Market commentary

In U.S. trading overnight, Nvidia achieved a market capitalisation of US$5 trillion, after which Microsoft, Meta Platforms and Google’s parent company Alphabet delivered their September quarter earnings.

The results were impressive, as expected. Microsoft reported Q1 revenue of US$77.67 billion, beating estimates of US$75.33 billion, with earnings per share (EPS) of US$4.13, surpassing the US$3.67 forecast. continue…

by Roger Montgomery Posted in Market commentary.

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Fourteen years ago, in 2011, a commodity boom in iron ore saw BHP’s share price hit $40 for the first time. It was the 8^th of April 2011. There was great excitement, surrounding Australia being the ‘lucky’ country yet again. Peter Richardson, Morgan Stanley’s then global metals chief economist, put forward a strong investment case for the “crucial” steelmaking commodity.

We will see Morgan Stanley again soon.

By contrast, on April 11 that year we published a blog Will China demand Iron… or…?, where we wrote that iron ore prices would henceforth decline, ending the commodity boom and causing buoyant share prices to fall. continue…

by Roger Montgomery Posted in Market commentary.

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Earlier this month, Nvidia – the company at the heart of the artificial intelligence (AI) boom – announced it had agreed to invest up to US$100 billion in OpenAI to help the Large Language Model (LLM)-maker fund its data centre build out. In turn, OpenAI agreed to fill those data centres with Nvidia Chips.

If it sounds odd, it is. That’s because it’s akin to convincing Nick Scali to buy you a house if you agree to fill it with Nick Scali’s furniture.

In fact, the Nvidia/OpenAI deal was immediately criticised for being ‘circular’. continue…

by Roger Montgomery Posted in Market commentary.

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On this week’s video insight, I discuss how two seemingly separate developments –Jerome Powell signalling an end to quantitative tightening (QT) and surging U.S. subprime auto loan delinquencies – may together warn that the equity bull market is running on fumes. Liquidity support could soon become more targeted, banks may tighten lending, and stretched equity valuations could face pressure. Now is a prudent time for investors to rebalance: rotating profits from high-growth names into defensives, holding some cash for volatility, and perhaps exploring adding uncorrelated assets like private credit or arbitrage funds to their portfolios. continue…

by Roger Montgomery Posted in Market commentary, Video Insights.

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As headlines mount, I wonder whether the nascent disorder in U.S. subprime auto loans becomes a bigger fissure into which a stretched stock market could fall. With stock valuations hovering at historically stretched levels, even a hint of a macroeconomic or financial fracture could precipitate a correction. continue…

by Roger Montgomery Posted in Market commentary.

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There are many consequences of gold’s vertical ascent to new all-time highs. One of course, is the queues of first-time buyers forming outside gold bullion stores around the world. A more subtle consequence, however, is the emergence of arguments that justify the rally and inspire those queues.

Throughout history, gold has functioned as both a store of value and a safe haven during times of monetary, political, and economic upheaval. Unlike fiat currencies or the assets of specific corporations, gold’s value isn’t linked to the fortunes of any one nation’s economy. This quality renders it especially attractive during crises such as wars, rising inflation, financial downturns, and global health emergencies. Its reputation for stability, its widespread recognition and universal and historical acceptability, has positioned gold as a go-to hedge against systemic threats and the erosion of currency value. continue…

by Roger Montgomery Posted in Market commentary.

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Over the last month, the U.S. stock market has shown signs of shifting priorities. That’s because, surprisingly, the top-performing sectors weren’t the usual suspects. They weren’t the high-flying artificial intelligence (AI), technology, or defence industries, but the more stable and defensive healthcare, utilities, and gold sectors. These sectors, seen as safe havens, suggest that at least some investors are bracing for turbulence.

It certainly raises the question: Are cracks forming in this bull market? continue…

by Roger Montgomery Posted in 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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I joined Phil Clark on ABC Nightlife yesterday to discuss what’s driving today’s market. Falling inflation, steady growth, and record central-bank liquidity continue to fuel this bull run. But with artificial intelligence (AI) spending soaring, returns need to justify valuations. We also discussed the rising demand for gold, with many investors viewing it as a hedge against uncertainty. Although physical gold might be nice to look at, exchange-traded options may offer more efficient exposure for investors.

Perhaps considering alternative asset classes that are uncorrelated to public markets such as private credit or arbitrage strategies may help to manage risk in these uncertain times. You can listen to the full episode here: Nightlife Finance with Roger Montgomery. continue…

by Roger Montgomery Posted in Insightful Insights, Market commentary, Radio.

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During a boom, warnings of bubbles and crashes are swept under a rug woven with proclamations such as “we’ve entered a multi-year bull market” and “there’s so much money on the sidelines waiting to invest”.

This article was first published in The Australian on 06 October 2025. continue…

by Roger Montgomery Posted in In the Press, Insightful Insights, Market commentary.

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