BCA Research has published its latest equity strategy report authored by Noah Weisberger, Yifei Liu, and Allen Li, titled Cerberus Paribus: The Three-Headed Threat To Equity Valuations (Bonds, Earnings, and IPOs).

BCA’s principal stance on United States equities remains “constructive”, however the report warns about the shifting mechanics driving the market. Specifically, the path toward their S&P 500 8,100 year-end target is transitioning from a regime fuelled by price-to-earnings (P/E) multiple expansion to one increasingly reliant on fundamental earnings growth. Continue…

by Roger Montgomery Posted in Economics, Market commentary.

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I just returned from an inspiring presentation on artificial intelligence (AI) by Alan Finkel AO, Australia’s Chief Scientist from 2016 to 2020, only to read that the Reserve Bank of Australia’s (RBA) 2,200 staff had rejected a 9.5 per cent pay rise, over three years. The proposal included a 3.5 per cent increase in the first year, followed by a 3.0 per cent increase in each of the next two years. 

Together with the Head Office renovation, now expected to cost $1.2 billion, this seems like a “joke”, particularly when we consider that total RBA staff numbers have increased by around 800, or 57 per cent, over the past five years. And this doesn’t include the RBA’s fiscal 2025/26 accounting loss of A$8.5 billion on the unrealized value of its government bond and foreign exchange portfolio. Continue…

by David Buckland Posted in Economics, Editor's Pick, Insightful Insights, Market commentary.

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For the last twenty years, Silicon Valley – technology’s epicentre  – enjoyed a relatively frictionless relationship with the rest of society. We celebrated its invention and innovation, the high-paying jobs it created and the investment returns.

But after twenty years, the marriage appears to be dissolving.

In Robert Bryce’s 9½-minute documentary, The Data Centre Backlash, a grassroots anti-data-centre movement is shown rising worldwide, from Texas to Ireland.

The doco shows local communities waking up to the unquenchable demands that generative AI and hyper-scale cloud computing place on local water and electricity grids – and they’re pushing back successfully. Continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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Everyone seems to have jumped on the carcass of the Firmus Initial Public Offering (IPO) to dissect what went wrong. Since it was a local company listing on the domestic market, it’s understandable Australian news outlets and financial commentators have shown so much interest. 

But while local commentators and media outlets continue to report on what would have become Australia’s largest-ever float, U.S. commentators are also responding. The difference is some are reading the pulled IPO through a far more ominous lens, one that says the artificial intelligence (AI) bubble is ending. Continue…

by Roger Montgomery Posted in Global markets, Market commentary, Market Valuation, Technology & Telecommunications.

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This week on ABC Statewide Drive, I discussed the recent sell-off in AI stocks and whether the AI bubble is beginning to burst. We explored how rising bond yields, growing debt burdens and uncertainty around profitability are putting pressure on the sector. While AI has the potential to transform industries, the current investment boom may face further challenges before more sustainable opportunities emerge.

Tune in here: ABC Statewide Drive 

by Roger Montgomery Posted in Economics, Market commentary, Radio.

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I can’t tell you how many times I have heard the expression, “Australian residential Property prices never fall”.  Admittedly these “experts” have enjoyed an enormous 40-odd year bull market. However, they don’t believe that asset prices can be cyclical, and they likely missed the 1993 London headline which read “One million homes in negative equity”.

As Australia’s unemployment rate hits 4.7 per cent, a five year high, and inflation reaches 4.0 per cent in the 12 months to August 2026, it appears a period of stagflation – slow or negative real economic growth per capita, higher unemployment and persistent inflation – will likely be with us for the foreseeable future. Continue…

by David Buckland Posted in Editor's Pick, Feature Article, Insightful Insights, Market commentary, Popular, Property.

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If only to arm you with arguments you might not be apprised of, it’s worth repeating artificial intelligence (AI) critic and author, Ed Zitron’s most recent warnings about the AI bubble, starting with a reference to the potential insolvency of OpenAI and Anthropic: Continue…

by Roger Montgomery Posted in Economics, Insightful Insights, Market commentary, Market Valuation.

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Daily stock market commentary is replete with warnings of storm clouds forming over global equity markets. But major indices are registering all-time highs with daily, boring monotony, and those dark clouds seem in no imminent danger of producing rain, let alone a storm.

So are the bearish experts wrong?

A healthy, resilient bull market is typically broad-based, with companies across diverse sectors participating in the upward momentum. What we have today is the precise opposite. According to a widely circulated Goldman Sachs report, equity market breadth has plummeted to levels unseen since the dot-com bubble. Continue…

by Roger Montgomery Posted in Economics, Market commentary.

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