On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Dale Gillham, chief investment analyst at Wealth Within.

They discuss the art of selling shares and the factors investors should consider before hitting the sell button.

Episode timestamps

00:00 Introduction

02:00 Why selling shares is harder than buying

08:00 The importance of having an exit strategy before you buy

13:00 Signs that it's time to sell up

16:00 Should you sell after big gains?

20:00 How tax should affect your selling decisions

22:40 Conclusion

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NEXTDC shares plunged more than 40% after delays in upgrading electricity at its Melbourne facility forced it to cut its earnings forecast.

Firmus scrapped its proposed IPO, while South Korean operator Elice fell 32% on debut, before recovering the losses the following day.

These setbacks raise a question: is demand disappointing, or is the industry struggling to deliver enough capacity?

Australia has been here before. During the mining boom, ships queued outside Newcastle and Dalrymple Bay because export infrastructure struggled to keep pace.

Customers wanted the resources, but getting them to market was another matter.

Those bottlenecks did not end the boom. Investment expanded infrastructure, and by 2010 the Reserve Bank reported higher iron ore and coal export capacity.

The comparison offers a reason to remain constructive on data centres. A delayed electricity connection does not, by itself, mean demand has disappeared.

The International Energy Agency expects global data-centre electricity consumption to nearly double, from 485 terawatt-hours in 2025 to 950 by 2030.

Australian research forecasts consumption will nearly triple, from 5.2 terawatt-hours in FY26 to 15.8 by FY30.

But forecasts alone cannot pay the bills. Construction and financing costs can accumulate while revenue waits.

The RBA has warned that debt-funded AI projects could struggle if demand disappoints or adoption takes longer than expected.

For NEXTDC, Macquarie Technology Group and Goodman Group, investors should therefore watch customer commitments and funding alongside construction milestones.

Customers staying committed through delays would support the argument that revenue has been postponed. Cancellations or reduced requirements would suggest something more troubling.

I think infrastructure constraints are insufficient evidence to declare the boom is over.

The mining experience shows an industry can build through bottlenecks when demand persists, although that does not guarantee every project or share price will recover.

Ships waiting offshore helped explain why Australia needed more export capacity. For data centres, the equivalent test is whether customers will still be waiting when the power finally arrives.

Best and worst sectors

Communication Services is the best-performing sector so far this week, rising 2.86% on the back of strong gains in Telstra and TPG, with investors looking for some buy-the-dip type opportunities.

Industrials gained 2.56%, driven by Cleanaway's takeover offer, which sparked a roughly 20% jump, which helped lift the sector.

Financials rounded out the top three, up 1.78%, as the major banks continued to rebound, while takeover interest in Challenger provided support.

At the other end of the market, Information Technology is the worst sector so far this week.

It fell more than 4% as NEXTDC's earnings downgrade compounded an ongoing global sell-off in technology and AI stocks.

Materials was the second-worst sector, dropping 4% as falling gold stocks and renewed weakness in major miners weighed on the sector.

Energy rounded out the worst performers this week, falling 1.09% as oil pulled back and immediate Middle East escalation fears eased, pressuring energy shares later in the week.

Best and worst stocks

Cleanaway Waste Management led the S&P/ASX Top 100 this week, climbing more than 21% after agreeing to an EQT takeover valuing the business at approximately $9.3 billion, including debt.

Challenger Limited followed, rising more than 18% after Daiichi Life proposed an $11.80-a-share takeover, roughly 20% above its previous closing price.

Pro Medicus rounded out the leading performers, gaining more than 10% after securing two seven-year US contracts worth a combined $67 million with Billings Clinic-Logan Health and Virtua Health.

At the other end, NEXTDC Limited was the weakest performer, falling more than 37% after delayed electricity connections at its Melbourne M3 facility forced an earnings forecast downgrade.

Telix Pharmaceuticals followed, falling more than 13% after its quarterly update showed a modest sequential revenue decline, disappointing investors despite a positive full-year outlook.

Regis Resources Limited rounded out the worst performers, falling more than 10% as rain-disrupted production and higher unit costs overshadowed strong cash generation in its September-quarter results.

All Ordinaries Index update

The All Ordinaries Index has barely moved this week, slipping just 0.26% so far as it holds above 8,830.

For the past month, the index has traded in a tight range, hinting at a breakout one week and a fall the next.

This week's action tilted the balance slightly towards further weakness, although recent trading has shown how quickly that picture can change.

However, one potentially encouraging difference stands out: this is the first week in that range that the index hasn't retested 8,800.

If the market rises from here and breaks above 9,000 points, it suggests buyers are becoming more confident and stepping in earlier, rather than waiting for another return to the lows.

Seasonality also makes the next two months worth watching.

Materials typically strengthen through November and December, while Financials tend to soften in November before regaining strength in December.

Given their substantial influence on the Australian market, these sectors could determine whether the index finally escapes its range.

If Materials strength is offset by Financials weakness next month, the market could remain stuck a little longer.

December may offer a better opportunity for a Santa rally if both sectors begin moving in the same direction.

Most Australians probably see America's midterm elections as a political sideshow, but the November 3 outcome could affect global oil prices, inflation, interest rates, and even your superannuation.

President Donald Trump has repeatedly predicted that oil prices will tumble after the November midterm elections.

He's under growing pressure to lower fuel costs, and his administration has already struck a deal to secure Russian diesel supplies to ease the squeeze on American drivers and businesses.

However, the big question is whether these measures can deliver lasting relief, or whether oil prices will remain hostage to the conflict with Iran.

The political stakes are significant.

Historically, the president's party has lost 20 of the 23 midterm elections since 1934.

If Republicans lose control of Congress, Trump could face greater scrutiny and resistance over government spending, military funding and his wider agenda.

That wouldn't automatically end the Iran conflict, but it could make it politically harder to continue the campaign.

So why should Australians care? Start with your super.

Australian retirement funds invest heavily overseas, particularly in American shares. In 2025, the US represented more than half of Australia's overseas portfolio-equity holdings, and super funds were major contributors to those investments.

If a shift in US policy sends American shares sharply higher or lower, that can flow through to Australian retirement balances.

The Australian share market also has potential upside.

If the conflict genuinely winds down and oil prices fall, cheaper fuel could ease inflation and reduce costs for our biggest and most popular sector on the ASX, Materials. This could significantly shape the market's direction over the coming months.

Additionally, the RBA has highlighted how higher fuel prices feed directly into inflation and indirectly into the cost of producing and delivering goods.

A sustained fall in energy prices could give the RBA more room to ease monetary policy, potentially supporting rate-sensitive shares and consumer spending.

Of course, cheaper oil isn't guaranteed, and lower prices caused by a global economic slump would be a very different story.

But if Trump is right and the elections mark a turning point in the conflict, the benefits could extend well beyond America. For Australian investors, the question is whether we're entering another period of global uncertainty or the start of a major relief rally.

Best and worst sectors

Consumer Staples is the best-performing sector so far this week, rising 3.91% as defensive buying supported the sector. Woolworths was among the main contributors as investors sought more reliable earnings.

Financials gained 3.74% as banks found support after softer employment data eased concerns about another interest rate rise, helping the sector recover some lost ground.

Utilities rounded out the top three, up 3.72%, as gains appeared to reflect a shift towards defensive earnings and dividend income amid market uncertainty, with AGL among the stronger performers.

At the other end of the market, Information Technology is the worst sector so far this week. It fell more than 6% as a global tech sell-off and growing concerns about AI spending pressured growth stocks, with Megaport and WiseTech among those hit.

