Evening Wrap: ASX 200 slips as investors dump Wesfarmers, Breville, and Nick Scali on fading RBA rate cut hopes

The S&P/ASX 200 closed 24.6 points lower, down 0.27%.

There are two markets on the ASX right now: The rampaging bull market in small caps, and well, everything else!

Be sure to click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all the key economic data in tonight's Evening Wrap.

Also, I have detailed technical analysis on the S&P/ASX 200 in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 24.6 points lower at 8,956.8, almost smack–bang at the mid-point of the session's range (0.22% from its session low and 0.27% from its high). In the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by 127 to 150.

Fund flows: More of the same (and 🥱)

Snoozefest today 💤. Pretty close to the script, though, with relative strength in Gold (XGD) (+0.43%) and Resources (XJR) (+0.05%), versus weakness in RBA rate cut hopes going bye-bye Consumer Discretionary (XDJ) (-1.2%) and “usually lousy” Energy (XEJ) (-0.5%).

The rest were somewhere in the middle, but there’s still a “rates-sensitives getting hit” skew there with Real Estate (XPJ) (-0.43%), Telecommunications Services (XTJ) (-1.1%) and Information Technology (XIJ) (-0.43%) closer to the bottom of the sector performance list than the top.

Real estate is a “bond-proxy”, so when long term risk-free Aussie government bond yields rise (as they are now), it’s constituents appear less attractive. Infotech is "long duration / high PE", which means that earnings are skewed into the distant future, and therefore are discounted more harshly when benchmark rates rise. The Telco sector sits perfectly in between each theme – with bond proxies like Telstra (TLS) (-0.62%), and longer duration / higher PE stocks like CAR Group (CAR) (-2.8%) and REA Group (REA) (-2.1%).

So, whilst a snoozefest today, at least it made sense! One item I’ll draw your attention to – we discussed it in the ChartWatch *LIVE* Webinar last week: Small caps outperformed again today (S&P-ASX Small Ordinaries (XSO) (+0.1%)) . There are two markets on the ASX right now: The rampaging bull market in small caps, and well, everything else!

S&P-ASX Small Ordinaries chart

The ChartWatch *LIVE* Webinar is back tomorrow at 12pm AEDT. Make sure you're registered using the link above and bring 2 of your favourite ASX stocks to discuss! 🎙️

Today's best blue chip gainers

Today's worst blue chip losers

ChartWatch

S&P/ASX 200 (XJO)

S&P/ASX 200 chart (click here for full size image)

A small step in the wrong direction today. “Wrong direction” assuming you want Aussie stocks to go up, that is!

Because there is no doubt a bunch of investors who are either underweight – e.g., value investors refusing to commit at such “lofty/overvalued/dangerous/stupid” levels, or worse – those who are most certainly not trend followers and who are short (probably due to the same narrative as value investors!).

But, hey – who am I to say their method is any less sound than mine! 😁 Nope, as trend followers we love these naysayers – because to us they're just latent demand – forced to reluctantly pile into stocks when the XJO finally breaks out and they frantically try to undo their mistakes (and faulty logic!).

Let me assume that you’re in the camp of wanting Aussie stocks to go up. So, today’s modest supply side candle is less than ideal – but consider it against the broader trends, price action and candles:

• Trends:

  • ST trend = Up, well-established, steepening, acting as zone of dynamic demand = traders buy the dip = demand-side control ✅

  • LT trend = Up, well-established, steepening, acting as zone of dynamic demand = funds’ accumulating = demand-side control ✅

• Price action: Rising peaks & rising troughs = buy the dip = demand-side control ✅

• Candles: Predominance of demand-side candles (i.e. white bodied and or downward pointing shadows) = buy the dip, pervasive programmed buy orders = demand-side control ✅

So, for me, there’s little in today’s candle to be concerned about. What would concern me? That's easy:

• Large supply-side candles (i.e., black bodied and or upward pointing shadows) = sell the rally, supply-side growing in strength, demand-side less committed, unable to commit.

• Lower peaks and or lower troughs = supply reinforcement and demand removal respectively.

Until these signals of growing supply-side control appear, I have only one option (which is nice considering how confused so many investors are most days!): I prefer to stay the course here at FRP (Full Risk Position = My personal allowable capital allocation limit for my investments in Australian stocks is 100%).

Key levels: 8991-9055 is the key zone of supply, I will be very watchful for signs of excess supply in there. 8731 is the most important near-term point of demand, the price should not close below here if the demand-side is in control of the XJO’s price = ⚠️

Economy

Today

• 10:30 October Westpac Consumer Sentiment

  • -3.5% to 92.1 vs -3.1% in September

• 11:30 September ANZ Job Advertisements

  • -3.3% m/m vs +0.1% m/m in August

Later this week

Wednesday

• ALL DAY CHN Bank Holiday

Thursday

• 04:00 USA 10-y Bond Auction

• 05:00 USA September FOMC Meeting Minutes

• 11:00 AUS September MI Inflation Expectations (+4.7% p.a. in August)

• 23:30 USA Federal Reserve Chairman Jerome Powell speaks

Friday

• 12:00 AUS RBA Governor Michelle Bullock speaks

• 22:30 (Tentative due to shutdown) USA September Non-farm Payrolls

  • Non-Farm Employment Change: +52,000 forecast vs +22,000 in August

  • Average Hourly Earnings: +0.3% m/m forecast vs +0.3% m/m in August

  • Unemployment Rate: +4.3% forecast vs +4.3% in August

Saturday

• 01:00 USA October Preliminary UoM Consumer Sentiment (54.6 forecast vs 55.1 previous)

