Devon Funds Morning Note - 08 September 2026

Tuesday 8th September 2026

Champagne & Copper

Global

US equities took a break for Labor Day, while futures and commodity markets set the tone in thin holiday trading. S&P 500 futures were modestly lower, down 0.2%, while Nasdaq futures gained 0.2%, indicating a cautious but mixed risk backdrop ahead of the US market reopening.

In the Middle East, no renewed military action was reported over the past 24 hours, but Iran has flagged plans to establish a restricted maritime zone outside the Strait of Hormuz. Details remain unclear, including its boundaries and enforcement arrangements, although Tehran has warned that vessels seeking to transit the Strait could face sanctions.

Trade policy returned to focus, with Canada’s retaliatory tariffs on selected US-origin goods taking effect from 8 September. The measures apply rates of 15%, 25% and 50% across roughly C$27.6 billion of imports, including steel, aluminium, dairy, appliances, agricultural equipment, pulp and paper, plastics and electronics. While the measures may have political implications for US industrial states, their more immediate market relevance is the potential for renewed North American trade friction and sector-specific cost pressure.

In commodities, Copper was a notable outperformer, rising 0.8% to a new record on the London Metal Exchange at ~US$6.58/lb. Copper is currently reflecting a tight physical-market backdrop, supported by robust demand and ongoing supply disruptions. In contrast, expectations of broader US tariffs on refined copper have added to global inventory dislocation and price volatility. Further reinforcing the supply challenge, Chilean trade data fell: copper exports from the world’s largest producer were valued at US$4.62 billion in August, down 14% month-on-month and 3.2% year-on-year despite average copper prices being more than 40% higher than a year earlier.

Elsewhere, Prospects for a near-term Russia–Ukraine ceasefire appear limited after President Putin reportedly maintained his intention to pursue the war following talks with US envoys Steve Witkoff and Jared Kushner. Kremlin-linked sources indicated that Moscow considers capturing the remainder of Donetsk a precondition for a settlement and believes it can achieve that objective within roughly six months. Independent battlefield analysis disputes that timeline, however, arguing Russia’s current rate of advance would make such an outcome far more difficult.

Separately, France is facing one of its weakest wine harvests in decades after severe heatwaves and drought damaged vineyards. Champagne output is forecast to fall to around 1.34 million hectolitres, approximately 48% below 2025, while total French wine production is expected to decline 6% year-on-year to about 34 million hectolitres,17% below its five-year average. The supply shock is likely to support prices for affected wine categories, although its direct macroeconomic and inflation impact should be limited.

New Zealand

The NZX 50 started the week on a softer note, retreating 0.2%. Fisher & Paykel weighed on the index, falling 1.2%, with other notable detractors including Vulcan Steel, down 4.6%, Comvita, down 4.2%, Pacific Edge, down 3.9%, and Hallenstein Glasson, down 2.0%. Rate-sensitive property names also weakened as interest-rate expectations remained a headwind: Stride Property fell 2.6%, Precinct Properties 1.5%, and Property for Industry and Goodman Property Trust each declined 1.3%.

In market news, Port of Tauranga has received fast-track conditional approval for its Stella Passage development, a major expansion intended to relieve capacity constraints at New Zealand’s largest port. The project will extend the Sulphur Point container berth by 385 metres in two stages and the Mount Maunganui wharves by 315 metres. It also includes reclaiming land behind the new wharves, converting existing cargo-storage areas, dredging approximately 1.5 million cubic metres from Stella Passage, and enabling additional container cranes at Sulphur Point. Strategically, the approval provides a pathway for Port of Tauranga to accommodate larger vessels and almost double its cargo-handling from a terminal that is effectively at capacity.

Elsewhere, NZ residential property values continued to soften over winter, with the QV House Price Index showing the national average dwelling value fell 1.9% over the three months to the end of August, to NZ$894,977. The largest quarterly decline in two years, leaving values 1.7% lower year-to-date and 1.3% below their level a year earlier.

The decline was broad-based. Average values fell across all major urban areas except Queenstown, which rose 1.0%, and Invercargill and Timaru, which each edged 0.1% higher. Gisborne recorded the sharpest fall among the main urban centres, down 5.0% over the quarter, followed by Greymouth (-3.7%), Wellington City (-3.5%), Hastings (-2.9%) and Auckland (-2.7%).

Australia

Australian equities were broadly unchanged, with the ASX 200 edging 0.1% higher as gains in Energy and Materials offset a sharp decline in Technology. The session reflected an increasingly bifurcated market: resource names benefited from rising commodity prices and heightened Middle East risk, while long-duration growth stocks came under pressure amid concerns that global interest rates may stay higher for longer.

Energy was the strongest sector, rising 1.8% as crude moved towards US$100/bbl following continued US–Iran exchanges around the Strait of Hormuz. Coal names also outperformed, with Whitehaven Coal up 7.0% following a broker upgrade. Tamboran Resources gained 9.1% after commencing first gas sales from the Beetaloo Basin, reinforcing investor appetite for near-term domestic gas exposure.

Materials added 0.4%, supported by iron ore prices reaching monthly highs above US$100/t: BHP gained 1.1%, Fortescue rose 3.2%, and Rio Tinto advanced 0.8%. Lithium stocks, however, fell after Australian spodumene prices fell 7% on Friday, with Liontown down 3.3%, Pilbara Minerals off 3.1% and IGO down 0.8%.

Industrials edged up 0.2%, supported by a 2.8% gain in Worley after the company secured the EPCM contract for BHP’s Olympic Dam and Carrapateena expansion projects, estimated to add approximately $650 million to backlog. Conversely, Technology was the market’s main detractor, declining 2.6% in line with weaker offshore peers and heightened interest-rate concerns. Xero fell 3.9%, and WiseTech Global declined 3.8%, while Healthcare dropped 0.8%, led by Pro Medicus, down 3.1% as it traded ex-dividend.

At the stock level, Ingenia Communities surged 14.8% after rejecting an unsolicited A$4.75-per-security cash approach from Warburg Pincus, judging it not to be in shareholders’ best interests. Austal added 2.1% after confirming preliminary discussions with Wildcat Infra, although the company stressed that no formal proposal or binding offer has been received.

Comments from our readers

No comments yet