Materials was the second-worst sector, down more than 5% as weaker commodity prices and selling across major miners, gold stocks and lithium producers dragged the sector lower.

Real Estate rounded out the worst performers this week, falling 1.49%. Interest rate uncertainty kept property stocks under pressure, as investors remained concerned about borrowing costs and valuations.

Best and worst stocks

Bank of Queensland led the ASX Top 100 this week, climbing more than 7%. Investors welcomed its full-year results, with statutory profit rising 88% and the dividend maintained, despite weaker underlying cash earnings.

Westpac Bank followed, rising more than 5% as investors rotated into bank shares from technology and mining stocks.

Treasury Wines Estate Limited rounded out the leading performers, gaining more than 5%. Stronger sales momentum in China and the US, along with reaffirmed FY27 earnings guidance, helped restore confidence.

At the other end, Paladin was the weakest performer, falling more than 17% as disappointing quarterly uranium production and higher costs at Langer Heinrich triggered heavy selling, despite unchanged annual guidance.

PLS Group followed, falling more than 15% as weak lithium sentiment and reduced broker lithium-price forecasts weighed on the shares, despite a midweek rebound.

NEXTDC Limited rounded out the worst performers, falling more than 14% as the broader AI and technology sell-off weighed on sentiment, while a break below $10 added to its technical weakness.

All Ordinaries Index Update

Indecision continues to hang over the Australian market, with the All Ordinaries Index down around 0.4% so far this week. After September's aggressive selling, a modest decline almost feels like a relief.

The encouraging sign is that 8830 continues to hold, although the recent price action suggests the market may be pausing rather than building a convincing recovery. If that support gives way, a move toward 8600 remains possible.

For now, patience and preparation matter. With the market drifting sideways and conviction lacking, there is little reason to over-leverage or chase highly speculative trades.

Stretched valuations among the big US AI names and growing uncertainty around the sustainability of that spending boom are adding to investor caution. Locally, buyers also appear reluctant to commit without clearer signs that the market is finding its footing.

Despite the near-term risks, I still see longer-term opportunities in the Australian market.

Corrections can create attractive buying opportunities, but there is no need to rush simply because prices have fallen.

My focus is on identifying quality stocks, watching for stronger buying support and being ready to act when the evidence improves. Staying patient and selective now should leave investors better placed to take advantage of the next sustained move higher.

For investors seeking equity market returns, the Federal Government's changes to capital gains tax could materially affect how after-tax returns are generated.

While the reforms increase the effective tax paid on real capital growth, it may not affect the tax treatment of income in the same way.

With no minimum tax rate proposed for income, but a 30% minimum tax rate on real capital gains, active dividend income strategies may become increasingly attractive, especially for investors seeking a greater proportion of their total return from income over capital appreciation.

So why is this the case?

The active harvesting of dividends and franking credits shifts a significant proportion of returns towards income.

What this means is that while fund managers continue to target outperformance relative to the benchmark's total return, a larger share of that return may be generated through income rather than capital gains.

Therefore, as this income is not subject to the proposed 30% minimum tax rate on real capital gains, investors may be less impacted by the effective increases in taxation on investment returns.

Companies capable of delivering a meaningful proportion of total returns through sustainable income may be particularly valuable in this environment.

One example that's piqued our interest at Ausbil is APA Group.

APA Group (ASX: APA) owns and operates gas transmission and distribution assets across all states and territories in mainland Australia.

Over the next three years, APA is expected to invest $3.5 billion in organic growth capex for gas transmission and storage assets and renewable projects. This is supported by existing balance sheet funding capacity.

Data centres are also a central earnings generator for APA as users of gas-powered generation, with the Australian electricity market transitioning away from fossil fuels. APA is seen as a key provider of reliable power, along with Origin and AGL.

APA's total return currently includes a distribution yield of more than 5% p.a. (based on the year to August 2026), and APA has been able to grow this distribution over time. This is partly because of the nature of its long infrastructure cash flows.

APA Group has been able to capture and slightly exceed CPI on its growth over the past year, with most of its return being income with inflation protection, which benefits our active dividend strategy.

As a smaller proportion of total return is derived from capital gains, the impact of the new CGT measures may be lower than for investments that rely more heavily on capital appreciation.

For many investors, this tax position also improves after the application of franking credits.

Investors may seek capital growth that shifts up by inflation to retain capital value. Under the CGT changes, the tax treatment of nominal and real capital gains may differ.

In theory, if capital growth broadly matches inflation, the impact of proposed taxation of real capital gains may be reduced, leaving a larger proportion of returns generated through income.

With its attractive yield, inflation protection and lower reliance on capital appreciation, APA is well positioned to deliver resilient after-tax returns under the CGT regime.

What if the biggest threat to the artificial intelligence (AI) boom isn't that AI fails, but that it succeeds at a price investors can no longer afford? That is the hidden financial risk behind the AI boom, and investors may be overlooking it as technology companies pour billions into the race to dominate AI.

For years, the world's biggest technology companies were prized because they could grow rapidly without constantly building factories, mines or other expensive physical assets. AI is changing that.

Microsoft, Alphabet, Amazon, Meta and Oracle are pouring extraordinary sums into chips and data centres, with Reuters estimating that every additional dollar of operating cash flow between 2025 and 2027 could be matched by around $1.57 of additional investment.

We are already seeing what that can do to some of the world's biggest cash-generating businesses. Alphabet recently recorded negative free cash flow for the first time in more than two decades. Reuters expects the five technology giants combined to eventually spend more on new investment than they generate in free cash flow.

As a result, public markets are beginning to ask some uncomfortable questions.

In Australia, data-centre developer Firmus Technologies has reportedly been forced to reconsider a proposed valuation of nearly $44 billion, and on Friday announced it had withdrawn its application to list on the ASX.

That's particularly striking given its valuation was below $2 billion roughly a year ago and about 97% of its contracted revenue reportedly relates to facilities that have not yet been built.

It isn't alone.

SoftBank-backed US data-centre developer SB Energy has also delayed its IPO as investors scrutinise its enormous funding requirements. Meanwhile, OpenAI has ruled out a 2026 listing, citing AI safety concerns rather than investor demand.

This is where I think investors may be missing the bigger risk.

AI companies need enormous computing capacity. Data centres need billions in financing. Chipmakers need those data centres to keep expanding, and technology giants need AI revenues to eventually justify all that spending.

Each part of the chain increasingly relies on the next.

That doesn't mean AI is a bubble or that the technology will fail.

Demand may ultimately justify today's investment, but markets don't need AI to fail for shareholders to lose money. Expectations simply need to outrun the cash these businesses eventually produce. Let's not even entertain the idea that a lower-cost competitor enters the fray, which I believe is the biggest risk.

Ultimately, what will decide how this ends up is whether those contracts eventually generate enough cash to pay for the revolution investors have already priced in. AI may change the world and still be a terrible investment at the wrong price.

Best and worst sectors

Healthcare was the best-performing sector so far this week, rising more than 2% as investors rotated towards defensive healthcare stocks amid market volatility, with gains in Cochlear and biotech companies providing support.

Utilities gained more than 1.8% as investors sought more stable earnings amid rising bond yields and economic uncertainty.

Energy rounded out the top three, up more than 1.7%, as renewed Middle East supply concerns supported oil prices and Australian energy stocks, although WTI crude remained below the key US$100 level.

At the other end of the market, Information Technology was the worst sector so far this week. It fell more than 4% as rising global bond yields weighed on growth-stock valuations.

