Daily newsletter · Fri 18 Sep 2026
 | Sharespective Wall Street, before morning tea | Daily newsletter Fri 18 Sep 2026 |
 The Backup Plan Plus: Lennar's profit more than halved and the shares went up anyway. |
Good morning, and welcome to Friday. Saudi Arabia said half of its damaged East-West pipeline would be running again within days and the rest inside six weeks. Oil fell on it. Brent settled at US$104.14, down 1.60%, the US 10-year Treasury yield dropped about nine basis points to 4.95%, and Wall Street took back most of what the Federal Reserve had cost it on Wednesday. The S&P 500 rose 1.14% and the NASDAQ Composite 1.69%.
The best story of the session belonged to a company that makes generators. Generac has spent most of its life selling standby power to households and small businesses in the American midwest. Its biggest order ever arrived on Wednesday night from a cloud computing company.
Market snapshot
S&P 500 7,637.73 ▲ 1.14% | | NASDAQ 26,418.30 ▲ 1.69% | | NZX 50 13,756.59 ▲ 0.98% |
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ASX 200 8,732.00 ▲ 0.41% | | Generac US$207.20 ▲ 18.33% | | Fluence Energy US$7.65 ▼ 15.47% |
| POWER |
Amazon is buying up to US$8 billion of backup generators and took a stake in the maker
Generac disclosed the agreement in a filing on Wednesday evening and the shares did the rest on Thursday. They closed at US$207.20, up 18.33% from Wednesday's US$175.11, having traded a good deal higher than that when the news first landed. Amazon, one of our preferred stocks, has committed to US$2.4 billion of deliveries across 2027 and 2028, with total purchases that could reach US$8 billion. The machines sit beside data centres and start when the grid drops out.
The warrant is the unusual part. Amazon also received a warrant over 1.69 million Generac shares at US$200.93 each, worth as much as US$340 million. A warrant is a right to buy shares later at a price fixed now. More than 300,000 of them vested straight away. The rest vest in tranches as Amazon pays, and the lot only unlocks once US$8 billion has changed hands, a process that runs to 2033. Amazon has bought itself a discount on its own order, and Generac now has a customer who wants its share price to go up.
The same session showed where the hard part sits. Fluence Energy, which builds grid-scale battery systems, closed at US$7.65, down 15.47%, after cutting its full-year revenue guidance to about US$2.4 billion from roughly US$3 billion. A contract factory in Houston is the reason. Fluence had planned on 11 units a day through August and September. August averaged under one, and remedial work has since got it to three.
The catch whether Generac can build them. Nobody is short of demand for power equipment. Fluence spent Thursday showing what happens when the factory cannot keep up with the order book. |
| HOUSING |
Lennar's profit more than halved and the shares rose anyway
Lennar builds more houses than almost anyone in America, and it had a bad quarter. Revenue fell 8.6% to US$8.0 billion. Net earnings were US$284 million, or US$1.19 a share, against US$2.29 a share a year earlier. New orders dropped 9% to 20,879 homes and deliveries 3% to 20,840. The company trimmed its full-year target to 80,000 to 81,000 homes from 82,000 to 83,000. The shares closed at US$79.75, up 1.77%.
What a 12% incentive is. Lennar's average selling price was US$372,000, down from US$383,000, and about 12% of that price went back to the buyer in incentives. Most of it is a rate buydown, where the builder pays a lender up front to hold the buyer's mortgage rate down for a few years. It never appears as a discount on the sticker and it comes straight off the margin. Gross margin on home sales was 15.8%, against 17.5% a year ago. Stuart Miller, Lennar's executive chairman, said conditions had got worse since the last earnings call, with the 30-year mortgage rate near 6.8% at quarter-end.
So why did the stock go up? Bond yields fell hard on Thursday and every homebuilder in the country went along for the ride. There was something in the result too: gross margin was 15.6% in the second quarter, so it has stopped going backwards. A builder's share price tracks the mortgage rate more closely than it tracks the quarter just gone.
