NEWS + VIEWS – 11/09/2026
MARKETS
Over the past week, global share markets have been pressured by a combination of geopolitical tensions, rising oil prices and renewed inflation concerns. The escalating conflict involving the US and Iran pushed Brent crude above US$100 a barrel, raising fears that higher energy costs will reignite inflation. Stronger-than-expected US inflation data and resilient economic conditions increased expectations that the Federal Reserve may raise rates at its September meeting.
In Australia, the ASX 200 has been hit particularly hard by rising interest-rate expectations and the oil shock. The index fell around -1% on Thursday, with banks and mining companies among the major decliners. Investors are increasingly concerned that higher fuel and energy prices could add to Australian inflation and encourage the Reserve Bank to raise interest rates again, with markets putting a high probability on a September hike.
REPORTING SEASON TAKEAWAYS
The one thing that stood out the most from the August reporting season was the number of companies that rallied on better-than-expected results only to give up those gains in the days and weeks that followed. According to Goldman Sachs’ Australian equity strategist Matthew Ross, almost half of the companies in the ASX 200 rose or fell by 5% on their earnings result, compared with a long-term average of 28%.
The price action has been attributed to the rise of passive investing, pod shops and quant funds, which trade on daily market events and mean that small beats and misses can trigger outsized share price reactions. While the heightened share market volatility has become a well-established theme of reporting season, Ross said that this time around, many companies had given up their gains from their earnings results by the end of August.
Of the 21 ASX 200 companies that jumped by more than 10% on their earnings result, the average share price has fallen -4% since then, with seven of them underperforming the market by 10%. The most prominent example of this trend was medical software imaging group Pro Medicus (PME), which jumped almost 12% to $196.75 when it reported on August 18, but has since fallen more than -15%. CAR Group (CAR), which owns the vehicle listings platform Carsales, jumped 10% to $29.70 when it reported on August 10, but has since fallen -16%.
Ross said that the primary outlier to this emerging trend was blood plasma giant CSL, which rocketed more than 17% to $157.82 when it reported on August 18, and has risen another 7% since then. It helped the healthcare sector to return 19.3% in August, which was the highest monthly return for the sector on record. On the other hand, slowing credit growth and housing worries led banks to fall -9.3%, their worst share price month since June 2022.
Morgan Stanley equity strategist Chris Nicol said that his main takeaway from the latest reporting season was that an ASX company simply meeting earnings expectations was no longer good enough. Full-year results delivered more earnings beats than misses, but constrained outlooks and weak sentiment weighed on future growth and earnings levels.
While Australia avoided a broad earnings meltdown, the outlook remains highly uneven, with downside risks continuing to build, particularly in domestically exposed sectors. Share price performance increasingly reflected the quality and sustainability of forward earnings, the credibility of guidance, valuation support, and capital allocation discipline.
US BORROWING COSTS
US borrowing costs hit a fresh high last week as renewed strikes in the Middle East pushed up oil prices and heightened concerns over inflation. The 10-year treasury yield rose to 4.9%, its highest level since January 2025, as oil prices reached US$100 a barrel. Such movements on global bond markets affect rates at which the US government can borrow money, but also influence rates people pay for mortgages, car loans and credit cards.
The spike in borrowing costs comes as fears over the pace of price rises in the US have led to increased speculation that the Federal Reserve will increase interest rates later this month. Latest figures show prices rose 3.4% in the year to July, above the Fed's 2% target, however, interest rates have been left unchanged for months between 3.5% and 3.75%. Fed Chair Kevin Warsh has remained tight-lipped about the potential path of interest rates, but investors have been monitoring comments in recent days and expectations of a rate hike this month have grown.
Inflation is concerning both the Fed and global investors, which is driving the increased yields on bond markets. Governments sell bonds to raise money for spending, and bond investors typically demand higher returns if inflation is high or they expect it to be elevated in the future, and such rates tend to set the path for borrowing costs in economies around the world.
Besides inflation, investors also have concerns about the amount of borrowing from governments around the world as well spending by Big Tech firms, with uncertainty remaining over the return on investment in AI. In the US, national debt has passed the US$40 trillion mark, doubling in just the space of a decade under both the Trump and Biden administrations.
After borrowing costs over 30 years hit levels not seen since 2007, Treasury Secretary Scott Bessent said that the US government would buy back more debt in a bid to lower rates, but the market's reaction to the announcement proved short-lived.
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