Materials was the second-worst sector, dropping just under 1% as broad selling across iron ore, gold, lithium and rare earths stocks dragged the sector lower despite some underlying commodity prices holding firm.

Industrials rounded out the worst performers this week, falling more than 0.8% as rising borrowing costs and concerns about the Firmus data centre IPO weighed on sentiment.

Best and worst stocks

Cleanaway Waste Management led the ASX Top 100 this week. It climbed more than 6% following renewed progress on EQT Infrastructure's proposed takeover, with investors encouraged by the prospect of a deal.

Telix Pharmaceuticals followed, rising more than 4.5% after its brain cancer imaging drug Pixclara began commercial use in the US, while UBS upgraded its price target from $22 to $26.

Insurance Australia Group Limited rounded out the leading performers, gaining more than 4% as investors favoured defensive insurers, with IAG also challenging the competition regulator's decision to block its proposed RAC Insurance acquisition.

At the other end, AMP Limited was the weakest performer, falling more than 5% amid concerns about higher interest rates and weaker investor sentiment.

Ramelius Resources followed, down more than 4% amid broader gold-stock selling, while its quarterly update highlighted weather-related production disruptions despite stronger cash reserves.

NEXTDC Limited rounded out the worst performers, also falling more than 4% as rising bond yields intensified concerns over the company's substantial data centre expansion costs, funding requirements and future profitability.

All Ordinaries Index Update

The All Ordinaries Index started the week with buyers in control, but sellers took over on Thursday, pushing the index down around 0.35%. This has become a familiar pattern over the past three weeks: buyers drove the market higher, only for Thursday's selling to wipe out those gains. That puts the key 8830 level back in the spotlight, with Friday shaping up as another important session.

Interestingly, buyers have stepped in on each of the past three Fridays, helping the market recover and close the week above 8830. If we are going to see any convincing signs that a sustained rally is beginning, that pattern needs to continue. A weekly close below 8830 would suggest buyers have finally lost the battle at this critical level, increasing the likelihood of a further decline towards 8600.

If buyers successfully defend 8830, the next challenge will be reclaiming 9000. More importantly, I want to see the market hold above that level before we become more confident a meaningful recovery is underway.

Seasonally, October is still tracking below its historical average return of around -0.25%, although we are only in the early stages of the month and coming off a particularly bearish September. What interests me more is how long this weakness has persisted.

After the previous two significant market peaks, the All Ordinaries established a four-week low. We are now approximately eight weeks into the decline from the August 2026 peak, raising the question of whether the market is approaching a turning point or preparing for another leg lower.

For now, investors need to remain selective and prepared for either outcome. After all, successful investing isn't just about how much money you make. It's equally about knowing when to take profits, protect your capital and, perhaps most importantly, when to stay out of the market altogether.

Listed on the Milan stock exchange, Buzzi (Buzzi SpA - BIT: BZU)  is an Italian family-controlled cement producer with a diversified portfolio of assets across the US, Italy, Germany, Eastern Europe, Brazil and the UAE, as well as a significant Mexican joint venture. The US is its most important market.

Why Buzzi shares look undervalued

Cement has attractive local economics: plants are highly capital intensive, difficult to permit and costly to replicate, while high transport costs create meaningful barriers to entry.

Still controlled by the founding family, Buzzi has an attractive net cash balance sheet, diversified end market exposure (~35% US, ~21% Central EU) and supportive valuation (~8% Free Cash Flow Yield, 0.9x Book Value).

Buzzi is cheap on an asset basis, with enterprise value of around €125 per tonne of cement capacity. This looks attractive given the group's substantial US exposure, where recent cement transactions have occurred at more than $300 a tonne.

At the current share price of €37.85, with a Market cap of €6.5 billion, Buzzi trades on just 8.4x 2026E EPS of €4.50 and 0.9 Book value.

We think shares are worth high-€40s or ~23% above current levels.

Buzzi's growth outlook and cement market trends

The company's mid-year report indicated they do not anticipate any significant changes compared with the macroeconomic and geopolitical environment observed in the first half.

International tensions and persistent economic uncertainty continue to affect markets, mainly through inflationary pressures on operating costs.

In their main geographies, Buzzi expect demand to remain broadly in line with the first six months of 2026.

The group is reducing its carbon intensity, with net Scope 1 emissions falling to around 562kg of CO₂ per tonne in 2025 and a target of below 500kg/t by 2030.

The Carbon Border Adjustment Mechanism (CBAM) should provide some protection by imposing a comparable carbon cost on imported cement, supporting the industry's ability to pass higher carbon costs through to customers.

Dividends, buybacks and shareholder returns

Buzzi generated €4.5 billion of revenue and €1.23 billion of recurring EBITDA in 2025, at a margin of around 27%.

The balance sheet is a key strength, ending 2025 with €1.1 billion of net cash, giving the group substantial flexibility for acquisitions, investment in existing plants and shareholder returns.

Near-term earnings are being held back by weaker construction activity in the US and Germany and higher operating costs, with management guiding to €1.1-1.2 billion of EBITDA in 2026.

In terms of downside, the company is trading below book value today, and on an EV/IC basis at 0.78.

It fell to around 0.6x during the Eurozone crisis and to 0.55x during the 2022 interest rate shock, which we consider to be a reasonable floor on an asset basis for a business.

However, the combination of roughly 0.9x book value and 8.4x earnings makes Buzzi more interesting, while capital returns are becoming more meaningful.

The dividend yield is only around 1.9%, but Buzzi has increasingly supplemented this with buybacks, which have amounted to roughly 2-3% of market capitalisation annually.

This takes total shareholder yield towards 4-5%, while leaving the group with substantial balance sheet capacity.

At 8.4x earnings, Buzzi has an earnings yield of around 11.9%, suggesting significant scope to increase distributions or deploy capital into attractive acquisitions and reinvestment opportunities.

Are Australians preparing for a recession or treating one as inevitable before the evidence supports it?

Higher interest rates, expensive groceries and rising unemployment make pessimism understandable, but we have heard this story before.

In early 2023, Deloitte warned that further interest rate increases could tip Australia into recession.

The concerns were familiar: squeezed households, weakening confidence and falling property values. Yet Australia avoided a technical recession that year.

The national accounts recorded growth in every quarter of 2023. Meanwhile, national home values rose 8.1%. Anyone assuming economic anxiety meant further price falls would have been wrong.

There is another side to the story.

Output per person fell during 2023, so many Australians genuinely went backwards even as the overall economy expanded. That helps explain why an economy can feel recessionary without entering a technical recession.

What about today? Australia grew 0.4% in the June quarter and 2.1% over the year.

The latest output figures show expansion, not contraction.

Unemployment at 4.6% signals mounting pressure, but it does not mean Australia is in a recession. Inflation of 4.0%, with underlying inflation at 3.6%, further complicates the outlook.

More interest rate rises could weaken growth, but that is a risk to assess, not an outcome to assume.

Even if a recession arrives, its severity matters.

A short downturn and a prolonged depression have very different consequences.

A recession is serious, especially for those who lose their jobs, but simply calling something a recession does not tell us how deep or prolonged the downturn will be.

My view is that now is the time to challenge the crowd's pessimism. The lesson from 2023 is not that everything always works out.

It is that gloomy forecasts can fail while opportunities emerge.

Prepare for difficult conditions and keep some financial breathing room.

But do not put every worthwhile decision on hold until the headlines improve. Fear can help us recognise risk, but it becomes costly when we mistake it for certainty.

