“Discipline is doing what needs to be done, even when you don’t feel like doing it.” – Unknown
Market Insights
Australian Market
The S&P/ASX200 Accumulation Index rose 3.1% in August, marking another strong month for Australian eqAustralian equities were mixed in September, as investors balanced optimism over U.S. rate cuts with domestic inflation pressures and cautious RBA commentary.
The ASX 200 Total Return Index fell -0.8%, with energy (-9.8%) the weakest sector, impacted by the collapse of the proposed Santos takeover. Materials (+9.2%) led the market, supported by a broad rally in gold miners as the metal neared US$4,000/oz.
The domestic economy continues to show resilience.
Australia’s August CPI rose 3.0% YoY, the highest reading in a year, as electricity rebates rolled off and household service costs increased. Markets now price only one RBA rate cut by March 2026, down from two at the start of September. Unemployment held steady at ~4.2%, with solid full-time job growth but a decline in vacancies, suggesting the labour market is starting to cool.
Performance across market segments diverged sharply. Small and mid-cap equities again outperformed: the ASX Small Ordinaries Accumulation Index gained +3.4%, and the ASX300 ex-20 rose +0.85%, while large caps were flat to down. In our opinion, this rotation reflects growing investor interest in companies with earnings leverage to falling global rates, particularly gold, copper, and early-cycle industrials.
Defensives such as Consumer Staples and Healthcare lagged, while higher-growth sectors like Technology, Biotech, and Defence posted strong gains. Meanwhile, the “defence spending thematic” gained further momentum, pushing stocks such as DroneShield, Electro Optic Systems, and Codan spiking higher.
Global Markets
Global equities extended their upward trend in September, with the MSCI ACWI (AUD) gaining 2.33%, with local market gains partly offset by AUD strength. Emerging markets led the rally, driven by China’s partial recovery and semiconductor strength across Asia.
In the U.S., the S&P 500 advanced around +3.6%, propelled by resilient earnings and shifting Fed expectations which cut interest rates by 25 bps to 4.00%-4.25%, its first reduction of 2025. Core inflation was roughly stable, and the labour market is showing signs of loosening.
European markets posted modest gains amid a backdrop of easing inflation and soft growth. The ECB held policy steady, emphasizing a wait-and-see stance given historically aggressive cuts earlier in the year.
Asia delivered standout returns: Japan extended gains, with the Nikkei hitting multi-decade highs, supported by corporate profit strength and a benign BoJ posture. China’s equity rebound was powered by renewed stimulus expectations, whilst trade tensions continue to be watched.
Commodities diverged: gold continues to surge (up another ~+10%), driven by real yield compression and liquidity optimism. Oil was volatile and weakened over the month. Copper rebounded up month-over-month, reflecting hopes of renewed industrial demand.
Geopolitically, markets watched the U.S. budget impasse (leading to a government shutdown) with caution and the court victory shielding Fed Governor Lisa Cook from removal, boosting perceptions of some stability. Meanwhile, the U.S. and EU have progressed a framework to resolve tariff friction, and the U.S. and Japan revised auto import agreements, reducing trade overhangs.
…To read the full version, or listen to a summary, please click the links below:
