The S&P/ASX 200 Accumulation Index rose 0.2% for the week, led by gains in materials (up 3.0%) and energy (up 2.4%). The S&P/ASX Small Ordinaries Accumulation Index fell 1.4%.
Australian GDP grew 0.4% in the September quarter, down from 0.7% the previous quarter, driven mainly by data centre investment and the ongoing strength of the housing market. The Australian Energy Market Commission reported that a wave of renewable energy projects could reduce unit power charges by 2030, however prices would then rise by as much as 13% over the following five years unless new wind projects and high-voltage power lines are built in a timely manner. Renewable energy generation surpassed fossil fuels on a monthly basis for the first time in Australia.
In the US, the S&P 500 Index edged up 0.4% and the Small Cap 600 Index gained 0.6% on expectations of an interest rate cut by the Federal Reserve at its meeting this week. Manufacturing activity contracted for the ninth straight month in November, according to the Institute for Supply Management. Services activity expanded slightly faster than in October, with the services Purchasing Managers’ Index (PMI) rising to 52.6%, the highest level in nine months. Payroll processor Automatic Data Processing (NASDAQ: ADP) reported private sector payrolls fell by 32,000 in November, reversing October’s revised gain of 47,000. Economists noted that hiring remains choppy amid macroeconomic uncertainty. The Bureau of Economic Analysis reported that the Fed’s preferred inflation measure, the PCE index, rose 0.3% in September, matching August. Core PCE rose 0.2%, also unchanged. Both measures increased 2.8% year on year.
Retail giant Costco Wholesale Corp (NASDAQ: COST) has joined other companies suing the Trump administration over tariffs. The US Supreme Court is considering the legality of the tariffs, which could lead to refunds if they are overturned.
The MSCI World Index (AUD) fell 0.9%. Ten-year Japanese government bond yields reached a 17-year high of 1.95% on Friday amid speculation the Bank of Japan will raise rates later this month.
Copper prices rose 3.6%, supported by another broker report forecasting a global supply shortage.
Looking ahead, the Reserve Bank of Australia will announce its interest rate decision on Tuesday, with the cash rate widely expected to be left on hold. On Wednesday (Thursday morning Australian time), the US Federal Reserve will release its decision, where markets are expecting an interest rate cut. Other central banks in Canada, Switzerland, Brazil and Turkey will also announce rate decisions. China will publish November trade account data and inflation figures.
Stock watch
Rio Tinto (ASX: RIO)
Rio Tinto, a global miner of iron ore, aluminium and copper, outlined plans at its recent capital markets day to release between US$5-10 billion from asset sales. These asset sales include its borates and titanium businesses, to reduce debt and fund growth. The company announced a US$650 million annual cost-saving target by early 2026 and will defer some spending, cutting medium-term capital expenditure to US$10 billion per year. Its decarbonisation program has been scaled back from US$5-6 billion to US$1-2 billion by 2030. Strong production and earnings growth are expected to support ongoing attractive free cash flow and dividend yields over the medium term.
Held in: WAM Leaders (ASX: WLE), WAM Income Maximiser (ASX: WMX) and Wilson Asset Management Leaders Fund
Tuas (ASX: TUA)
Tuas, a provider of mobile and broadband telecommunication services (formerly TPG Singapore), held its annual general meeting recently, reporting an acceleration in subscription growth both on the mobile and fixed broadband divisions in Q1 FY2026, boosted by the M1 acquisition announcement which strengthened its brand presence. Industry analytics rank Tuas’ Simba brand among the top tier for speed and latency. The M1 acquisition is progressing with financing secured from six banks and regulatory approval expected in the coming months. Tuas expects FY2026 capital expenditure in the range of $45-55 million, positioning the company well to integrate M1 and capture future growth opportunities once regulatory approval is secured.
Held in: WAM Capital (ASX: WAM), WAM Leaders, WAM Global (ASX: WGB), WAM Microcap (ASX: WMI), WAM Income Maximiser, WAM Research (ASX: WAX), WAM Active (ASX: WAA), Wilson Asset Management Leaders Fund and Wilson Asset Management Founders Fund
Allfunds Group (AMS: ALLFG)
Allfunds Group, a leading global WealthTech platform with the world’s largest fund distribution network, provides tailored services for fund houses and distributors. The company has been expanding its software-as-a-service (SaaS) and data analytics offerings, successfully shifting its revenue mix away from market-dependent volume fees towards stable, recurring subscription revenue streams. On 27 November, Deutsche Boerse, the German stock exchange operator, announced a non-binding proposal to acquire Allfunds for €8.80 per share, representing a 33% premium to the share price at that time. Although the deal is not yet finalised, we believe that the bid highlights the strategic value of Allfunds Group and reinforces our view that the company’s growth potential is undervalued by the market.
Held in: WAM Global
Port of Portland (Palisade Group)
The Port of Portland is a deep-water marine terminal located in Victoria that facilitates the bulk transportation of commodities. This is Victoria’s only naturally deep-water port, and represents a central logistics hub, strategically located between Melbourne and Adelaide, serving as the international gateway for the Green Triangle region, which is a major cross-border forestry region between South Australia and Victoria, that is well known for its natural resources. This asset is controlled by WAM Alternative Assets’ infrastructure partner Palisade Group, which has been invested in the port since 2012 and has continued to maximise value through active management of the asset. Palisade is currently in the planning stages for storage expansion at the port to support additional grain and critical minerals output arising from the development of new critical mineral mines in the region. We expect the asset to continue to generate attractive returns in FY2026 and beyond, driven by resilient demand and a supportive operating environment.
Held in: WAM Alternative Assets (ASX: WMA)
Why we’re backing resources over the banks
Despite the recent ‘Santa rally’ in global equities, WAM Leaders and WAM Income Maximiser Lead Portfolio Manager Matthew Haupt is wary of the outlook for domestically exposed Australian stocks. With local inflation surprising on the upside and markets now contemplating rate hikes rather than cuts in 2026, Australia’s monetary policy path is diverging from the US, creating a headwind for rate-sensitive sectors and an already highly valued banking sector.
Following a recent research trip to China, Matthew sees growing signs of stimulus and a renewed focus on the private sector, infrastructure and artificial intelligence. This underpins the investment team’s preference for resources, where they are constructive on aluminium, coal and iron ore, and believe the sector still looks attractive into 2026.
By contrast, there is greater caution regarding the major Australian banks after a strong two-year run, with Matthew arguing that elevated valuations are normalising as offshore capital rotates out of crowded Australian names and back into North Asia.
Read the full article with Matthew’s market views in The Australian here.
Index returns performance table