Best and worst sectors

Information Technology was the best-performing sector so far this week, rising more than 2.7% as Tuesday's strong rally in Codan, Megaport and WiseTech helped lift the sector. Codan was also boosted by demand for its communications equipment.

Consumer Discretionary gained more than 1.7% as lower oil prices offered some relief to the outlook for household spending.

Buying in major retailers including Wesfarmers, JB Hi-Fi and Harvey Norman led the gains.

Real Estate rounded out the top three, rising more than 1.4%, with property stocks rallying on the slightly below-forecast inflation result as investors reassessed the risk of further increases in borrowing costs.

At the other end of the market, Energy was the worst sector so far this week. It fell more than 2.4% as falling oil prices weighed on producers and investors reassessed the earnings support from September's elevated crude prices.

Materials was the second-worst sector, dropping more than 1.5% as gold fell and US bond yields climbed, pressuring gold miners and adding to weakness across resources.

Consumer Staples rounded out the worst performers this week, falling more than 1.2% as Thursday's broad sell-off hit defensive shares as well. Rising bond yields and concerns about Australian earnings appear to have outweighed their usual defensive appeal.

Best and worst stocks

Codan Limited led the ASX Top 100 this week. It climbed more than 29% after a profit upgrade driven by exceptionally strong demand for its drone communications technology in conflict regions.

Northern Star Resources followed, rising more than 7% after revealing Gold Fields' takeover approach, with expectations of an improved offer supporting buying despite the board rejecting the bid.

Seek Limited rounded out the leading performers, also gaining more than 7% as bottom pickers drove short-term buying despite the long-term downward pressure the stock faces.

At the other end, Liontown Resources was the weakest performer, falling more than 15% as its $389 million Kathleen Valley expansion increased spending commitments, potentially adding to selling pressure.

Lynas Rare Earths followed, falling more than 11% as investors questioned the price and processing risks of its proposed $672 million acquisition of Meteoric Resources.

Cochlear Limited rounded out the worst performers, falling more than 5% as it faced fresh uncertainty after being served with a shareholder class action over its FY2026 profit guidance.

All Ordinaries index update

The All Ordinaries Index has had another volatile week, finishing Thursday down 0.58%.

After a promising 0.9% rise on Wednesday, sellers returned on Thursday, driving the market down 1.9% and wiping out those gains.

With buyers struggling to hold their ground, 8600 is now the next important level to watch.

Energy and Materials led the losses, while oil prices have fallen around 16% from their September peak amid reports of increased flows through the Strait of Hormuz.

For investors, the challenge is to remain patient without losing sight of potential opportunities.

Many quality stocks have been caught in the selling, but a falling share price does not necessarily mean a company's long-term prospects have deteriorated. Equally, a lower price alone is no reason to buy.

We still need to see evidence that buyers are returning.

As I've mentioned in previous reports, September has historically been a weak month for the ASX, while October has tended to be relatively flat, averaging around negative 0.25%.

These seasonal patterns provide context, but price action will ultimately tell us whether the current weakness is easing or has further to run.

The best use of this period is to build a watchlist of companies with sound fundamentals and monitor their charts for favourable technical setups.

November has historically been one of the stronger months, which could provide a tailwind if sentiment improves and buyers regain control.

For now, avoid rushing in or allowing daily swings to dictate your decisions.

Stay patient, watch the key levels and prepare your next move. The final months of the year could still offer worthwhile opportunities, but being ready also means waiting for the market to give you a reason to act.

In February 2026, the International Monetary Fund (IMF) warned that Australia faced risks on both sides.

Inflation could remain stubborn, while weaker growth could push unemployment higher. It backed an RBA that responds to the data and called for tighter control of government finances.

August's jobs figures put that balancing act in sharper focus.

The unemployment rate rose to 4.6%.

On the ABS trend measure, 9300 more Australians were unemployed than in July and 58300 more than a year ago, while full-time employment fell by 6300 in the seasonally adjusted figures.

While the unemployment number is up, it does not mean the jobs market has collapsed yet.

Total employment rose by 39500, part-time employment increased, and hours worked were up.

The ABS also cautions against reading too much into one month's movement, but it would be just as careless to ignore the rise in unemployment.

The question now is whether Australia can bring inflation down without pushing more people out of work.

The RBA has reason to remain concerned. Its August assessment put underlying inflation at 3.6%, above its 2% to 3% target. That rules out declaring victory or assuming rate cuts are around the corner.

However, it does not make another rate rise the obvious next move.

Higher rates slow borrowing and spending; they cannot build homes, fill skills shortages or directly reverse an overseas energy shock.

If inflation remains high while the labour market softens, the RBA needs to establish what is keeping prices up before making mortgages and business loans more expensive again.

My view is that the RBA should hold at its next meeting. Give the recent rate rises more time to work and look for evidence that August's rise in unemployment is continuing.

A further hike should require convincing signs that broad spending is still driving inflation, not simply another headline.

Most importantly, the government cannot leave this entire problem with the RBA.

The IMF supported fiscal restraint alongside reforms to lift productivity and ease housing supply constraints.

Those are harder tasks than calling for the central bank to be tough, but they matter if Australia wants lower inflation without relying on weaker employment to get there.

It is easy to demand another rate hike when someone else bears the cost in their mortgage repayments, their business or their job.

The IMF did not tell Australia to raise rates again. It warned that policymakers must stay alert to both inflation and a weakening economy.

August's figures are a reason to take both sides of that warning seriously.

Best and worst sectors

Healthcare was the best-performing sector so far this week, rising more than 0.8% as the market looked for earnings less exposed to a slowing Australian economy. Gains in CSL, Cochlear and Fisher & Paykel also helped the sector.

Consumer Discretionary also gained more than 0.8% as lower oil prices offered some relief to the outlook for household spending.

The rise in major retailers also suggested investors were willing to buy consumer stocks despite the risk of another RBA hike.

Information Technology rounded out the top three, up more than 0.6%, as renewed global enthusiasm for AI and a strong Nasdaq fed into Australian growth stocks.

This lifted the sector even as higher interest rates threatened valuations.

At the other end of the market, Utilities was the worst sector so far this week.

It fell more than 4% as the prospect of another RBA rate rise made dividend-paying utilities less attractive relative to cash and bonds.

Investors also rotated toward growth stocks as market sentiment improved.

Communication Services was the second-worst sector, dropping more than 2% as pressure on its major names increased, with Telstra facing renewed scrutiny over its emergency call network this week.

Energy rounded out the worst performers this week, falling more than 1% as oil retreated on hopes of progress in Middle East diplomacy.

This led to reduced earnings outlooks for producers such as Woodside and Santos.

Best and worst stocks

Ramelius Resources led the ASX Top 100 this week. It climbed more than 10% as its new production outlook put FY30 gold output at 560000 to 610000 ounces, about 11% above its previous plan.

Washington H. Soul Pattinson followed, rising more than 7% as its full-year results showed higher investment cash flow and a larger fully franked dividend after the Brickworks merger.

Cochlear rounded out the leading performers, gaining more than 6% as buyers continued to drive the reversal after the stock suffered one of its worst falls in history.

At the other end, Telix Pharmaceuticals was the weakest performer, falling more than 11%. Investors sold the stock after its proposed ITM merger raised concerns about the deal's cost and dilution from issuing new shares.

Xero followed, falling more than 5% as investors weighed weaker margins and Melio integration costs against high growth expectations, with elevated rates adding pressure on the valuation.

