This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto along the way. This week markets were bullish, with the MSCI global index up 1.7% across the week, and up 0.3% just on Friday. Even the European STOXX 600 which fell 0.24% on the final trading day of the week managed another rise of 1.96% across the week, for a year-to-date gain of 8.82%. Australia’s ASX joined the party with a new high, and up 0.52% across the week.
But why, we should ask? Well, traders seem caught in the Trump announcement blizzard, though some are still asking is the market about to peak? Did DeepSeek mark the end of the AI bullish cycle? Are tariffs about to slash market gains? And is this the time for a Big-Short type of move?
Clearly no one knows – despite all the opinions out there among the talking heads. And frankly, if you are running your investments chasing these headlines, you will probably be in for a rude awakening when the market suddenly flips on its head, as it will at some point, because valuations do not support current levels, period. Meantime rules are being broken.
In the US, the fabled soft landing is morphing into a “no landing” as the 100 basis points worth of interest rate cuts from the Federal Reserve boosts the US economy, and keeps inflation sticky. Further Fed rate cuts are rapidly being priced out for the rest of the year, with just one more expected in December. Some economists are even muttering darkly about the possibility of a rate rise, if Donald Trump makes good on his moving feast of tariff threats. The latest of these would see the US place reciprocal tariffs on any country that currently taxes US goods
Australia’s ASX 200 rose 0.5% to a record high of 8,615.20 points, on gains across most heavyweight sectors. Local stocks were boosted by growing confidence that the RBA will likely cut interest rates by 25 basis points at a meeting next week, and kick off a shallow easing cycle on concerns over a slowing Australian economy. Though its not a done deal, as core inflation remained well above the central bank’s 2% to 3% target range after Government support for households pushed inflation down, at a cost, ahead of the upcoming election.
The RBA will also release new economic forecasts in an updated Statement on Monetary Policy. On Friday, RBA governor Michele Bullock will appear before the House of Representatives Standing Committee on Economics in Canberra. [She also will hold a press conference on Tuesday.]
Not to be outdone, across the ditch the Reserve Bank of New Zealand’s policymakers will meet on Wednesday, and they are expected to approve a third straight 50 basis point cut in the official cash rate.
In Crypto, Bitcoin is still muddling around the sub USD 100,000 level and was last at USD 97,576.
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