Virtually Live: 21 October 2026
Oct 21, 2026 · 14 min · 7 segments
Oct 21, 2026 · 14 min · 7 segments
Pretty decent sell-off in AI exposed names and obviously they had run very hot.
Certainly it's not anything precipitous yet, but whether we'll see obviously a turnaround in the short term or it'll... or some more heat will come out we will see um obviously not a huge extrapolation for the local market here still very much dominated by resources and and the banks and you know the market's still sold off but uh certainly nothing again nothing too big and nothing at least to get me too excited given what i believe are you know pretty significant headwinds for the market um in a very difficult economic environment One interesting thing, though, I will say is we've seemingly seen longer-term bond yields in the US and Australia peak.
Kind of an interesting inflection point came in the US where they announced pretty hot inflation data.
And yeah, I guess logically you would think that they would do the opposite, but that kind of marked the day that looks like it was the short-term peak at least.
Lower yields, of course, will be a huge relief if that were to be able to be sustained, but obviously inflation remains the big factor here and whether obviously we're likely to see that inflation starts to head lower.
Certainly in Australia, inflation numbers remain really resilient, but we are also no doubt seeing a softer labour market.
Obviously, it very much feels like a difficult environment and from a labour market perspective, I'm not surprised at all to see that turning out to be weaker than expected.
whether that's partly an AI story or my view probably more likely an economic issue.
But the RBA has talked about the importance of obviously reduced demand in the economy and obviously capacity being too tight.
So it is unfortunately what is needed I think to get inflation back to target.
um what else uh we're seeing more and more of the kind of the corporate activity um side of the market you know really accelerate um new a couple new bids um signed uh on monday which we we've bought in the event portfolio which is great um and a few new kind of emerging as well challenger now looks like they're going to sign a deal with their major shareholder um And this continues to happen.
I think a major one, of course, is the kind of collapse of the active funds management industry and move, obviously, for a lot of investors into ETFs, which typically... allocate obviously towards those names that have big index weights.
It's kind of compounding the problem where we're seeing the big cap stocks which are mostly growing at very, very low levels given their maturities as businesses and high dividend yields and inability to obviously invest in the business and make acquisitions because of competitive concerns and so on they are getting more and more expensive but at the other end of the of the market we're seeing valuations really suffer and that's obviously attracting you know takeover interest from mostly from, obviously, private capital, which has longer-term horizons and, you know, the ability to certainly look through short-term weakness in operating performance.
And what has come to market has been pretty small and certainly a fraction of what's leaving the ASX.
We want a healthy stock exchange because it is obviously always a good exit opportunity or a source of capital for companies.
Pretty decent sell-off in AI exposed names and obviously they had run very hot.
Certainly it's not anything precipitous yet, but whether we'll see obviously a turnaround in the short term or it'll... or some more heat will come out we will see um obviously not a huge extrapolation for the local market here still very much dominated by resources and and the banks and you know the market's still sold off but uh certainly nothing again nothing too big and nothing at least to get me too excited given what i believe are you know pretty significant headwinds for the market um in a very difficult economic environment One interesting thing, though, I will say is we've seemingly seen longer-term bond yields in the US and Australia peak.
Kind of an interesting inflection point came in the US where they announced pretty hot inflation data.
And yeah, I guess logically you would think that they would do the opposite, but that kind of marked the day that looks like it was the short-term peak at least.
Lower yields, of course, will be a huge relief if that were to be able to be sustained, but obviously inflation remains the big factor here and whether obviously we're likely to see that inflation starts to head lower.
Certainly in Australia, inflation numbers remain really resilient, but we are also no doubt seeing a softer labour market.
Obviously, it very much feels like a difficult environment and from a labour market perspective, I'm not surprised at all to see that turning out to be weaker than expected.
whether that's partly an AI story or my view probably more likely an economic issue.
But the RBA has talked about the importance of obviously reduced demand in the economy and obviously capacity being too tight.
So it is unfortunately what is needed I think to get inflation back to target.
um what else uh we're seeing more and more of the kind of the corporate activity um side of the market you know really accelerate um new a couple new bids um signed uh on monday which we we've bought in the event portfolio which is great um and a few new kind of emerging as well challenger now looks like they're going to sign a deal with their major shareholder um And this continues to happen.
I think a major one, of course, is the kind of collapse of the active funds management industry and move, obviously, for a lot of investors into ETFs, which typically... allocate obviously towards those names that have big index weights.
It's kind of compounding the problem where we're seeing the big cap stocks which are mostly growing at very, very low levels given their maturities as businesses and high dividend yields and inability to obviously invest in the business and make acquisitions because of competitive concerns and so on they are getting more and more expensive but at the other end of the of the market we're seeing valuations really suffer and that's obviously attracting you know takeover interest from mostly from, obviously, private capital, which has longer-term horizons and, you know, the ability to certainly look through short-term weakness in operating performance.
And what has come to market has been pretty small and certainly a fraction of what's leaving the ASX.
We want a healthy stock exchange because it is obviously always a good exit opportunity or a source of capital for companies.
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