Origin Energy rounded out the worst performers, falling more than 5%, with its fall coinciding with oil retreating below US$100 and weakness across energy and utility shares.

All Ordinaries Index update

The sellers regained control of the All Ordinaries Index this week. After a promising start, the index fell more than 1% on Thursday, closing around 0.3% lower so far this week.

However, what caught my attention was where buyers stepped in during the sell-off.

Last week, the All Ords fell to 8835 points before buyers turned it around and pushed the index into positive territory.

That reversal came on weekly volume of just under 11 billion.

Since 2000, volume has reached roughly that level on four other occasions: shortly after the GFC low, near the March 2011 peak, at the COVID low, and around the March 2026 tariff sell-off low.

These led to significant moves, though not always in the same direction. That makes this Thursday's price action especially interesting: buyers returned at 8837 points, almost exactly where they defended the market last week.

Does that mean a major rally is coming? It's too early to tell, but if the All Ords keeps holding around 8835, the case for a rebound gets stronger. After such an unusually high-volume week, I'll be watching this level closely.

The Vanguard S&P 500 ETF, better known as VOO, has become the world's largest ETF, with more than US$1 trillion invested in it.

Retail investors love it because it's cheap, simple and gives them exposure to the US's largest companies.

But that doesn't make it safe, especially as the conditions that drove the market higher start to change.

The Federal Reserve has just raised interest rates for the first time since July 2023. Bond yields are pushing towards 5%, oil is trading near US$100 a barrel and borrowing money is becoming more expensive.

The AI boom has flourished on cheap money, enormous spending and expectations of extraordinary future growth.

But higher bond yields reduce the present value of future earnings, while more expensive credit raises the cost of funding the chips, data centres and energy infrastructure needed to keep the boom going.

Some of the biggest names in AI are calling for development to slow. Whether that leads to lower spending is still unclear, but spending doesn't need to collapse for these stocks to fall.

When expectations are already high, even slightly weaker growth can trigger a major reassessment. That's the real risk for VOO investors.

The fund may hold around 500 companies, but a small group of technology giants heavily influences its performance.

If the stocks that drove the index higher begin falling together, owning the entire index may offer far less protection than many investors expect.

After the Fed's rate hike in July 2023, the S&P 500 fell about 11% to its October low. A similar correction would make 7000 points a real possibility, but history tells us the downside can be much greater.

The S&P 500 lost roughly 40% to 50% during the 1973-74 oil crisis, the technology bust and the Global Financial Crisis.

If slowing AI investment becomes the catalyst for another major crash, history suggests the index could fall towards 4000 points.

That would be very painful for retail investors who have piled into ETFs near record highs, leaving them exposed to the entire decline.

While holding through a 50% fall sounds easy in theory, it rarely feels that way when your money is disappearing.

History shows that many investors eventually crack under the pressure and sell when the damage is already done.

However, holding on presents another challenge: how long can you afford to wait?

After peaking in 2000, the S&P 500 didn't break decisively above that level until 2013. Could you afford to wait another 13 years to get your money back?

The S&P 500 doesn't have to crash, but with money becoming more expensive, oil pushing costs higher and AI expectations stretched, blindly buying the index may not be the safe strategy many investors have been led to believe.

Best and worst sectors

Health Care was the best-performing sector this week, rising more than 4% as heavyweight CSL continued its recovery, supported by renewed investor confidence and positive broker sentiment.

Communication Services gained 0.81% as investors rotated into defensive stocks, supporting heavyweight Telstra.

Consumer Discretionary rounded out the top three, up 0.40%, as bargain hunting supported retailers following the market's recent sell-off.

At the other end of the market, Materials was the worst sector, falling more than 1.5% as weaker commodity prices and profit-taking weighed on major miners.

Information Technology was the second-worst sector, also dropping more than 1.5% as rising bond yields and renewed AI concerns pressured highly valued growth stocks.

Real Estate rounded out the worst performers this week, falling more than 0.5% as higher bond yields and expectations of further interest rate rises reduced the appeal of property stocks.

Best and worst stocks

Telix Pharmaceuticals led the ASX Top 100 this week, climbing more than 11% after receiving FDA approval for its brain cancer imaging product, Pixclara.

Dyno Nobel Ltd followed, rising 6.94% as its share buyback and improving explosives earnings outlook attracted buyers.

CSL Limited rounded out the leading performers, gaining 6.26% as broker upgrades strengthened confidence in its earnings outlook.

At the other end, Mineral Resources was the weakest performer, falling more than 8% as another decline in lithium prices weighed on producer sentiment.

IGO Limited followed, also falling more than 8% as falling lithium prices renewed concerns about its earnings outlook.

NEXTDC Limited rounded out the worst performers, falling 8.29% after announcing $1.1 billion in convertible note funding, raising concerns about dilution, debt and heavy spending.

All Ordinaries Index update

The All Ordinaries has finished flat so far this week, slipping just 0.1% as indecision continued to dominate.

The recent decline in oil prices may have eased some pressure, but the index remains caught between key levels.

Support sits around 8800, while 8600 becomes the next major level to watch if sellers regain control.

Healthcare helped offset further weakness in Materials, while Financials finished relatively flat.

Materials has now declined for three consecutive weeks and is approaching its longer-term uptrend, making next week particularly important.

Strong demand linked to renewable energy and electric vehicles could attract buyers, although uncertainty surrounding the AI investment cycle may create some headwinds.

For now, this remains a stock-picker's market rather than one that favours passive investors.

If the All Ordinaries holds above 8600, the broader market can still be viewed as moving sideways.

However, a decisive break below that level could bring 8000 into focus and potentially trigger the deepest correction since the tariff-driven sell-off in April last year.

Markets can change quickly, so investors need to stay informed and watch how prices respond around these critical support levels.

I should make it my aim to come up with a better term. But I'm a finance nerd, not a creative genius, so instead, I'll give a Freddo Frog to anyone who can come up with a better one. Especially because it's a really important idea that will not only help you build long-term wealth, but also ride the waves of volatility.

Here's the idea.

Previously, I've talked about saving money every payday, and investing that money as regularly as you can (keeping costs low as you go).

Let's use a hypothetical example.

You decide to invest every month. In the first month, the shares are $9 each. Next month, $10. The month after, $9.50. Then $11, $10 and $10.50.

At the end of six months, that $10.50 price is higher than some of the prices you paid, but lower than others. But what if you'd bought only once? Maybe you'd have paid $9. At the end of that six-month period, you'd have made a nice gain and probably feel pretty good.

And if you'd only bought once, say, in month four? You'd have paid $11, and be nursing a small but disappointing loss.

Smooth sailing

Now, in an investing lifetime, one company, bought once isn't going to make or break you. Even buying a few companies a few times won't.

But if you're making only very occasional, large purchases, you're putting a lot of store in your ability, or luck, to buy for the right price at the right time.

Dollar-cost averaging, by comparison, suggests that buying small amounts regularly smooths, or 'averages', your cost. Hence the (clunky) name.

It removes the need to try to time the market, by giving you an average(-ish) price.

Let's say you invest $200 per month for a year. Sometimes the price is up. Sometimes it's down. It'd be nice for the share price to just go up after you bought, of course, but there's something else at play here. Just look at how your purchasing power expands when the price falls (see table, opposite).

No-one likes a smaller portfolio. But because you keep buying, in the 'down' months you get more shares for your money!

You own more of the company now than if the share price had simply only gone up.

On the straight and narrow

Here's the other way to look at it through a behavioural psychology lens: if you buy today at $10, and the share price drops to $9, you get to buy the next lot at a cheaper price. And if you buy today at $10 and the share price rises to $11, you've made money.