The other side that incentive bill is a forecast in disguise. Lennar is paying to hold mortgage rates down because the Federal Reserve is pushing them up, and on Wednesday the Fed said it has more to do. |
| ECONOMY |
New Zealand's economy grew twice as fast as the Reserve Bank expected
Stats NZ reported on Thursday that GDP rose 0.2% in the June quarter. Economists had picked 0.1% and the Reserve Bank had forecast nothing at all. Output was 2.6% higher than a year earlier, a fourth consecutive quarter of growth, and the March quarter was revised up to 0.9%. The NZX 50 closed at 13,756.59, up 0.98%.
Where the growth came from. Construction did most of it, up 2.7% in the quarter, with government services up 2% and wholesale trade up 1.3%. Nine of the 16 industries grew. The three that fell hardest all point at the fuel price: accommodation and food services down 3.8%, road transport down 1.7% and retail trade down 1%. Per person the economy managed 0.1%, and real household disposable income went backwards by 0.4%.
The official cash rate is 2.75%, and markets narrowly favour a rise to 3.00% at the next review on 28 October. Doug Steel at BNZ called the result a stronger than expected economic pulse. Brad Olson at Infometrics put the caveat on it: the data is three months old, and petrol has gone up since.
Food for thought the quarter that decides October is the one being lived through now. June's growth was banked before the oil price did its work, and the Reserve Bank will be marking September's numbers, not these ones. |
Newsworthy numbers
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196,000 Americans who filed a first claim for unemployment benefits in the week to 12 September, down 10,000 on the week before and under the 208,000 expected. Labor Day fell inside the period, so treat it gently. | | 6–3 the Bank of England's vote on Thursday to hold Bank Rate at 3.75%. Megan Greene, Catherine Mann and Huw Pill wanted 4%, the same three as in July, with UK inflation at 3.1% in August. |
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39 days how long the median Australian home now takes to sell, against 28 days a year ago, on Cotality's September figures. Vendors are discounting 4.2% off their asking prices, the widest gap since January 2023. | | 150,000 tickets sold for the Rugby League World Cup with a month to go. Fifty-three games across nine cities in Australia, New Zealand and Papua New Guinea, opening with the Kangaroos and the Kiwis at Allianz Stadium on 15 October. |
Worth a read
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01 | Splitting up Foodstuffs: Would it actually drive down grocery prices? — National wants the Commerce Commission to weigh breaking the co-operative into two nationwide chains, and its modelling puts prices 3.5% lower inside a year, worth up to $1,320 a household. Westpac's Kelly Eckhold doubts grocery inflation is a New Zealand-specific problem. |
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02 | How to avoid the 'worst kind of bullying' if hit with a debt collection notice — A debt older than six years is generally unenforceable in most Australian states, and three years in the Northern Territory. The National Debt Helpline took 187,905 calls in the year to August, up 12% on the year before. |
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03 | One man's designer trash is another man's side hustle — eBay carries more than 180,000 listings for empty boxes. Rolex and Omega packaging averaged around US$200 in 2021 and some now clears US$3,000, bought by resellers, counterfeiters and people who want a better shelf behind them in a photo. |
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04 | Astronomers just found the youngest known planet ever — Elias 2-24 b is under a million years old, 450 light-years away, and orbits 55 times further out than Earth does from the Sun. The models say a planet that size should need about five million years, and should form much closer in. |
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05 | Unsealed for the first time in 600 years, this tomb in Peru was just declared the 'discovery of the decade' — At least 38 Chimú burials with gold, copper, weapons and textiles, sealed before the Incas arrived and missed by every looter since. Roughly 7% of Chan Chan has been excavated. |
Wrapping up
The Bank of Japan announces today, and 97% of economists surveyed expect a quarter-point rise to 1.25%, a level Japan last saw in April 1995. The Reserve Bank of Australia meets on 29 September with the cash rate at 4.35%, and markets put a rise to 4.60% at better than 80% now the Fed has moved.
Costco and Darden Restaurants both report on Thursday 24 September. Watch membership fee income at Costco, which is where most of the profit actually comes from, and Olive Garden same-restaurant sales at Darden. Micron follows on 30 September. Closer to home, Stats NZ publishes August trade figures at 10:45am today, and Australia's August labour force report lands on 24 September.
Both currencies gained on Thursday as the US dollar came off. USD/NZD finished at 1.7440 and USD/AUD at 1.4059.
Back tomorrow, with the last session of the week.