Pitcher of Wealth – Equities outlook September 2026
Equities
Table 1: Global and Australian sector price returns for August 2026
| Market/sector | Australian equities | Global equities |
| Overall market | 1.1% | 0.5% |
| Consumer Discretionary | 8.1% | 1.8% |
| Consumer Staples | 0.4% | 3.3% |
| Energy | 3.5% | 2.1% |
| Financials | 6.1% | 0.7% |
| Healthcare | 18.7% | 1.4% |
| Industrials | 1.9% | 2.6% |
| Information Technology | 6.3% | 4.0% |
| Materials | 12.0% | 6.9% |
| Real Estate | 7.0% | 4.0% |
| Communication Services | 2.8% | 2.1% |
| Utilities | 7.0% | 5.5% |
Source: Bloomberg; Australian Equities: S&P/ASX 200 Index, Global Equities: MSCI World ex Australia Index in AUD
Global
Global markets were up 0.5% with strength in Materials (up 6.9%), Information Technology (+4%) and Energy (+2.1%) being mostly offset by weakness in sectors sensitive to higher interest rates. The surge in long-term bond yields saw these “bond proxies” (sectors defined more by income than growth returns) such as Utilities (down 5.5%) and Real Estate (down 4%) struggle markedly for August. The move higher for bond yields has been a global phenomenon. It reflects several causes including inflationary pressures from the Middle East and higher underlying inflation from strong US growth suggesting short-term interest rates should be higher with a flow-on impact to bond yields. In addition, there is arguably a crowding out effect at play with the sheer growth in capital spending to fund data centre construction accompanied by a surge in bond issuance by leading technology stocks including Amazon and Microsoft. This issuance needs to be funded and may be pushing government yields higher as fixed income investors weigh the relative attractiveness of these market leaders’ debt vs government bonds tied to countries with burgeoning deficit spending. A recent example saw Alphabet raise $5.5bn in August with Amazon expected to follow in short order[1].
The on-again off-again state of hostilities in the Middle East supported Energy names as the US and Iran resumed active hostilities raising investor fears over the flow of energy exports from the Middle East. A sizeable rally in the gold price, spurred by concerns on the burgeoning US deficit and geopolitical volatility, helped spur a recovery in the Materials sector. Meanwhile in Information Technology some positive signs on AI integration amongst leading software names such as Salesforce helped drive a recovery from depressed valuations as investor optimism over reduced AI disruption grew.
The continued strength of the Australian dollar, up 2.1% against the US dollar, weighed against unhedged global equity investments. This has been part of a broader spell of US dollar weakness as investor sentiment soured over the growing debt burden coupled with political volatility. Fed Chairman Warsh’s speech on 28 August promising to combat inflation at helped bolster a partial recovery in the US dollar thanks to the prospect of higher US interest rates making the US dollar relatively more attractive.
Australia
The Australian market showcased reasonable strength through reporting season rising 1.1% with a mix of larger, macroeconomic factors as well as company-specific results driving performance. Healthcare was the standout performer (up 18.7%) followed by Materials (up 12%) and Utilities (up 7%). These stood in stark contrast to the laggards led lower by Consumer Discretionary (down 8.1%), Real Estate (down 7%) and Financials (down 6.1%).
Notable company news for the month included:
- CBA (down 9.9%) Commonwealth Bank beat market expectations by 1.2% with a FY26 cash profit of $10.98bn, representing 7% growth on FY25. Investor concern over a slowdown in credit growth drove the share price lower with a 15% decline in inbound mortgage applications reflective of sector-wide weakness following the May Federal Budget taxation changes.
- AUB (up 4.7%) AUB Group was rewarded for broad-based strength with many of its key divisions firing including its core Australian broking business with underlying net profit before tax up 10%. Management also exceeded investor expectations with 13.5% growth in net profit expected for FY27, 1.7% ahead of expectations.
- CAR (up 6.4%): Carsales was well rewarded for strong guidance with forecasts for revenue (+12.5%) and underlying net profit (+10.5%) reasonably ahead of expectations for 9.8% and 9.8% respectively. There were certain points of weakness in terms of margin compression due to competition facing its Korean operations as well as reinvestment in its US operations. The overall result was a strong setup and showcased little to no signs of meaningful disruption from AI or rival platforms in its key markets.