Now, that's selective use of data and arguments, of course, but the point is that it helps keep us on the investing straight and narrow, and keeps us buying.

See, I've heard plenty of people take one of two opposing views based on how they feel about share price movements.

When a share price falls, some people will say, 'Great, it's cheap. I should buy more', while others will say, 'Nah, it's falling... I'm not buying'.

On the other hand, when prices rise, some worry that 'I've missed it', while others say, 'It's going up... I'll buy'.

I'll level with you: None of those approaches is right, based only on share price movements.

Maybe the stock that's gone up is now too expensive. Maybe the one that fell is down because the business is tanking. Or maybe the shares are up because the business is growing strongly, or down because of sentiment, not business reality.

In other words, there is nothing to learn from past share price movements!

But dollar-cost averaging, when committed to as a strategy, allows you to put those psychological demons to rest. It allows you to make your investing more mechanical, adding regularly as long as the company is worth investing in at the current price.

It won't give you the lowest price ever, but then nothing other than luck will ever do that.

And you could be more involved if you wanted, picking which company's shares you buy when, if that's your preference.

But for many, perhaps most, people, dollar-cost averaging is a form of the 'pre-commitment'. And it can be a serious help when it comes to getting invested, remaining invested and adding to your investment snowball as it rolls steadily downhill, picking up more snow as it goes.

Now, let's unpack one of the most powerful acronyms in investing.

The Pareto Principle

You might have heard of a bloke called Pareto, after whom the Pareto Principle is named. You've almost certainly heard his idea expressed more simply as the 80/20 rule.

The idea is that 80% of a result comes from 20% of the effort. Maybe 20% of a company's customers deliver 80% of the revenue. Maybe 20% of a company's customers are responsible for 80% of complaints, too!

(Apparently, or apocryphally, Pareto discovered that 80% of the peas he got from his garden came from 20% of the plants!)

You get the drift. It's commonsense, and a concept that you probably have personal experience with, even if you didn't consciously think about it as the 80/20 rule.

It won't surprise you to learn that the same thing applies, directionally at least, Pareto is essentially a rule of thumb, in investing.

Except it might be closer to 90/10 or 95/5.

The vast bulk of your return will be driven by your savings rate and investing horizon. A little extra (the 5%, 10% or 20%) might come from the time, effort and energy you put into trying to outsmart the market.

Maybe.

The Pareto Principle isn't an iron law, but it is an observation that getting a few big things right is generally the key to success in most endeavours.

In investing, that's probably your savings rate, your investment horizon, diversification, dollar-cost averaging and patience.

By all means, chase the extra return if you have the opportunity... just make sure it doesn't backfire on you, instead.

What really matters

Complex strategies rarely outperform simple, disciplined approaches.

Diversification and consistency matter far more than cleverness.

Simplicity makes investing easier to stick with when markets become volatile.

This is an edited extract from Chapter 9 of The One-Page Investing Plan: start simple, stay patient, build serious wealth by Scott Phillips (Wiley, $34.95). Enter now to win one of five free copies.

If Australia's August reporting season has a key message to deliver, it's that the market's patience is wearing thin.

At a headline level, the reporting season looked healthy enough. Earnings growth was the strongest in four years, dividends rose, and several sectors produced standout results.

But scratch beneath the surface and a different story emerges.

This was a reporting season defined by sharp reactions, widening performance gaps and a market increasingly focused on execution rather than optimism.

The days of a rising tide lifting all boats appear to be fading and every company is now being tested on its own fundamentals.

That was reflected in the volatility. Almost half of ASX 200 companies experienced a single-day share price move of at least 5% in either direction during August.

Combined with February's reporting season, 2026 was one of the most volatile reporting years in recent memory.

Investors rewarded results and punished excuses

Investors should note that this volatility was not random. Companies that delivered strong results and credible guidance were rewarded.

Those that missed expectations, however narrowly, were often punished immediately and sometimes brutally. In many cases, it was not the result itself that mattered most, but what management teams said about the road ahead.

That is where the more concerning signals emerged. While earnings growth was strong, much of that strength came from the resources sector.

Strip mining out of the equation and earnings growth drops back into a far from inspiring single digit growth.

The rear-view mirror looks better than the road ahead. Company guidance broadly disappointed relative to consensus expectations and forward ASX 200 earnings forecasts have continued to drift lower.

Markets are ultimately forward-looking. Investors care far more about where profits are heading than where they have been.

And on that measure, enthusiasm is becoming harder to find.

The real test wasn't earnings, it was guidance

Mining was the clear standout winner of reporting season. Materials rose 12% during August as earnings upgrades flowed through the sector.

BHP reclaimed its position as Australia's most valuable company, with investors increasingly focused on its long-term copper growth pipeline and the role critical minerals are likely to play in global electrification and AI infrastructure buildouts.

Healthcare was another notable winner, surging almost 19% for its strongest monthly gain in more than a quarter of a century.

After a prolonged period of valuation pressure and lacklustre performance, investors were willing to revisit the sector as earnings momentum improved and cost-control measures began to gain traction.

CSL was the obvious headline, rising 17% on reporting day despite describing FY27 as something of a reset year.

The market looked through the near term and focused on the longer-term earnings trajectory.

Mining and healthcare emerged as the clear winners

At the other end of the market, consumer discretionary, property and the major banks struggled.

Retail results from companies such as JB Hi-Fi and Harvey Norman reinforced concerns about the consumer.

Elevated interest rates, softer housing conditions and ongoing pressure on household budgets are creating a clearer divide between businesses exposed to discretionary spending and those with more defensive earnings profiles.

The major banks faced their own challenges.

Commonwealth Bank's 10% decline in August highlighted weakening earnings momentum and increasingly difficult comparisons after years of strong performance. Investors are beginning to question how much growth remains available when margins are under pressure and competition for deposits remains elevated.

For those seeking exposure to financials, the risk-reward balance is shifting.

In this environment, we'd rather be the bank's lender than the bank's owner, favouring the income and credit stack over equity risk.

Why investors turned on some market favourites

Perhaps the most important lesson from reporting season was what it revealed about stock picking.

Nearly half of Australia's largest listed companies underperformed a simple broad-market exposure such as the Global X Australia 300 ETF (A300) during the month. That should give investors pause.

Identifying tomorrow's winners is becoming harder. Long-term global research tells a similar story.

Most individual stocks fail to outperform the broader market over time, and many ultimately generate negative shareholder returns altogether.

What this means for investors now

Broad diversification will never be the most exciting strategy in the market, but what it can do is provide exposure to the winners without requiring investors to know who they will be in advance.

When every company is being tested on its fundamentals, owning the whole garden can be a far more reliable approach than trying to predict which seeds will grow tallest.

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Jamie Hannah, deputy head of investments and capital markets at VanEck.

They discuss the risks and rewards offered with small caps and mid caps.

Episode timestamps

00:00 Introduction

01:17 What are small caps and mid caps?

03:33 Behavioural differences

05:07 The mid cap sweet spot

06:18 How have small and mid caps performed?

08:36 The investment case for smaller companies

11:21 How much should investors allocate to small and mid caps?

13:19 The key risks of investing in smaller companies

15:30 Options for gaining exposure to small and mid caps

16:31 Local and international ETF opportunities

19:25 Conclusion

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

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New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

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Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

Could the next financial crisis already be sitting inside your superannuation account?

