15 Sep 2026 - Glenmore Asset Management - Market Commentary

As is usually the case, the August 2026 reporting season was volatile, with ~60% of companies moving more than 5% on the day of reporting. In saying that, results generally proved to be better than expected, with the ASX All Ords Acc Index rising +1.9% during the month. Broadly speaking, stronger profitability margins helped to offset softer sales results. From sector perspective, resources were a clear stand-out (+11.4%), buoyed by strong commodity prices, whilst companies exposed to infrastructure investment, mining services and data centre expenditure also performed well. On the other hand, the impact of higher interest rates and changes to the Federal budget created strain upon both the housing market and consumer spending, weighing upon banks (-6.7%) and consumer discretionary (-10.6%). We note that the July inflation data (released late August) came in higher than forecast, increasing the chances of a rate hike later this calendar year. US equity markets rebounded from a weak July, with the S&P 500 and NASDAQ finishing +2.6% and +3.9%, respectively. This came despite continued bond market volatility and wariness regarding the returns being generated from the enormous amount of AI-related capex. Outside of the US, the Euro Stoxx 50 (+1.0%) and FTSE 100 (-0.4%) underperformed the US and Australian benchmarks.

In bond markets, the US 10-year bond yield rose +2bps to 4.75%. Its Australian counterpart rose more sharply, increasing +17bps to 5.1%. The Australian dollar climbed to US$0.72, implying an increase of 1.5 cents.