Morning Wrap: ASX 200 to rise, S&P 500 nears record, Trump strikes Russia diesel deal

In a nutshell:

• Wall Street capped a volatile week higher, with tech rebounding from Thursday's AI wobble and the S&P 500 finishing within reach of a record ahead of bank earnings

• Trump's diesel deal with Putin waived Russian sanctions through April 2027, and Moscow partially lifted its export ban over the weekend

• Middle East risks flared over the weekend after a Houthi strike killed 12 at Riyadh's airport, while Bloomberg reported Russia is supplying Iran with missiles

Let's dive in.

• Major US benchmarks finished higher and near best levels, with all three indices notching weekly gains

• US weekly recap – S&P 500 (+1.15%), Nasdaq (+0.64%), Dow (+0.93%), Russell 2000 (-0.91%)

• Long-dated Treasury yields steadied but stayed elevated, with the 10-year hovering around 5.25%, close to the 24-year high reached earlier in the week (YF)

• Earnings season kicks off Tuesday with the major Wall Street banks, with expectations for blockbuster third quarter results as the AI trade keeps the rally alive (YF)

• AI stocks steadied after Bloomberg reported OpenAI expects annualised revenue to reach or exceed $70bn by year-end, easing Thursday's jitters over an FT report it topped out near $50bn (YF)

• Telecom stocks were hammered after SpaceX agreed to buy a nationwide 800 MHz spectrum portfolio for Starlink Mobile, with T-Mobile down 13% and AT&T and Verizon off 10% each at midday (CNBC)

• Bull market turns four on Monday, with its 119% advance sitting mid-pack against every bull run since the 1950s, says Truist's Keith Lerner (YF)

• Midterms historically bullish, with the S&P 500 rising in 21 of the last 23 cycles from one month before the vote to two months after, says Deutsche Bank's Jim Reid (YF)

• Delta Air Lines Q3 adjusted revenue up 15.7% year-on-year to $17.58bn, ~1% below ests, adjusted EPS of $1.72 missed ests by ~5%. Fuel bill jumped 62% to $4.1bn on the Iran war, prompting a guidance cut and a $6bn higher annual fuel bill (YF)

• Apple shares slipped after Nikkei reported October production orders for the iPhone 18 Pro and Pro Max were cut 15% from original plans (CNBC)

• Moderna jumped 9% to its highest since 2021 after the New York Times detailed a public-private push to accelerate cancer vaccine development, with Pfizer and Merck also higher (YF)

• Nvidia is in early talks to boost its investment in open-weight model developer Reflection AI or offer the startup computing power (BBG)

• SpaceX shares rose on its spectrum deal, which Evercore ISI called the clearest signal yet that Starlink Mobile is moving toward a direct-to-consumer US service (YF)

• Houthi strike on Riyadh's main airport killed at least 12 and wounded more than 300, the third attack on King Khalid International this week, with all flights diverted (CNN)

• Russia is supplying Iran with missiles, a Western official said, as Tehran is said to have preserved its missile and drone factories despite months of bombing (BBG)

• Kremlin said Putin relayed an Iran war proposal to Trump in agreement with Iranian President Masoud Pezeshkian (CNBC)

• Trump said it is "time for Ukraine to get a new president", blaming Zelenskiy for high US diesel prices after he criticised the Putin deal (CNBC)

• Trump struck the diesel deal after Zelenskiy ignored half a dozen US requests to stop attacking Russian oil refineries, a US official told Axios (Axios)

• Trump struck a diesel deal with Putin, saying Russia will supply 300,000 tonnes immediately, 500,000 tonnes in November and 1 million tonnes thereafter to US and global markets (CNBC)

• US Treasury waived sanctions on Russian diesel through April 2027 under a temporary general license issued Friday (CNBC)

• Russia partially lifted its diesel export ban from Saturday, allowing 500,000 tonnes to reach international markets as oil companies begin negotiating export contracts (BBG)

• Trump said he is considering suspending the federal gasoline tax and teased an upcoming diesel announcement ahead of Friday's Putin deal (CNBC)

• China plans to resume refined fuel exports after a brief halt over the Golden Week holiday, adding to pressure on oil prices, says PVM's Tamas Varga (CNBC)