It sounds alarmist, but regulators are increasingly asking the question as Australia's private credit market has grown to around $250 billion.

What was once a niche corner of finance has become one of the country's fastest-growing sources of funding.

Most Australians have probably never heard of private credit. Yet many could already have exposure through their superannuation. ASIC has repeatedly highlighted the growing connection between private credit and the super sector, warning investors to better understand the risks involved.

The recent collapse of Bathla Group, which entered administration owing approximately $3.4 billion to creditors, has thrust those risks into the spotlight, but Bathla is not the real story.

The real issue is that many of the conditions that could place pressure on private credit are already emerging.

Interest rates remain elevated, inflation has proven more persistent than many expected, construction costs remain significantly higher than before the pandemic and parts of the property market are beginning to soften.

At the same time, developers who borrowed heavily during years of ultra-low interest rates are being forced to refinance at much higher borrowing costs.

That matters because more than half of Australia's private credit lending is tied to property development and construction.

In a rising property market, those risks can remain hidden. However, when borrowing costs stay high, property values soften and developers struggle to access fresh funding, pressure begins to build across the entire system, and that is where the risk to superannuation begins.

Australia's $250 billion private credit market has never been tested by a severe downturn at anything close to its current size. If several major developers fail within a short period, fund managers may be forced to write down the value of their loans.

Those write-downs could then trigger redemption requests from investors seeking to reduce their exposure.

The problem is that many private credit assets cannot be sold quickly or easily. What appears liquid in good times can become extremely illiquid in bad times.

When investors want their money back, someone has to buy the underlying assets. If there are few buyers, prices can fall rapidly, forcing further write-downs and creating a self-feeding cycle.

Sound familiar?

The Global Financial Crisis in 2008 was not simply about falling property prices. It became a crisis when investors realised much of the property-linked debt they owned was worth far less than expected and there were very few buyers when everyone wanted to sell.

Today, ASIC is warning of the sector's "first significant cracks", while the Reserve Bank has raised concerns about transparency, leverage and visibility of risk within private credit markets.

So, the big question is: are the same ingredients that fuelled the GFC beginning to emerge again?

Higher interest rates, refinancing stress, weakening property markets and growing private debt are already putting pressure on borrowers. If those trends continue, the real risk is that Bathla won't be remembered as an isolated collapse, but as the first domino to fall.

Best and worst sectors

Energy was the best-performing sector this week, rising more than 3% as escalating Middle East conflict pushed Brent crude above US$100 a barrel.

Supply disruptions supported oil prices, providing a tailwind for Australian oil producers.

Utilities gained 0.27% as investors sought more defensive businesses while the broader market sold off.

Materials rounded out the top three, down 0.29%, as the broader sell-off caught major miners amid inflation and interest rate concerns. However, record copper prices supported miners earlier in the week, helping cushion the sector's decline.

At the other end of the market, Information Technology was the weakest sector, falling more than 6% as rising oil prices fuelled inflation and interest rate fears, weighing on sector heavyweights such as Xero and WiseTech.

Consumer Discretionary was the second-worst sector, dropping more than 4% as higher fuel costs and interest rate fears threatened household spending.

Consumer sentiment also dropped 5.2%, adding to concerns that Australians would cut back on non-essential purchases.

Consumer Staples rounded out the worst performers this week, falling more than 3% as it was caught in the broader sell-off, with oil-driven inflation and interest rate fears weighing on shares.

Best and worst stocks

Whitehaven Coal led the ASX Top 100 this week, climbing more than 5% as Middle East energy disruptions supported the outlook for coal demand.

The IEA now forecasts record global coal consumption in 2026, reinforcing that backdrop.

Downer EDI followed, rising 3.92% as ongoing share buybacks may have helped support its rise this week, with the company reporting further purchases of its own shares.

Santos rounded out the leading performers, gaining 3.9% as escalating Middle East tensions pushed oil prices higher and supported its earnings outlook.

At the other end, Xero was the weakest performer, falling more than 13% as oil-driven inflation and interest rate fears weighed on technology stocks.

Higher rates reduce the value investors place on future earnings, pressuring growth companies such as Xero.

Westgold Resources followed, falling more than 10% despite a strong week for gold stocks.

Having outpaced the gold price in recent weeks, its pullback could reflect short-term profit-taking rather than a more serious change in trend.

WiseTech Global rounded out the worst performers, falling 9.87% and getting caught in this week's retreat from growth stocks as rising oil prices reignited fears of further rate hikes.

All Ordinaries Index update

The All Ordinaries Index sold off again this week, falling more than 2% by Thursday's close as escalating conflict in the Middle East and rising oil prices weighed on sentiment.

The index is now sitting near the critical 9000 level, making this a genuine make-or-break point for the market.

The significance of 9000 goes beyond it being a major psychological support level. It also aligns with the longer-term uptrend established from the March 2026 low, which the market has respected ever since.

If buyers step in and drive a strong rebound, this decline may ultimately prove to be another healthy correction within the broader uptrend.

However, a decisive break below both 9000 and the uptrend would send a far more concerning signal.

Unsurprisingly, Information Technology led the market lower, falling more than 6%.

Technology is one of the market's more risk-sensitive sectors, making it particularly vulnerable when oil prices rise, uncertainty increases and investors become less willing to hold higher-growth stocks.

Next week should provide greater clarity.

The market will either find support and rebound or break lower, with the outcome potentially determined by events unfolding thousands of kilometres away. For Australian investors, 9000 is now the level that matters most.

When Qantas shareholders gathered in Melbourne in early November 2023 for the airline's annual general meeting (AGM), it was clear that it wasn't going to be a run-of-the-mill event.

After months of negative headlines surrounding flight delays, COVID credits and the multi-million dollar payout received by former chief executive Alan Joyce, shareholders were clearly fed up.

In a major backlash, nearly 83% of shareholder votes were cast against the company's remuneration report outlining how much the top executives and directors were paid.

The airline ultimately avoided a second strike in 2024, which could have resulted in a board spill, after major changes to its leadership team and a cut to the exit payout received by Joyce.

While the Qantas case is among the more high-profile examples because of the backlash it received, it's just one of the thousands of resolutions put to shareholders of Australian companies at AGMs each year.

From executive pay and board appointments to climate-related proposals, these votes can have significant consequences for companies and investors alike.

Boards and investors are only part of the story, though. Behind the scenes, proxy advisers and shareholder advocacy groups are also busy shaping the direction of Australia's largest businesses.

Welcome to proxy season.

What is proxy season and when does it happen?

In Australia, AGMs for listed companies tend to cluster in October and November.

This period, as well as the months leading up to it, is often referred to as proxy season.

Under the Corporations Act, public companies are legally required to hold an AGM within five months of the end of the financial year, which for many firms is June 30.

Increasingly, companies give shareholders the opportunity to participate in AGMs by attending in person or joining online.

But for those who can't, or don't want to, attend an AGM and vote on resolutions themselves, there's an alternative: proxy voting.

"A proxy allows a shareholder to appoint another person or organisation to attend and vote at a company meeting on their behalf," Rachel Waterhouse, chief executive of the Australian Shareholders Association (ASA), explains.

"The shareholder remains the owner of the shares and can either direct how the proxy must vote on each resolution or leave the vote open for the proxy to decide."

Proxy votes can be used by regular shareholders, but also by large institutional investors, such as superannuation funds and fund managers, with extensive holdings across companies.

Because of the scale of their holdings and the number of resolutions they have the chance to vote on, institutional shareholders often rely on third parties known as proxy advisers to research resolutions, evaluate issues and provide recommendations on how to vote.

