Latest / ausbiz a.m / 30.09.26 Henry Jennings, Marcus Today
Transcript
- nadine: Good morning to you. It is the 30th of September 2026. I'm Nadine Blaney, sitting in for Andrew Gagan, my colleague. And look, let me run you through just the basics before we get to my expert guest, who I'm looking forward to having a chat with. Alright, so the Dow ended down by about a quarter of 1%. The SP 500 shed about two-tenths of a percent. The Nasdaq lost, well, let's call it flat for the Nasdaq. Could have been a lot worse though. ⁓ we did see earlier in the session the Dow as much as seven-tenths of a percent lower. ⁓ the SP 500 was almost a percent lower as well. Because of bond yields, they are really the story driving this market. The 30-year treasury hit above 5.6%, a level not seen by 2022, the 10-year nudging up around 5.28%. So obviously that's put pressure on equities. Geopolitics. Really adding to the unease, US President Donald Trump rejecting an Iranian offer to reopen the Strait of Hormuz, though later reports suggested that he may reconsider. So markets came off their lowest levels on that, but also we heard a bit of Fed speak, Fed Williams saying that the US Fed doesn't necessarily have to be in a rush, I'm paraphrasing, ⁓ when it comes to rates. so look, industrials were a bright spot, financials were lowered. Keep in mind we do have earnings season in the US knocking on the door. The banks are always the first out of the gates. ⁓ we saw arm holdings dropping, pulling back though after a massive run. Stock up nearly 30% for the month. look, Carnival, I don't think a lot of Aussies care about Carnival, but it was up about 12% after a very strong quarterly beat. Of course, a lot of the chatter is about anthropic, ⁓ open AI. You know, the IPO rush there. Although Aura, if you've got one of those rings, they're actually pulling back their IPO. Had a bit of data as well. Consumer confidence. The jolts read comes after the SP ASX yesterday. Held up pretty well. It closed up by n 29 points, or about three-tenths of a percent. We'll talk about some of the big movers and what to expect today, of course. So let's get to it, shall we? Let's put all of that in perspective. With Henry Jennings, who is joining us from Marcus today. Good morning, Henry. It's been a long time between drinks. How are you? henry: I'm fine thanks and Dean it has been a long time between drinks but it's good to be back and it's good to be on the show so thanks for having me. nadine: No problem. ⁓ look, Aussie shares are expected to open lower, I guess in line with that weakness I was just talking about in New York. What will you be watching for at the open? henry: Well, the spy showing we're going to open a little bit lower as you say down 14 points. We had a bit of a bit of a pop yesterday afternoon as Michelle Bullock started her press conference and we closed up 30. So not a bad effort, but we do seem to be in a kind of a holding pattern at the moment. And I think what is surprising given that bond market in the US 30 years is the highest yield since 2002, which is quite extraordinary. We also saw a collapse in US consumer confidence as well. So there's clearly something going on that the equity markets tend to be ignoring. I think at the moment, the equity markets are focusing very much on earnings in the US, and those have been very robust and have really kind of seen the bond market as a bit of a sideshow. you know, having been away for a little while, given where bond yields are and bond yields are here as well, you know, it's surprising that the US has held up as well as it has to some extent. It almost feels a little Teflon our market of course has fallen back and I'm not really sure what's going to be driving it We did have a bit of a bounce in in gold, which is obviously going to help a little bit But we saw that yesterday in our time zone So it's going to be another interesting session, but I'm not expecting too much I have to say unless there's some sort of big surprise out there But the reaction to the RBA was relatively muted and I guess it'll take a little while to see how that feeds through into the real economy nadine: Yeah, well we do have that inflation read coming today in the case of unfortunate timing, getting it the day after the RBA's interest rate decision. henry: why did they do that why did they do that why do they not just you know check they've changed the date of the meetings you know it used to be the written in stone first tuesday of the month why don't they wait for the latest data or maybe they've got the latest data in our head nadine: Mm-hmm. No, I was told on on Good Authority earlier in the week that they do not see those numbers before they come out. It's it's very it's an interesting one. henry: Yeah. It's Now, why would you not want the whole picture before you make such a big decision which affects so many people in terms of their borrowing costs? nadine: Yeah. No, I don't think it's the it's not the Reserve Bank. I think it's just they've made the schedule under the new rules and the ABS is on their schedule and ⁓ yeah, you'd think somebody could just ⁓ make a decision. Anyhow, we digress. I think helping the US session was the fact that we saw oil falling. I mean, still at a hundred and four US a barrel, but you know, Brent Futures did ease in the afternoon. So, you know, that helped to sort of improve henry: Yeah. No, no, it's... you think, wouldn't you? You think. you nadine: I guess I don't know, do you call it confidence? I I think just so much of so much of what is happening now is down to and you know, drumroll please, no big surprise. But the AI trade, I mean, we've got you