• RBI rolled out its strongest rupee defence since the 2013 taper tantrum, opening a dollar window for state oil refiners and adding a reserve requirement on FX derivatives (BBG)

• US consumer sentiment slid to a five-month low of 46.3 in October's preliminary University of Michigan read, below the 48 expected, as cost-of-living frustration mounted (YF) 

• Genus Plus buys NZ telco infrastructure contractor Universal Communications Group for NZ$38.25m upfront plus NZ$1.75m deferred and up to NZ$25m in FY27-FY28 earn-outs, a 5.1x EV/EBIT multiple. UCG holds a long-term Chorus maintenance contract and posted unaudited FY26 revenue of NZ$96m and EBIT of NZ$7.8m. Immediately EPS accretive (GNP)

• Ryman Healthcare posts 379 occupation right sales in Q2 FY27, resales up 14% on pcp to 312 and an eight-quarter high, against 67 new sales. Aged care occupancy lifted 3.3ppt to 94.0% and new stock fell 67 units to 347. Reaffirms FY27 build guidance (RYM)

• SCEE Group acquires Victorian fire protection and HVAC provider Entire Operations for up to $112.1m, with $70m cash on completion and up to $42.1m in earn-outs tied to FY27-FY29 EBIT. Implies 5.5x FY26 EV/EBIT at maximum base earn-out. Entire booked $191m revenue and $17.5m EBIT in FY26 (SXE)

• Summerset Group sells 415 occupation rights in Q3, resales up 36% on pcp to 240 but new sales of 175 down year-on-year as Middle East conflict uncertainty stalled prospective residents’ home sales. YTD sales up 10% to 1,228. Says August’s DMF lift to 30% hasn’t dented contracting rates (SNZ)

• Commodities strength: A very strong overnight session across the commodity complex, led by zinc (+3.2%), platinum (+2.8%), silver (+2.7% to US$60.77/oz), copper (+2.4% to US$6.75/lb), palladium (+2.1%) and gold (+1.4% to US$4,194/oz). There was no clear driver, with the US Dollar Index slightly higher and bond yields flattish. The resource-related ETFs on our overnight watchlist traded higher. Copper Miners soared 4.2% (still ~12% below its 26-Aug record) and Gold Miners gained 2.9%, while Rare Earths/Strategic Metals and Uranium lagged with gains of less than 1%.

• Software breaks out: The iShares Expanded Tech Software ETF has looked constructive for weeks, with relatively shallow pullbacks, higher lows and a hold above its 50-day moving average. It gained 2.8% overnight to close at its highest level since 4-Nov-25. That follows a very strong Friday session for local tech (which is largely software), with Pro Medicus, WiseTech, Life360 and Xero all up 3-4%. Local names have traded far less constructively than their US peers, and Friday was the first sign of strength after a 15-20% tumble in recent weeks. Perhaps we’ll see more follow-through today.

Stocks trading ex-dividend:

• Mon 12 Oct: Civmec (CVL) – $0.035, Dominion Income Trust 1 (DN1) – $0.633, Turners Automotive Group (TRA) – $0.056, Washington H. Soul Pattinson (SOL) – $0.63

• Tue 13 Oct: Katana Capital (KAT) – $0.05, Perenti (PRN) – $0.045, Sandon Capital (SNC) – $0.005, Star Combo Pharma (S66) – $0.003

• Wed 14 Oct: United Overseas Australia (UOS) – $0.02

• Thu 15 Oct: Acorn Capital Investment Fund (ACQ) – $0.035, Australian Foundation Investment Company (AFI) – $0.092, Cobram Estate Olives (CBO) – $0.045, Fat Prophets Global Contrarian Fund (FPC) – $0.03, Horizon Oil (HZN) – $0.01, K&S Corporation (KSC) – $0.06, Rivco Australia (RIV) – $0.018, WAM Research (WAX) – $0.05

• Fri 16 Oct: Gowing Bros (GOW) – $0.03, WAM Microcap (WMI) – $0.053

Other ASX corporate actions today:       

• Dividends paid: CAR Group (CAR), Inghams (ING), Macmahon (MAH), TPC Consolidated (TPC)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.