- CSL (up 39.4%): CSL confirmed prior updates with FY26 revenue and underlying profits down 1% and 2% respectively. It was strongly rewarded by investors for suggesting a turnaround was well underway. Management guided to underlying net profit growth of 5% as well flagging stronger outlooks above consensus for its core Behring and Seqirus divisions. Part of this guidance beat is misleading however with the change in its preferred underlying profit calculation moving from NPATA to NPAT. Comparing on a like-for-like basis reduces expected growth to 2%. The share price recovery reflects a mix of depressed expectations and further valuation support in the form of a new US$1.1bn buyback for FY27. Another factor has arguably been the search for safe haven investments amid geopolitical volatility with health care one of the few sectors to outperform quarter-to-date. The test going forward will be execution with meaningful earnings growth needed to justify the recent share price rally.
Appendix
Table 2: Asset class performance to 31 August 2026
| Annualised | |||||||
| Asset Class | 1-mth | 3-mth | 6-mth | 1-yr | 3-yr | 5-yr | |
| Equities | Australia | 1.5% | 4.5% | 0.3% | 4.4% | 11.2% | 7.8% |
| Australia – Small Caps | 5.2% | 0.2% | 6.3% | 1.2% | 9.8% | 2.2% | |
| International | 0.5% | 2.7% | 9.4% | 10.0% | 16.2% | 11.7% | |
| International – Hedged | 2.5% | 2.8% | 10.3% | 21.0% | 19.4% | 10.9% | |
| International – Small Caps | 0.7% | 2.5% | 6.4% | 12.5% | 13.6% | 7.7% | |
| Emerging Markets | 1.3% | 0.8% | 7.4% | 27.2% | 19.1% | 8.6% | |
| Australia – REITs | 6.7% | 5.1% | 5.8% | 15.5% | 6.8% | 2.9% | |
| International – REITs (H) | 3.1% | 1.0% | 1.1% | 9.6% | 8.6% | 0.5% | |
| International – Infrastructure (H) | 1.9% | 0.4% | 2.2% | 11.9% | 12.6% | 6.6% | |
| Alternatives | Gold | 7.6% | 1.8% | 16.3% | 17.7% | 27.5% | 20.1% |
| Managed Futures (USD) | 1.8% | 2.1% | 1.3% | 28.4% | 10.3% | 9.8% | |
| Global Cat Bonds (USD) | 2.2% | 4.4% | 6.4% | 12.7% | 13.7% | 10.9% | |
| Global Hybrids (AUD hedged) | 0.5% | 1.4% | 1.9% | 6.5% | 11.1% | 3.3% | |
|
Cash and fixed Income |
Australian Bonds | 0.2% | 0.3% | 0.5% | 0.6% | 3.3% | 0.1% |
| Australia – Inflation-linked | 0.5% | 0.3% | 0.4% | 1.0% | 2.4% | 0.2% | |
| Australia – Corporate | 0.1% | 0.8% | 1.2% | 1.7% | 4.8% | 1.8% | |
| International Bonds | 0.2% | 0.3% | 1.2% | 1.8% | 3.5% | 0.4% | |
| International – Corporate | 0.3% | 0.5% | 1.1% | 2.4% | 4.7% | 0.3% | |
| US Private Debt BDCs (USD) | 9.1% | 8.6% | 12.5% | 5.9% | 5.4% | 6.0% | |
| Australia – Subordinated Debt | 0.4% | 1.5% | 2.7% | 5.8% | 6.5% | 5.0% | |
| Australia – Floating Rate | 0.4% | 1.3% | 2.5% | 4.8% | 5.2% | 4.0% | |
| Australia – Cash | 0.4% | 1.1% | 2.2% | 4.0% | 4.2% | 3.3% | |
Note: the above are total returns assuming dividends are reinvested shown in Australian dollar terms unless otherwise specified.
[1] C. Lefort and J.Shapiro ‘Amazon poised to follow Alphabet with $A jumbo bond offer’, Australian Financial Review (31 August 2026), Amazon poised to follow Alphabet with Aussie dollar bond as hyperscalers diversify away from the US debt market, (accessed 2 September 2026).
