Blog week ending, 30th October 2026
Markets:
- Local and global equity markets fared better this week, with investor sentiment boosted by the US Fed’s hold on rates and Anthropic’s IPO filing reviving the A.I. trade following recent market jitters.
- Alphabet shares fell 13% on Thursday, their largest post-earnings fall on record, after an earnings miss and negative free cash flow overshadowed a doubling in Google Cloud revenue.
- A.I. company Anthropic publicly filed for its IPO, planning to list on the Nasdaq, with first-half revenue of US$16.3 billion and a net loss of US$80.7 billion, mostly from accounting charges.
- Australian equities rose strongly this week, led by a rebound in banks and miners, with the financials sector reaching its highest level since August. Markets like Australia, which have less exposure to A.I. stocks, can benefit when A.I. sentiment sours, as seen in October.
- In local stock news, Challenger’s board rejected TAL Dai-ichi Life’s $11.80 per share takeover offer, saying it could not recommend the offer given the company’s value and prospects, although it intends to engage with the Japanese insurer to see whether a recommendable proposal can be reached.
- NextDC shares recovered some of the previous week’s losses after the data centre operator released a balance sheet update to reassure investors that its debt position was secure and announced a board shake-up and cuts to its chief executive’s bonuses.
- Wesfarmers, JB Hi-Fi and Super Retail Group all flagged slowing sales growth as higher interest rates and cost-of-living pressures continued to weigh on discretionary spending.
- The US 10-year Treasury yield remained around 5.0% following the Fed decision. The UK 10-year gilt yield fell to around 5.3%, its lowest level in over a month following the Budget, while French government bond yields remained near their highest levels since 2002. Moody’s maintained France’s Aa3 credit rating with a negative outlook.
- Brent crude reached a six-month high of almost US$117 a barrel at the end of last week before easing to around US$109-111 during the week amid diplomatic efforts to end the Iran war, offset by reports that the US was preparing for renewed strikes on Iran after the midterm elections.
Economy:
- Australia’s annual CPI inflation rose to 4.3% in September from 4.0% in August, above expectations of 4.2% and at its highest level since March, driven by a 23.6% rise in fuel prices. Markets now see around an 80% chance of a rate hike on Melbourne Cup Day.
- RBA Assistant Governor Sarah Hunter said the central bank was “not quite done” tackling inflation, adding to expectations of a fifth rate hike this year. Higher rates continue to weigh on housing, with the combined capital city auction clearance rate falling below 48% compared with around 67% a year earlier.
- The US Federal Reserve held rates at 3.75%–4.00% in a 10–2 vote, with two officials favouring a 0.25% hike. Markets are now pricing in a high probability of a hike in December. Fed Chair Kevin Warsh also announced that the Fed will reduce the number of meetings at which it votes on interest rates from 2027.
- The US economy grew at an annualised rate of 3.4% in the September quarter, its fastest pace in a year and above expectations of 3.2%, driven by a 19.4% surge in private investment amid strong A.I. spending. Core PCE inflation rose to 3.1% in September, its highest level since May.
- The ECB held its deposit rate at 2.5% but signalled that a December rate hike remains likely. President Christine Lagarde announced that she would step down in February 2027, nine months before the end of her term.
- Eurozone business activity slowed, with the composite PMI falling to a four-month low of 51.9 in October. In contrast, Germany’s Ifo business climate index rose to its highest level since May 2023, while French consumer confidence fell to its lowest level since June 2013.
- UK Chancellor John Healey reaffirmed the government’s commitment to its fiscal rules in his first Budget, with the Office for Budget Responsibility estimating fiscal headroom of £15 billion, in line with expectations. The OBR cut its 2027 growth forecast to 1.0% from 1.6%, citing the impact of the Iran war.
- Japan’s services producer price inflation rose to 3.7% in September, its highest level since June 2024. The Bank of Japan concludes its policy meeting today (Friday), with no economists in a Bloomberg survey expecting a rate hike and most tipping the next increase in December.
- China’s industrial profits rose 14.4% in September compared with a year earlier, accelerating sharply from 4.2% in August and well above expectations, supported by higher energy prices and strong demand for A.I.-related hardware.
Politics:
- US officials reportedly told several Gulf states to prepare for a short but intense military campaign against Iran following the 3 November midterm elections, with the US deploying a third aircraft carrier strike group towards the Persian Gulf. Qatar presented Iran with a draft proposal to end the war, although a senior Iranian official dismissed it.
- Israel’s election appeared deadlocked, with exit polls showing Prime Minister Netanyahu’s bloc running neck and neck with opposition leader Gadi Eisenkot’s bloc, pointing to a setback for Netanyahu’s coalition and potentially weeks of negotiations to form a government.
- Brazilian President Lula won a surprise fourth term after coming from behind in the election, sending the Brazilian currency down more than 10% and the country’s benchmark stock index down more than 17%. Flávio Bolsonaro subsequently called for the result to be annulled.
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
