Daily newsletter · Fri 25 Sep 2026
 | Sharespective Wall Street, before morning tea | Daily newsletter Fri 25 Sep 2026 |
 The Excuse Note Plus: Costco's best sales number in years had a tank of petrol in it. |
Good morning, and welcome to Friday. The S&P 500 spent Thursday going nowhere and finished 1.90 points lower at 7,704.13. The NASDAQ Composite added 3.34 points. The bond market was busier. The 30-year Treasury yield reached 5.43%, its highest since 2004.
The Dow Jones Industrial Average fell 0.31% for a third straight loss. Brent crude settled 2.5% higher at US$105.69 a barrel after Houthi missiles hit Saudi Arabia. It had been US$108.23 before reports that American and Iranian officials were talking in New York.
In company news, Meta Platforms, one of our preferred stocks, rose 4.5% after Mark Zuckerberg said Muse will take a small cut of what it buys for you. Elsewhere, Darden Restaurants fell about 6% after same-restaurant sales at Olive Garden grew 1.1%. Finally, Charles River Laboratories rose more than 5% after lifting its guidance at an investor day.
Blame the bond market.
Market snapshot
S&P 500 7,704.13 ▼ 0.02% | | NASDAQ 26,939.37 ▲ 0.01% | | NZX 50 13,825 ▲ 0.02% |
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ASX 200 8,702 ▼ 0.72% | | MGM Resorts US$33.69 ▼ 10.99% | | Oracle US$139.52 ▼ 3.49% |
| DATA CENTRES |
Oracle told the owner of its newest data centre it might not pay on time
Oracle closed at US$139.52 on Thursday, down 3.49%, after Bloomberg reported it had sent a force majeure notice to the developer of Project Jupiter. That is a 2.45-gigawatt campus on 1,400 acres in Doña Ana County, New Mexico, built to serve Oracle's computing contract with OpenAI.
A force majeure notice is an excuse note with legal weight. It says events outside a company's control may stop it meeting its obligations. Oracle is not giving up the site. It wants the right to defer payments if the campus misses its 2028 opening.
The hold-up is gas. Jupiter runs on Bloom Energy fuel cells fed by an Energy Transfer pipeline, and New Mexico's State Land Office has refused the route twice, in March and again in July. The pipeline's start date has slipped to 1 February 2027.
Lenders noticed first. Around 20 banks put up a US$18 billion loan for the campus, and that debt has been quoted between 89 and 91 cents in the dollar. Oracle says the project is on schedule. Blue Owl Capital, the developer, says the financial commitments stand.
What to watch the air-quality permit, due by 23 November. Oracle spent US$28.5 billion on capital works in the quarter to 31 August, against US$8.5 billion a year earlier. I'd want to see who wears the cost when one of these campuses runs late, because this is the first real test of it. |
| RETAIL |
Costco's headline sales number had a tank of petrol in it
Costco reported after Thursday's close in New York. Net sales rose 11.2% to US$93.9 billion in the 16 weeks to 30 August, and American same-store sales grew 10.7%. Take out petrol prices and currency, and that 10.7% becomes 7.2%.
Petrol is most of the gap. The company runs pumps at most of its 939 warehouses and sells below the servo down the road. When crude rises, the dollars going through those pumps rise too, and the comparable sales line rises with them.
The membership engine did the real work. Fee income was US$1.85 billion for the quarter and US$5.91 billion for the year, up 11%. Earnings came in at US$6.75 a share, 15 US cents of it a refund of tariffs already paid.
The fee increase announced in September 2024 has now almost finished flowing through the numbers. From here that line grows when Costco signs up members or moves them to the executive tier, rather than because the price went up two years ago.
The catch keep the adjusted figures. Total company comparable sales were 9.4% as reported and 6.7% once petrol and currency come out. Both are good numbers. Only one of them survives a cheaper barrel of oil. |
| DEALS |
Barry Diller walked away from MGM and the shares gave back 11%
MGM Resorts closed at US$33.69 on Thursday, down 10.99%, after People Incorporated withdrew its offer to take the casino group private at US$48.30 a share. The bid valued MGM at about US$18 billion when it landed in June.
Diller said the mix was not coming together the way he had hoped. He is chairman of People, the company formerly called IAC, and he told investors it would not pursue the purchase at this time. Part of the reason was the debt the deal would have loaded onto the buyer.
People keeps its stake of about 27%, so it remains the largest holder by a distance. MGM's board says the company will carry on as a standalone business.
Caesars Entertainment finished the session up 0.3%, so the selling stayed with MGM. The shares had carried a takeover premium since June, and Thursday took it out in one go.
Our view the buyer who knows this company best, with a quarter of it already owned, could not make US$48.30 work. I'd watch what People does with that holding, because a 27% shareholder who has just stopped buying sets the tone either way. |
Newsworthy numbers
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684,000 the annual rate of new home sales in America in August, up 6.4% on July. The median price fell 5.8% over the year to US$393,700, so builders are shifting houses by cutting prices. | | 4.6% Australia's unemployment rate in August, the highest since 2021, even though employers added 39,500 jobs against the 20,000 expected. More people went looking for work than found it. |
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197,000 new American jobless claims in the week to 19 September, down 1,000 on the week and below the 204,000 economists expected. The four-week average is 202,250. | | NZ$2.6 billion Fonterra's full-year profit, up 142%. About NZ$1.2 billion of that came from selling the Mainland consumer business, while underlying operating profit rose 23.6%. |
Worth a read
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01 | Each rate rise locks tens of thousands out of home ownership — James Graham at the University of Sydney and Avish Sharma at Northwestern find a quarter-point rise cuts home purchases by 5% immediately, and the effect runs for two years. Each rise keeps about 30,000 households out of ownership, and recovery takes over a decade. |
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02 | Americans fear AI will make the world worse, and love it anyway — Matthew Gault on a Gallup and Microsoft survey across 37 countries. A median of 81% know the tools exist and 43% use them daily, and the rich countries using them most are the ones most worried about them. |
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03 | Now at zoos, iPad penguins and Xbox-playing orangutans — Singdhi Sokpo on the business of animal boredom. Melbourne Zoo's orangutans play custom Xbox games, polar bears at the Maryland Zoo hunt a robotic arm holding scented food, and the researchers have started worrying about screen time. |
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04 | The first stellar stream found beyond the Milky Way — Julie Kiel Holm and Sarah Pearson pulled a faint ribbon of stars out of archival Hubble images, left behind by a cluster being torn apart in a galaxy called UGC9050-Dw1. Streams bend around dark matter, which makes this a way to weigh it in other galaxies. |
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05 | Still on its way to Cleveland — Mark and Betsy Blondin on nine months, 25,000 miles and one phone cord. A family drove around America in the days when getting online meant asking a stranger if you could borrow the wall socket. |
Wrapping up
The Reserve Bank of Australia decides on Tuesday at 2.30pm in Sydney. Earlier editions put that at 4.30pm in Auckland, and New Zealand's clocks go forward on Sunday, so it is 5.30pm here. American personal income and the PCE price index, the inflation measure the Federal Reserve targets, follow on Wednesday in New York.
Accenture reports before Thursday's US open, and new bookings are the line to find after they fell 3% in local currency last quarter. Australia's August consumer price index lands at 11.30am Sydney on Wednesday, the morning after the RBA votes.
USD/NZD is at 1.77, the kiwi at a fresh eleven-week low as higher American yields pulled money into the US dollar. USD/AUD is at 1.42.
Last sleep-in before the clocks steal an hour. Back tomorrow.