know, open AI looking like it's ⁓ going to be tapping the market for more cash. We've got, you know open AI unveiling this sort of I think they're called always on AI ja agents, like these ad AI assistants, you know, Meta's Muse did good things for it last week. So we've got open AI, we've got, you know, anthropic. It's all happening in that AI space. I mean, that's what's driving sentiment. henry: Nadine, wrong. It's not AI anymore. Donald Trump has now decreed that it should be called SI. Superintelligence, like the Gulf of America ⁓ and like Lake Ontario being renamed, he has now designated AI as SI, know, is having just been to Europe, SI is C. So maybe that's yes ⁓ in Italian or Spanish. But yeah, I think nadine: ⁓ sorry. I Yeah. Yeah, I am I refuse to play along with those games. So yeah, Anthropic. So get this. Anthropic in its IPO. So it's been seen by Reuters, I think the FT as well, saying that while revenue jumped twelvefold, operating loss exceeded eight billion dollars. But more interesting, and I'm getting this from just a little summary that I'm reading here in Capital Brief, that ⁓ there was more space in its henry: So do I. do I. nadine: IPO prospectus dedicated to you know r the self-preservation behaviors, the warnings about AI, risk factors taking up 260 pages of the IPO, about 80 of the filings, 261 pages, so twice as many as the forty-eight pages that actually described the business. henry: Yeah, it's quite bizarre, isn't it, that we have an IPO which includes statements that we could, by this company, could pose an existential threat to humanity. Now, you don't get that with most IPOs. I mean, when Maya came onto the market many years ago with lots of pictures and glossy stuff, we didn't get that kind of warning that it posed an existential threat to humanity. It's bizarre isn't it? odd pages of warnings. You know, it's crazy stuff. Nadine, I've got to say, I think in five, 10 years time, we're going to look back at all this craziness and go, you know, what were we all thinking? I mean, maybe we weren't thinking that this race, this space race, this arms race that we've got on at the moment to see who can spend the most money and make China grovel in the US wake. is just extraordinary I have to say it is ⁓ it is creating all sorts of problems all sorts of opportunities and you know having spent a month in Europe they're just working out that the internet exists ⁓ let alone AI you know they haven't even got uber you know that that's how that's how backward they are you're still talking to a taxi driver outside a railway station or an airport saying you know how much does it cost to get to this hotel and they go you know nadine: ⁓ Yeah. henry: It's very expensive this time of year. ⁓ You know, it's crackers. It's crackers. nadine: Yeah. It's so funny. ⁓ I wish I had a bell. We're gonna do a European vacation count because I was gonna weigh in there myself, Henry, if f if you don't mind me saying, but let's not let's not turn the stomachs of our listeners this early in the morning. we're glad to have you back regardless and really, really pleased you had a great, great time. ⁓ so then let's talk about what happened here. I just wanted to get your thoughts on Coden. Coden yesterday wasn't henry: No way in, go away, way away. No. No. Yeah. nadine: Absolute cracker. it and and I think that the share price move is also worth talking about. I mean, just the fact that it had a 24% surge. Yes, I get it, ⁓ because it did report, but I mean, still, these moves that we are seeing are just so exaggerated. henry: Yeah. Yeah. I think that there's a phrase that springs to mind in the land of the blind, the one-eyed man is king. you know, in a land of limited opportunity, shall we say, and somewhat, know, a whole slew of headwinds, a good story is hard to find. And Coden has been a good story. In some ways, I woke up very early this morning having the benefits of jet lag. And I was thinking about Coden, actually, as you do at 423, when the alarm goes or doesn't go off. And it occurred to me it was a bit like Nvidia in some respects. know Nvidia was a of a boring gaming chip company that suddenly discovered that its gaming chips were really really kind of valuable and useful. And similarly Kodan for a long time well it was a bit a yawn. You know it kind of made metal detectors gold. It a bit linked to gold prices. West African citizens were buying metal detectors to try and do artesian. ⁓ gold digging except for an of course you have the military communications are but who would have thought the part of that military communications side would be integral to ⁓ drones and ⁓ drone communication and they have made an absolute mozza so it like an invidia with their gaming chip suddenly becoming of the a i also at the s i chip of of choice you know we've seen code and which has been absolutely extraordinary I remember, you know, I was long this one and liked it. I think it was about 15 bucks and it got absolutely pasted over a period of time. We got down to nine or $10. And here we are, you know, multiples, multiples of that and 20 % moves in these sorts of things is, you know, as I say, in the land of the blind, the one-eyed man is king. And when you look across the market and you're trying to find a good story and trying to find one that's got great growth, know, doubling profits. Kodan kind of fits the bill and it covers the gold space, the military communication space, the defense spend. And now you've got this added bonus that its communication technology is being used massively for drone communication. And we all know the drones are the way of the future for so many things. it has been a superstar