Editor’s Pick
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The AI funding window is closing: slowing revenue, IPO fails, and a bankrupt OpenAI
Roger Montgomery
October 21, 2026
For two years, Silicon Valley and global equity markets agreed that artificial intelligence (AI) is an uncapped frontier where aggressive capital deployment and unchecked spending would automatically yield exponential returns. Or, perhaps, equity markets believed the spin coming out of Silicon Valley.
Whichever scenario is true, reported operating results over the past week have confirmed the shift in sentiment toward AI.
Slowing revenue, public market pullbacks, and fluid enterprise strategies suggest the market’s appetite for unconstrained AI spending is finally hitting a ceiling. Investors have well and truly moved past the honeymoon phase and are demanding proof of a sustainable economic model. continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Insightful Insights, Manufacturing, Market commentary, Market Valuation, Technology & Telecommunications.
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Give us back our confidence!
David Buckland
October 21, 2026
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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“Australian residential property prices never fall”
David Buckland
October 15, 2026
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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ASX: From System Error to System Upgrade
Sean Sequeira
October 13, 2026
ASX (ASX:ASX) is a high-quality market infrastructure business with strong competitive advantages across listings, cash equities, derivatives, clearing and settlement and data services. Historically, these businesses generated attractive margins and relatively resilient earnings but the investment case deteriorated as years of underinvestment in technology became increasingly apparent. The most visible failure was the original CHESS (Clearing House Electronic Subregister System) replacement program, which was abandoned in 2022 after significant delays and write-offs, while subsequent operational incidents and regulatory scrutiny further damaged confidence in management and execution. The company also went through considerable leadership turnover with the most recent appointment being ASX’s third CEO in relatively quick succession. continue…
by Sean Sequeira Posted in Editor's Pick, Feature Article, Financial Services, Market commentary, Market Valuation, Popular, Stocks We Like.
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MEDIA
The Australian – High interest rates and bond yields threaten global sharemarket rally
Roger Montgomery
October 12, 2026
In my article for The Australian, I explore why global bond yields continue to rise while equity markets remain largely unfazed. From persistent inflation and geopolitical tensions to growing government debt and artificial intelligence (AI) infrastructure spending, several forces are keeping interest rates elevated. I also examine whether expectations of AI-driven earnings growth can continue to support share prices, or whether higher borrowing costs will eventually weigh on equity valuations.
Download the article here: High interest rates and bond yields threaten global sharemarket rally continue…by Roger Montgomery Posted in Economics, Editor's Pick, In the Press, Insightful Insights, Market commentary, Market Valuation.
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WHITEPAPER
THE PROPERTY RUG PULL
Discover how proposed changes to negative gearing, Capital Gains Tax and holiday home tax rules could reshape property investing, and why investors may consider private credit as property returns become less certain and tax advantages diminish.
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Sovereign debt yields continue to climb – is a debt crisis on the cards?
David Buckland
October 12, 2026
In the past six years, French Government ten-year bond yield has jumped from negative 0.3 per cent to 4.9 per cent, the highest level in 24 years. Investors are starting to differentiate between each euro-denominated country with German and Dutch ten-year bonds yielding 3.5 per cent and 3.6 per cent, respectively. Meanwhile, Greek and Italian ten-year bonds yield 4.55 per cent and 4.65 per cent, respectively, indicating potential contagion as confidence appears to be in short supply. continue…
by David Buckland Posted in Economics, Editor's Pick, Feature Article, Global markets, Insightful Insights, Investing Education, Market commentary.
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Generational market top?
Roger Montgomery
October 9, 2026
Independent economic research and investment strategy firm Variant Perception (VP) has shared its latest market musings, and the phrase “generational equity top” got a run.
The equal-weighted Value Line Arithmetic Index is drawing down from its August high, while the Nasdaq 100 is rallying… continue…
by Roger Montgomery Posted in Editor's Pick, Global markets, Insightful Insights, Market commentary.
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Silver lining in bond market carnage
Roger Montgomery
October 8, 2026
For decades, the 60/40 Balanced Portfolio was zealously and even religiously adhered to. The fixed income component was the dependable anchor, providing a steady yield, protection against stock market volatility, while allowing investors to sleep soundly at night.
More recently, bond returns have given sleeping investors a rude awakening.
U.S. analyst Ben Carlson recently highlighted this shift, pointing out that modern bondholders have endured a catastrophe, describing the market as “…the most brutal bond market in modern finance history,” adding, “It’s no wonder bonds are the most hated asset class in the world.” continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Feature Article, Global markets, Insightful Insights, Investing Education, Market commentary.
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The Fallacy of Composition
Roger Montgomery
October 7, 2026
In the stock market, equity analysts are typically bottom-up researchers. That means they start their analysis of an individual company with specific financial metrics and fundamentals, rather than macroeconomic trends or overall industry outlooks.
Instead of starting with Gross Domestic Product (GDP) growth, interest rates, or sector tailwinds, a bottom-up analyst focuses on a company’s internal strengths, business model, and valuation.
A problem arises because modelling a specific company using the bottom-up approach occurs in a vacuum.
Analyst A assumes Company A will take market share away from Company B. Analyst B assumes Company B will hold its market share and grow sales by 10 per cent. Analyst C assumes Company C will benefit from lower commodity prices, while Analyst D assumes the commodity producer will raise prices. continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Energy / Resources, Global markets, Insightful Insights, Market commentary.
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The runway for equities – are markets settling into a new pace?
Roger Montgomery
October 6, 2026
The narrative surrounding global equities is subtly shifting. Once dominated by momentum-driven optimism, especially for artificial intelligence (AI), today’s market discussions instead focus on structural frictions.
The most bullish equity strategist of note is U.S. researcher Edward Yardeni, whose Fabulous Earnings Momentum (FEMO) thesis has driven his estimate for the S&P500 to reach 8,400 – 10 per cent higher than where we are today. Originally, this target was slated for the end of 2026, but now Yardeni has moved it to the middle of next year.
He notes the recalibration isn’t a reassessment of FEMO, but an acknowledgement of macro headwinds that limit immediate price to earnings (P/E) multiple expansion. continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Global markets, Insightful Insights, Investing Education, Market commentary, Popular.
