treasuries, down from around 5.31% in mid-October, which was close to a 15-year high.
NAB announced that up to 2,500 roles (about 6% of its workforce) will go in FY27, with a restructuring charge of around A$300 million.
The Australian dollar rose 1.3% to around US70 cents as markets priced a higher chance of another RBA hike.
Wall Street slipped for a second week (S&P 500 -0.5%, Nasdaq -0.7%), with the damage concentrated in AI-related names on Thursday. Meta’s higher spending guidance (see below) and concerns about how the AI build-out is being financed sparked a sharp sell-off in chip and big-tech stocks.
Treasuries rallied hard on the same day. The 10-year yield had its biggest one-day fall in more than two years and finished the week at 5.00%, having peaked above 5.35% on 7 October, the highest since 2002. Futures now price only around a 5% chance of a Fed hike this week, down from 37% at the end of September, although a December move remains live.
In Europe, political and fiscal turmoil pushed the French 10-year government bond yield above 5% for the first time since 2002, as rioting led to curfews in several cities.
Oil hits a six-month high as attacks reach Saudi infrastructure. Brent crude rose for a third straight week to a six-month high of US$116.72 a barrel after Houthi forces claimed attacks on Saudi energy sites, including Aramco’s Yanbu facility and the Shaybah oilfield. Saudi Arabia has not confirmed the attacks. Yanbu matters because it is the terminus of the pipeline Saudi Arabia uses to bypass the Strait of Hormuz. The IEA’s accelerated release of around 100 million barrels of emergency stocks and tentative signs of US-Iran talks capped the move.
The more interesting signal was gold, which fell 4.1% to below US$4,000 an ounce in the same week oil surged. Gold pays no income, so when an oil shock raises the prospect of interest rates staying higher for longer, the opportunity cost of holding it rises. The classic ‘inflation hedge’ traded like a rate-sensitive asset instead, and our gold exposures fell with it (GDX -8.1%, QAU -3.7%).
US earnings consensus. FactSet’s latest data (23 October) shows that with 24% of S&P 500 companies reported, blended September quarter earnings growth is 29.5% year-on-year on revenue growth of 12.7%. 83% of companies have beaten earnings estimates, above the five-year average of 78%.
Portfolio Insights
Meta (META, held) fell 9.4% despite a September quarter revenue beat (US$64.6 billion vs around US$63.4 billion expected). Reported EPS of US$3.83 included a US$9.9 billion charge for its settlement with US state attorneys general over teen mental health; excluding it, EPS was around US$7.40.
Revenue and operating profit rose strongly, both above 20% for the period. The issue was spending. Meta raised its full-year expense guidance and lifted 2026 capex to as much as US$145 billion, while December quarter revenue guidance was only in line.
Meta’s five-year credit default swap spread also hit a record, a sign that bond investors, not just shareholders, are now scrutinising how the AI build-out is being funded.
Brambles reaffirms FY27 guidance at AGM – US repair costs absorbed
Brambles shares (held) were higher after reaffirming FY27 guidance at last week’s AGM: sales revenue growth of 2-4%, underlying profit growth of 2-6% at constant currency, and free cash flow before dividends of $800-950 million. Management said the guidance includes the additional costs and investment needed to resolve US repair capacity constraints.
US repair capacity has increased 3% since April, with 40 additional repair benches installed. The company noted that subcontractor turnover at some sites continues to cause operational inefficiencies.
The US issues cut FY26 earnings by around US$90 million but look to be contained to the current 1H FY27. Brambles is targeting service stabilisation by the end of the first half, with costs expected to weigh on the upcoming 1H results before being recovered in H2
Multiple results update; strength in exchange business (ASX, CME) a highlight
CME Group (CME, held, +4.0%) posted record revenue of US$1.74 billion (+13%) on record September quarter volumes of 29.4 million contracts a day. Volatility in rates and energy is good business for an exchange.
ASX Ltd (ASX, held) rose 5.7% after its AGM update showed cash-market value traded up 7% and futures volumes up 32% on a year ago, with expense guidance reaffirmed. Like CME, it benefits from elevated volatility.
Palo Alto Networks (PANW, held) rose 11.3% (CrowdStrike +13.3%) after Evercore ISI’s channel survey pointed to firming cybersecurity budgets into year-end and named both as leading beneficiaries of AI-driven security spending.
The Week Ahead
- Wednesday 28 October – Australian CPI (September month and quarter): The most important domestic release of the year for rates. Annual CPI was 4.0% in August; Westpac expects 4.1% and CBA 4.2% for September, with September quarter trimmed-mean inflation of 0.9–1.0% against the RBA’s own forecast of 0.8%. A print at or above those forecasts would all but lock in a hike on Melbourne Cup day; a softer number gives the RBA room to wait. Woolworths (WOW, held) also releases September quarter sales.
- Thursday 29 October – Fed decision, US GDP and PCE: The Fed (5am AEDT) is expected to hold at 3.75–4.00% after September’s hike, with about 90% of futures pricing and almost all economists in agreement. The focus is whether any member dissents in favour of another increase. That night, US September quarter GDP (advance) is expected at 3.0% (prior 2.2%) and September core PCE inflation at 3.1% y/y (prior 3.0%). The Bank of Canada is expected to hike to 2.50%, its first increase in a year.
- Earnings – the hyperscaler test: Last week the market punished AI spending without visible returns (Meta, Alibaba, Tencent). This week shows whether cloud revenue is growing fast enough to justify it.
- Microsoft (MSFT, held; Wednesday after the US close, Thursday morning AEDT): consensus revenue US$90.6 billion (+17% on US$77.7 billion a year ago) and EPS US$4.71 (+14% on US$4.13). Watch Azure growth and capex.
- Alphabet (GOOG, held; same time): consensus revenue US$127.9 billion (+25% on US$102.3 billion) and EPS around US$3.00 (+5% on US$2.87). Watch Google Cloud growth and capex.
- Amazon (AMZN, held; Thursday after the US close, Friday morning AEDT): consensus revenue US$202.2 billion (+12% on US$180.2 billion) and EPS around US$1.98, roughly flat on US$1.95 a year ago, which included a one-off investment gain. Watch AWS growth.
Saward Dawson Wealth Advisors Pty Ltd, a Corporate Authorised Representative of Akambo Pty Ltd t/a Accountants Private Advice
The information presented in this publication is general information only, and is not intended to be financial product advice. It has not been prepared taking into account your investment objectives, financial situation or needs, and should not be used as the basis for making an investment decision. Before making any investment decision you need to consider (with your financial adviser) your particular investment needs, objectives and financial circumstances.
Some numerical figures in this publication have been subject to rounding adjustments. Akambo Pty Ltd (including any of its directors, officers or employees) will not accept liability for any loss or damage as a result of any reliance on this information. The market commentary reflect Akambo Pty Ltd’s views and beliefs at the time of preparation, which are subject to change without notice.