story, I have to say. when you look around, it's... They're not easy to find these superstar stories at the moment. I suspect the valuation is going to get a little bit crazy because of the land of the blind, et cetera. And people will stop looking at the market cap and just look at it going, wow, it's gone from 14 bucks to 65 or whatever it's going to go to. But it is a great, great Australian success story. nadine: Mm-hmm. Yeah, well what about REA? I mean, do you get excited? I don't think the market really did about it expanding into Ireland. henry: No. Into Ireland, yeah. Well, at least they speak the same language, which is good ⁓ in theory. Yeah, I, you know, obviously, you know, this is this is part of the R.E.A. strategy. There's there's no there's nothing bad about this particularly. And it does give them another ⁓ lever to pull in terms of growth. And clearly, you know, the the what's the Celtic dragon or the Celtic tiger, as it's called, the Irish economy has been going gangbusters. because it is part of the the EU and its domiciled for lots of tech companies and lots of pharmaceutical companies. So the Irish economy is going very, well. And, you know, it kind of makes sense to push into into those sort of markets that are going very, well. And Ireland being one. it's probably not a bad move at all. The market seems a little bit ho hum in terms of its reaction to it. But I think long term, it looks as if it's a pretty sensible move to diversify away from economies like Australia and housing markets like Australia, which is under some pressure at the moment to markets and economies that have got that growth for whatever reason if it's low tax and EU regime. nadine: I sort of missed a segue, but ⁓ one other company I was going to ask you about is Megaport. So ⁓ securing one billion dollars in AI contracts had a good day yesterday. Is this is this also one you may have missed or i are you still sort of put off by its volatile nature in the past, or can it ever live that down? henry: Yeah. Yeah. ⁓ Well, know volatility sometimes is opportunity as long as you keep your eye on the horizon and you're happy to be a little bit squeamish. ⁓ Megaport certainly is one of the broker favorites out there and they've got far higher valuations on Megaport and clearly it was a good deal and there is going to be a lot of focus on the sector, the data center sector ⁓ and the technology sector as we get the firmness IPO coming along which don't get me started on that one. nadine: Mm-hmm. henry: But you know, Megaport is certainly pulling all the right levers and it did have a pretty good day yesterday. There does tend to be short positions in that one and it does tend to be quite volatile. So you have to kind of gird your loins at times. And I think it's one of those stocks that when you see any weakness, you have to kind of start building a position in. yeah, it was a good day yesterday, good reaction. And I expect the brokers will be pretty happy as they have probably still got higher price targets on that one. nadine: goodness Henry, I just looked at the time. This is I've told I'm told this is supposed to be a quick morning podcast. So I will No, no, no, it's you and me both. So so what are you what are you sort of expecting today? Just a bit of ho hum? henry: I know. Here we are, rabbiting on. I thought it was a two minute. I was looking at two minutes tops. I'm expecting a little bit of ho-hum. I must admit it'll be stock specific at the moment. think you know, there's a lot of confused people out there at the moment certainly from the phone calls we're getting there is a lot of confused people out there as to what is going on in the markets at the moment. You've got higher interest rates. You've got higher bond yields. You've got debt issues corporate and and you know sovereign debt issues. It's not easy and September's been a crappy month. ⁓ October can bring out some nerves as well and just to add complications course you got the war the oil price is not just the oil price it's the refinery capacity of the world as well which is pushing prices you know was stunned I have to say Nadine I've been away for a month and when I came back from from from a month away know petrol was two bucks a litre when I left it's now 260 odd and you know if you think we're bad it was $2 to euros 50 for a liter in Italy. So if you multiply that by 1.6 ⁓ You kind of get the idea that they're suffering pretty much too and yeah, so it's It's it's a problem and we've got the midterms coming up as well, which seems to we've been talking about them for such a long time They've snuck up on us, you know that they're nearly upon us and that that's going to be interesting I wouldn't be surprised to mr. Trump pull some sort of rabbit out of the hat nadine: Mm-hmm. ⁓ yeah. henry: in terms of an Iranian solution and an oil price drop. That is if he can find the rabbit if he hasn't renamed it as something else. But there's always a possibility that we'll get a rabbit out of the hat before the midterms just to give him a boost. ⁓ you think there's a plan? Nadine. No. No. nadine: Yeah, well, you wonder if that was the plan all along, you know? ⁓ boy, let's not get too ⁓ cynical at this time in the morning. Look, Henry, ⁓ today we have the inflation data for August. We get the PCE inflation report in the US, we get Chinese PMI reads. So if you're ever bored, there'll be plenty of data to read. Henry Jennings, Marcus today, an absolute pleasure. henry: Pleasure in the day. nadine: Thank you for joining us. We'll speak soon. And that is it for Osbiz AM today, the 30th of September. You can catch all of how the day plays out on osbiz.com.au ⁓