Blog week ending, 23rd October 2026
Markets:
- Global equity markets remained volatile as the sell-off in AI-related stocks continued, while chipmakers recorded their longest losing streak since 2008, falling for eight consecutive sessions.
- Tech stocks rebounded mid-week before falling sharply again on Thursday, with the Nasdaq down more than 2% after results from Meta and Tesla failed to ease concerns over AI spending.
- The ASX 200 was a little weaker this week as banks and defensive stocks offset weakness in the mining sector.
- In local stock news, NextDC shares fell 41.7% to an eight-year low after the data centre operator said power-supply issues at its flagship Melbourne site would result in an estimated $140 million in lost earnings. The company is reducing capital expenditure and considering selling development sites.
- Takeover activity picked up, with Challenger shares jumping more than 19% after receiving a $7.9 billion non-binding takeover offer from TAL Dai-ichi, while Cleanaway shares rose more than 20% after a $9.4 billion takeover bid from private equity firm EQT.
- CSL has appointed Deborah Waterhouse as CEO and Managing Director from 1 February 2027. She is currently the CEO of GSK’s HIV business. Interim CEO Gordon Naylor will remain in the role until then to manage the transition before returning to the board.
- BHP shares fell almost 5% after its September quarter copper production declined 19% to around 400,000 tonnes, well below analyst expectations.
- Ampol shares fell as much as 7% after the company cut its fourth-quarter output forecast for higher-value products at its Lytton refinery following the decision to bring forward maintenance work. Refining performance continued to benefit from elevated margins, with Lytton’s margins more than doubling in the third quarter compared with a year earlier.
- US Treasury yields eased over the week, with the 10-year yield falling to around 5.0% as oil prices and expectations for further Fed rate hikes fluctuated. In Europe, France’s 10-year bond yield rose towards 4.85%, close to its highest level in more than two decades, amid violent protests and political gridlock.
- Stress in credit markets linked to the AI build-out continued. Companies have delayed more than US$5 billion of US and European bond and loan sales during October, the most this year, amid rising rates, inflation concerns and growing doubts over the AI boom.
- Brent crude rose above US$110 a barrel for the first time since May, reaching more than US$111 on Thursday after the US ordered diplomats to leave Saudi Arabia amid continuing Houthi attacks. Iran also said two tankers were set ablaze in the Strait of Hormuz after hitting mines laid by its forces.
- The Aussie dollar rose back above US70 cents, reaching a three-week high following hawkish comments from RBA Deputy Governor Andrew Hauser.
Economy:
- RBA Deputy Governor Andrew Hauser said the inflation outlook was materially worse than the central bank had forecast, warning that businesses were beginning to view 3.5% inflation as the new normal. His comments increased market expectations of a rate hike at the RBA’s 3 November meeting, with next week’s September quarter CPI data now seen as critical.
- CommBank data showed Australian household spending growth had remained stable in recent months, despite high fuel prices and four rate hikes this year. However, spending growth was expected to slow in coming months as pressure on household incomes builds.
- US housing starts fell 5.2% in September to an annualised 1.22 million, their lowest level in four months and below all estimates, while pending home sales fell 7.3% to a record low as high mortgage rates continued to weigh on demand.
- US import prices rose 1.1% in September, well above expectations of 0.8%, taking annual import price inflation to 8.1%. Fed Chair Warsh declined to signal the likely outcome of the 27–28 October meeting, with markets scaling back expectations of an October rate hike.
- UK annual inflation rose to 3.5% in September from 3.1% in August, its highest level in almost a year and above expectations of 3.4%, driven by higher fuel prices. Core inflation rose to 2.8% from 2.6%, adding to expectations of a Bank of England rate hike.
- Eurozone annual inflation was confirmed at 3.8% in September, its highest level since September 2023. ECB officials signalled that further tightening may be needed, with a December rate hike widely expected, while German producer price inflation rose to 6.7%, its highest level since March 2023.
- Bank of Japan Governor Kazuo Ueda said the central bank would not tolerate an overshoot of its 2% inflation target and would continue to raise rates ahead of its 29–30 October meeting. Japan’s exports rose 16.7% in September from a year earlier, below expectations of 20.1%.
- China’s economy grew 4.5% in the September quarter compared with a year earlier, above expectations of 4.4% and up from 4.3% in the June quarter, supported by strong technology exports and recent stimulus measures. Retail sales growth also beat expectations, although fixed-asset investment fell 7.2% over the first nine months of the year.
Politics:
- The US ordered diplomats to leave Saudi Arabia amid continued Houthi attacks on the kingdom, while Iranian President Pezeshkian said Washington could not expect meaningful dialogue while it continued to blockade and threaten Iran.
- President Trump waived Russian energy tariffs and sanctions mandated under legislation he signed last month as part of his push to lower diesel prices ahead of the midterm elections. The move prompted US lawmakers to introduce a bill aimed at blocking the deal. Ukrainian President Zelenskyy accused Trump of pressuring Kyiv to surrender to Russia.
- French authorities imposed curfews in parts of Paris, Lille and Nice following a weekend of riots and looting linked to nationwide anti-government protests, adding to pressure on a government already struggling to pass its budget. Similar demonstrations have also spread to other European countries.
This information is general advice and does not take account of investors’ objectives, financial situation or needs. Before acting on this general advice, investors should therefore consider the appropriateness of the advice having regard to their objectives, financial situation or needs.
Written by Christopher Lioutas
Chairman – Harbourside Investment Management
