WHAT: Australian underlying inflation came in well above the RBA’s forecast at 4.3% over the year.
WHY: The pressure is broad-based rather than concentrated in a few items. Markets treat a hike to 4.85% on Tuesday as close to done.
WHAT: The ASX finished October up around 1%, with the banks rallying 6% and resources falling roughly 6%.
WHY: The local market’s lack of direct AI exposure was again a defence, with banks leading and resources dragging.
WHAT: Half way through the US reporting season it looks like earnings have grown by about 30%, beating the 29.1% expected, but the stocks that drove much of this fell.
WHY: Microsoft, which trimmed capex and stayed cash-flow positive, was flat. Alphabet fell almost 13% on falling search revenue and negative free cash flow. Spending alone is no longer rewarded.
WHAT: The Nasdaq fell 5.2% in October, its worst month since March 2025, while the S&P 500 lost 1.2% and the Dow rose 1.5%.
WHY: When institutions sold big tech, the money went into what had been discarded. Smaller company managers focused on quality and growth enjoyed double-digit gains off decent but unspectacular earnings, while stocks delivering 30% growth sold off.
WHAT: Central banks diverged sharply in October. The RBNZ held when a hike was 96% priced, the Bank of Canada hiked when few expected it, and the Fed delivered a dovish hold against 3.4% GDP.
WHY: Prices are rising in global trade and each central bank is navigating its own version of the same dilemma.
WHAT: Government bonds in the US, Australia and globally were up around 1-2% in October, with global infrastructure up about 9%.
WHY: Short-term rate expectations rose but long-term yields fell. Diversification earned its keep after a month in which it was widely questioned.
Listen to the Investsense podcast for weekly updates:
Apple: https://podcasts.apple.com/au/podcast/the-investsense-podcast/id1497076117
Spotify: https://open.spotify.com/show/3xR4Vjn77KBpVOj2N15r1p
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