Market commentary

I read an ABC article, published recently, on inflation that suggests government spending is NOT responsible for it.

The article claims that blaming inflation on federal government outlays is a political “blame game” that oversimplifies complex economic realities. The piece argues that government spending alone doesn’t generate or mitigate inflation. Instead, it claims that budget deficits – the shortfall between revenue and outlays – are the true fiscal culprit, alongside major external factors.

It might sound like splitting hairs because, of course, a deficit occurs when government spending exceeds revenue. So… back to government spending. continue…

by Roger Montgomery Posted in Market commentary.

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I joined Jess Maguire on ABC Statewide Drive to discuss the Reserve Bank of Australia’s (RBA) warning about the ‘five horsemen’ threatening Australia’s $4.8 trillion superannuation sector. We explored the risks posed by geopolitics, the AI investment boom, market concentration, operational vulnerabilities and liquidity pressures as more Australians enter retirement. I also explained why it is important for Australians to understand where their super is invested and whether it aligns with their risk tolerance.

Listen here: ABC Statewide Drive  continue…

by Roger Montgomery Posted in Market commentary, Radio.

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As the blame game erupts within Republican ranks over the midterms rout, what was an extraordinary day in Washington saw a remarkable rally on Wall Street. The best day in 20-months for the Dow Jones Industrial Average, while tech stocks rose on the Nasdaq. But Elon musk’s Tesla and SpaceX took a hit. The billionaire spending hundreds of millions of dollars unsuccessfully backing Republicans in the midterms.

I believe the clean sweep by the Democrats raises questions about Starlink’s government grants and contracts, as well as those involving SpaceX and Tesla.

The oil price slump also appeared to boost global stock markets, but I remain unconvinced the optimism will last. While investors may expect a less antagonistic U.S. foreign policy towards the Middle East, Donald Trump remains a lame duck president with the power to issue executive orders that could continue to destabilise markets. continue…

by Roger Montgomery Posted in Economics, Editor's Pick, Feature Article, Global markets, Insightful Insights, Market commentary, Market Valuation, TV Appearances.

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According to the Australian Bureau of Statistics (ABS), our federal government employees received an average 7.2 per cent increase in the cash component of the wages bill to $43.8 billion, in Fiscal 2026.

Over the four years to June 2026, the cash salaries for our federal government employees have increased by 35.2 per cent, or a compound annual 7.8 per cent. Meanwhile, the annual change in employee numbers has increased by 14.7 per cent, or a compound annual 3.5 per cent. continue…

by David Buckland Posted in Economics, Market commentary.

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If you hold units in a broad global index fund, shares in a global index ETF, or have global exposure in your Australian super fund, chances are you own a piece of both Meta Platforms and Alphabet (Google). Indeed, these two tech giants have long been dominant positions in most global portfolios.

A structural shift is now taking place behind the scenes, and it directly affects their relative revenue trajectories and market valuations. continue…

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

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For nearly two years, it has been an article of faith that the artificial intelligence (AI) revolution would fund its own momentum, and any enterprise failing to allocate exorbitant amounts of capital risks irrelevance.

More recently, however, that narrative has frayed under the weight of escalating capital expenditure (capex), declining free cash flows, and growing investor fatigue, if not nervousness, about the circular financing, which has escalated again with chip makers Nvidia, AMD, and Broadcom recently acting as US$5 billion cornerstone investors in Meta Platforms’ US$25 billion stock sale. continue…

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

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I notice the Community and Public Service Sector Union (CPSU) representing 200,000 of our handsomely paid Commonwealth bureaucrats have rejected a three-year 9 per cent offer and instead have countered with a 15 per cent increase, in addition to many new conditions including a four-day working week trial, more annual leave and safeguards against artificial intelligence (AI) driven job losses. continue…

by David Buckland Posted in Market commentary.

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I previously reported on Matt Stoller’s incisive insights into the abuse of monopoly power. Last week he reported on U.S. delivery company DoorDash’s proposed US$17 billion takeover of grocery channel operator Instacart.

While the business press is largely treating this transaction as a routine play for market dominance in food and grocery delivery, Stoller argues that the merger represents something far more fundamental. In his view, the real story isn’t just app-based delivery; it’s an ongoing effort by major tech platforms to dismantle the classic employer-employee framework that defined 20th-century life. continue…

by Roger Montgomery Posted in Companies, Market commentary.

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Until now, Wall Street has been treating generative artificial intelligence (AI) as a license to justify virtually any valuation, no matter how lofty.

Aggressive spending today to dominate the architecture of tomorrow’s economy has led equity and bond investors to fall over themselves to avoid missing the next transformation of humanity.

However, over the last 24 hours, the market’s patience seems to have cracked. continue…

by Roger Montgomery Posted in Companies, Editor's Pick, Global markets, Insightful Insights, Market commentary.

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The artificial intelligence (AI) boom, or bubble, has captured so much investor attention that many have forgotten how many bubbles we’ve seen in the last decade.

And whether it was sudden liquidity shifts, low interest rates, technological enthusiasm, or structural market changes, these factors consistently combined to feed speculation and inflate asset markets.

When cheap capital or social euphoria flows faster than underlying fundamental earnings, valuations detach from reality. Most importantly, regardless of what drives the enthusiasm, whether it’s decentralised digital assets or meme stocks, each cycle saw valuations peak, and markets eventually corrected. continue…

by Roger Montgomery Posted in Economics, Insightful Insights, Manufacturing, Market commentary, Technology & Telecommunications.

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