Global markets

As we farewell the shores of 2025 and sail into 2026, equity investors seem to be shrugging off fears of an artificial intelligence (AI) bubble and are instead betting on a growing U.S. economy, rate cuts, and a broadening of bullish sentiment beyond the AI leaders.

The consensus view is the U.S. economy is settling into a rate of growth that is more modest than last year’s, avoids a recession and could surprise to the upside. Meanwhile, U.S. inflation and employment data are generally seen as supportive of a Federal Reserve rate cut, even though, according to some economists such as Torsten Slock, two-thirds of inflation seems to be demand-driven. continue…

by Roger Montgomery Posted in Economics, Global markets.

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Recently, the BBC interviewed Sundar Pichai, the CEO of Alphabet, Google’s parent. With all the claims the artificial intelligence (AI) boom is a bubble – something I have noted cannot be known until after the event – I wonder whether the BBC was motivated to go to the source. 

Describing the surge in AI funding as a remarkable period, yet one marked by certain unrealistic expectations, Pichai warned viewers of BBC News that no business would escape unscathed if the AI boom collapses. continue…

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

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The U.S. Federal Reserve (The Fed) has two main mandates: supporting employment and controlling inflation. Until Friday, it looked as if the two were almost perfectly balanced against each other, suggesting that the Fed would keep rates on hold in December.

Last week, Wall Street decided that a December cut was off the table. On Wednesday, the Chicago Mercantile Exchange (CME) Fedwatch futures index placed the probability of a cut at just 30 per cent.

Meanwhile, JPMorgan published a note predicting a January cut. Markets sold off dramatically, with the Nasdaq 2.74 per cent lower, and the S&P 500 losing 1.95 per cent last week. And there were of course, fears of a bubble in the artificial intelligence (AI) theme, which we have written about here copiously. continue…

by Roger Montgomery Posted in Economics, Global markets, Market commentary.

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Wall Street on Thursday experienced a stunning reversal in sentiment. Impressive results from the company spearheading the artificial intelligence (AI) revolution, Nvidia (NVDA), and a strong September jobs report initially drove the Nasdaq up more than two per cent.

On Wednesday, Nvidia’s CEO Jensen Huang had described demand for its Blackwell chips as “off the charts”, and dismissed fears of an AI bubble on the company’s earnings call.

Meanwhile, the U.S. economy added 119,000 jobs in September, meaning the labour market was in better shape than previously thought. continue…

by Roger Montgomery Posted in Companies, Global markets, Investing Education, Market commentary, Market Valuation.

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In this blog post, I (finally) take the focus off the artificial intelligence (AI) boom/bubble. Instead, I want to look at whether there are other factors investors should be considering when it comes to time to rebalance portfolios, and as 2025 concludes and 2026 commences.

First – and granted this one’s a bit of fun – the Santa Claus rally. Is there any evidence that such a thing exists? continue…

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

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Investors must understand that correctly predicting artificial intelligence (AI) technology will change the course of humanity, even if for the better, does not automatically translate to desirable investment returns.

General Purpose Technologies (GPT) of the past, such as the automobile, electricity, commercial flight, steam locomotion and TV, have all changed the course of human history and yet more than a thousand car manufacturers have disappeared from the U.S. and none exist today that are profitable and have not been bailed out by government or private equity. continue…

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

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Today on Ausbiz I joined Juliette Saly to discuss why artificial intelligence (AI) remains a powerful long-term thematic but is now exhibiting classic bubble warning signs. We need to question whether the exponential share-prices, circular vendor-financing deals, and the huge capital expenditure (CapEx) that we are seeing today, are sustainable.

While AI will undoubtedly transform the world, the economics underpinning today’s spending frenzy look increasingly stretched, with key leaders unable (or unwilling) to explain how trillion-dollar commitments will be funded. In times like these, disciplined rebalancing is a smart approach.

Watch the episode on Ausbiz here: What Nvidia could be telling us about an AI bubble continue…

by Roger Montgomery Posted in Global markets, Market commentary, TV Appearances.

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I joined Niav Owens on ABC Newcastle Mornings yesterday to discuss why cash is making a comeback – despite the rise of digital payments – and why it still plays an important role in budgeting, privacy, and accessibility. We also touched on the trillions being poured into artificial intelligence and whether those investments can truly deliver the returns investors expect.

You can listen to the full episode from 14:13 here: ABC Newcastle Mornings.  continue…

by Roger Montgomery Posted in Economics, Global markets, Radio.

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Not only are stock market valuations stretched, but on the metrics that are most reliable for predicting future returns, the U.S. market is at an all-time high. We can say that factually and therefore categorically.  It’s not a matter of opinion. 

It’s worth remembering to bring everything back to the data to avoid the influence of emotions. 

The important question then is not whether reducing your exposure and rebalancing portfolios results in a missed opportunity to maximise gains, but whether you’ll regret not doing that, and instead of retiring in two years, being forced to work for another six or seven. Indeed, and upon reflection, there will always be regret; the decision is about which regret is worse. Letting gains evaporate might be worse than missing out on a few more dollars.

This article was first published in The Australian on 05 November 2025. continue…

by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Global markets, In the Press, Market commentary.

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While bubble definitions abound, most fall into two camps: those that measure overvaluation and those that observe the behaviours and conditions that typically give rise to it.

The most straightforward definition of a bubble is asset prices climbing far above some measure of value, such as earnings, dividends, gross-value-added (GVA) or discounted cash flows. Robert Shiller’s famous CAPE ratio, which compares stock prices to long-term average earnings, and John Hussman’s market-cap-to-GVA, were designed to flag these distortions. continue…

by Roger Montgomery Posted in Global markets, Insightful Insights, Investing Education, Market commentary.

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