• 01:00 USA October Preliminary UoM Inflation Expectations (+4.7% p.a. in September)

Latest News

Interesting Movers

Trading higher

• +29.4% Ionic Rare Earths (IXR) – No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing long-term uptrend 🔎📈

• +22.2% Ioneer (INR) – Continued positive response to U.S. government investment in Thacker Pass lithium project, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up 🔎📈

• +20.0% Acusensus (ACE) – First major US state-wide automated enforcement contract, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +19.7% G50 Corp (G50) – No news, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +18.3% EDU (EDU) – Ikon T3'25 enrolments - up 82% on PCP, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +16.7% Warriedar Resources (WA8) – CMM Increases WA8 Scheme Consideration, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +15.7% Orezone Gold Corporation (ORE) – No news, rise is consistent with prevailing short-term uptrend and rising peaks and rising troughs 🔎📈

• +14.3% Tamboran Resources Corporation (TBN) – No news, rise is consistent with prevailing short and long-term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +13.3% Lumos Diagnostics (LDX) – No news, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +12.3% Gateway Mining (GML) – 44,000 Metre Aircore Program Commenced, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +11.1% Australian Strategic Materials (ASM) – No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up, added to ChartWatch ASX Scans Uptrends list today 🔎📈

• +11.0% Finder Energy (FDR) – No news, rise is consistent with prevailing short and long-term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +9.6% Greatland Gold (GGP) – September 2025 Quarterly Production Update, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

Trading lower

• -34.0% European Lithium (EUR) – CRML raises US$35m and EUR sells 3m CRML shares for US$21m, pulled back in the wake of recent sharp rally.

• -11.6% Vection Technologies (VR1) – No news since 06-Oct Vection secures $8m first Framework order, pulled back in the wake of recent sharp rally.

• -11.5% Cobalt Blue (COB) – No news, pulled back in the wake of recent sharp rally.

• -11.0% St Barbara (SBM) – A$58 million Institutional Placement to Advance Projects, pulled back in the wake of recent sharp rally.

• -10.9% Aldoro Resources (ARN) – Aldoro Commences Heavy Rare Earth Exploration Program.

Broker Moves

Life360 Inc (360)

• Retained at buy at Citi; Price Target: $47.00

ALS (ALQ)

• Retained at buy at Morgans; Price Target: $24.60

Amotiv (AOV)

• Retained at outperform at Macquarie; Price Target: $11.66

Eagers Automotive (APE)

• Retained at accumulate at Morgans; Price Target: $33.35 from $26.60

ARB Corporation (ARB)

• Retained at outperform at Macquarie; Price Target: $44.90

• Retained at buy at Ord Minnett; Price Target: $42.00

Autosports Group (ASG)

• Retained at outperform at Macquarie; Price Target: $3.63

Bapcor (BAP)

• Retained at neutral at Macquarie; Price Target: $3.85

Brazilian Rare Earths (BRE)

• Retained at speculative buy at Ord Minnett; Price Target: $6.30

Capricorn Metals (CMM)

• Retained at buy at Argonaut Securities; Price Target: $17.00 from $15.30

• Retained at buy at Canaccord Genuity; Price Target: $13.55

• Retained at underperform at Macquarie; Price Target: $11.00

Cochlear (COH)

• Upgraded to buy from hold at Canaccord Genuity; Price Target: $330.00

Digico Infrastructure REIT (DGT)

• Retained at buy at Ord Minnett; Price Target: $3.90 from $4.00

Electro Optic Systems Holdings (EOS)

• Retained at buy at Bell Potter; Price Target: $11.20 from $11.00

• Retained at speculative buy at Ord Minnett; Price Target: $11.18

FleetPartners Group (FPR)

• Retained at outperform at Macquarie; Price Target: $3.68

Iluka Resources (ILU)

• Downgraded to sell from hold at Ord Minnett; Price Target: $6.00 from $5.50

Karoon Energy (KAR)

• Retained at neutral at Macquarie; Price Target: $1.70 from $1.75

McMillan Shakespeare (MMS)

• Retained at outperform at Macquarie; Price Target: $19.69

Micro-X (MX1)

• Retained at speculative buy at Morgans; Price Target: $0.17

Northern Star Resources (NST)

• Upgraded to buy from hold at Bell Potter; Price Target: $30.00 from $20.85

Neurizon Therapeutics (NUZ)

• Retained at speculative buy at Morgans; Price Target: $0.39 from $0.42

NEXTDC (NXT)

• Retained at positive at Morgan Stanley; Price Target: $20.50

Ridley Corporation (RIC)

• Initiated at accumulate at Morgans; Price Target: $3.25

Select Harvests (SHV)

• Retained at buy at Bell Potter; Price Target: $5.45

• Retained at buy at Ord Minnett; Price Target: $4.95 from $5.65

Smartgroup Corporation (SIQ)

• Retained at outperform at Macquarie; Price Target: $8.99

Seven West Media (SWM)

• Retained at underweight at Morgan Stanley; Price Target: $0.15

Southern Cross Media Group (SXL)

• Retained at underweight at Morgan Stanley; Price Target: $0.65

TPG Telecom (TPG)

• Retained at accumulate at Ord Minnett; Price Target: $5.75

Scans