What do shareholders vote on at AGMs?

AGMs provide shareholders with one of the main opportunities to have a say on resolutions put forward by companies, as well as proposals successfully placed on the agenda by shareholders themselves.

Common issues that come up for voting range from director elections to mergers, capital raisings and changes to a company's constitution.

But the topic that typically attracts the most attention, and often the most controversy, is executive remuneration.

This is partly because executive pay, bonuses and share options tend to be a relatable and attractive target for criticism among disgruntled shareholders.

But as Paul Murphy, head of governance advisory APAC at Georgeson, explains, it's also because of Australia's 'two strikes' mechanism.

"If a company gets more than 25% of the vote against the disclosure of how they do their executive remuneration, that's called a strike.

"If that happens at two AGMs in a row, a second strike, then the entire board could be spilled and have to go for re-election.

"It's become a bit of a generic protest vote for investors to push back on things that they don't like about companies."

While a first strike has no immediate consequences, even the prospect of a second strike is often enough to get a board's attention and precipitate change, as was the case following the Qantas AGM in 2023.

"You'll find that most companies are very keen to avoid getting a strike, or getting a second one if they've already had the first, because they attract a lot of media attention, so it's really a reputation management thing for them," Murphy says.

Another prominent voting issue for shareholders is the re-election of existing directors or election of new nominees.

Murphy notes that it's typical for board-nominated directors to receive about 95% approval, so anything significantly below that level can indicate shareholder dissent.

"It's a bit of a signal if a company is putting four directors up and three of them get 95% support and one gets, say, 75%, that there is something going on there.

"We'll typically attribute that kind of outcome to shareholders, especially institutional shareholders, holding an individual director accountable for something they're not happy with.

"That might be the diversity profile of the company, not having enough gender diversity on the board.

"Or it might be because they're the chair of, say, the remuneration committee, and investors are not happy with the remuneration structure."

How shareholder activists influence company decisions

Executive pay and board elections may attract the most attention during proxy season, but they're not the only issues that come before shareholders.

In some cases, investors themselves attempt to shape the agenda with their own resolutions.

"More broadly, shareholder proposals are something that we've seen a little bit of over the years in Australia," says Murphy.

"Often they've been put up by environmental activists or NGOs, most commonly around climate disclosure issues."

Pressure on companies to address issues such as climate change, environmental risk and other social concerns has come from both retail and institutional investors.

But much of the coordination and campaigning has been led by shareholder advocacy and activist groups.

One of the organisations at the forefront of efforts to push issues like these into the spotlight is the Australasian Centre for Corporate Responsibility (ACCR), which does everything from conducting research and analysis to filing shareholder resolutions.

But as ACCR co-chief executive Brynn O'Brien explains, shareholder activism isn't limited to focusing on high-profile AGM votes.

A significant part of the work involves engaging directly with companies throughout the year.

"ACCR has been a shareholder in some major Australian listed companies for over a decade: BHP, Rio Tinto, Woodside and AGL, to name a few.

"We meet fairly regularly with these companies, speaking to thematic experts, executives and board members. We share our views, we hear theirs.

"This is called engagement. Sometimes this influences how they're operating or making decisions, sometimes it doesn't. Many institutional shareholders engage in this way."

One notable example of shareholder influence that O'Brien points to is pressure that ACCR, along with a group of local and international institutional investors, applied to companies regarding their memberships of industry associations.

"Many people will remember the political instability of the 2010s when climate policy was repeatedly derailed and successive prime ministers lost their positions amid intense lobbying by fossil fuel interests.

"Some of the most influential industry groups, including the Minerals Council of Australia, were funded by companies such as BHP and Rio Tinto, even as those same companies were presenting themselves to investors as climate leaders.

"We were able to draw attention to that disconnect.

"Shareholder pressure drove companies to apply much greater scrutiny to the positions taken by those industry groups and, in some cases, to impose consequences when those positions diverged from the companies' own stated commitments."

What do proxy advisers do?

At the heart of proxy season is another set of influential players: proxy advisers.

Global firms like ISS STOXX, the parent company behind Money magazine, and Glass Lewis, as well as Australian firms such as Ownership Matters, all provide these services.

"Fundamentally, proxy advisers serve institutional investors by doing the background research to support voting recommendations at company meetings, not just AGMs, but also things like merger transactions where there's going to be a shareholder vote," Murphy explains.

This doesn't mean institutional investors such as super funds and fund managers are handing over their voting decisions.

Rather, they're outsourcing the research that informs those decisions.

"If you were to ask the really big investors, they would say that they're using the proxy advice as a research input," Murphy says.

"It's not efficient for all of them to duplicate that research.

"There's just a lot of underlying data. So, it makes sense to neutralise that factual research element and have a proxy adviser do it, rather than each investor having to duplicate that effort themselves."

So how do proxy advisers arrive at the recommendations they make?

According to Murphy, each adviser has clear guidelines that set out how issues should be assessed.

"There would be statements of principle about how they define when a director is independent, or around director capacity and overboarding risk, or around the practices companies should follow in their remuneration disclosure.

"These kinds of issues tend to be codified into policies, which then drive the way proxy advisers issue research recommendations."

Proxy advisers have courted controversy in recent years, particularly in the United States, with critics suggesting they wield too much influence over how investors vote.

But Murphy says it's important to remember that proxy advisers don't operate in a vacuum because the frameworks they use are developed alongside their clients.

"The policies they operate under are developed in consultation with their subscribers, the institutional investors.

"So you wouldn't be surprised to see a fair bit of coincidence between proxy adviser recommendations and voting decisions.

"I think that's a bit different from saying that proxy advisers are unaccountable people who sit on the side and determine the way institutions are going to vote."

Why proxy season matters for everyday investors

Proxy season and the AGMs that dominate the calendar in October and November provide investors, even those with relatively small shareholdings, with an opportunity to engage with the companies they own.

"It's not just about voting, but turning up and listening to the people that are leading your company and making sure that you're comfortable, as an investor, with the strategy and the way ahead," Waterhouse says.

"It's not to everyone's interest, but we are very passionate about this because we think retail investors should care and should vote."

What many shareholders may not appreciate is that, in addition to voting, they have a number of rights they can choose to exercise during AGM season.

"Some rights can be used individually, like voting, nominating directors or asking questions. Some are collective rights, like filing shareholder resolutions and members' statements," explains O'Brien.

"These rights and the expression of shareholder voice that goes along with their use contribute to a healthy corporate governance environment and a well-functioning market.

"If companies or governments try to erode these rights, AGM season is often where that becomes most visible."

As the Qantas case demonstrated, when there's enough shareholder engagement and passion directed towards a particular issue, it can force a company to listen and act.

While direct shareholders may be the only people able to vote on resolutions, they're by no means the only ones impacted by decisions made at AGMs and other shareholder meetings.

Australians with money invested through exchange traded funds or superannuation often have a stake in the same companies, meaning the outcomes can also affect their portfolios and returns.

How to vote and participate in AGMs

The reality is that many Australians who own direct shares simply aren't engaged or interested in the companies they're invested in, beyond the returns they provide.

According to Waterhouse, the proportion of people who take part in AGMs or vote on resolutions is very low.

"You can probably understand that. AGMs are quite long and they're often held on weekdays.

"I went to the Woolworths AGM last year and it went for five hours, so anyone working that day wouldn't have been able to attend."

As the 2026 proxy and AGM season draws closer, Waterhouse has some recommendations for everyday shareholders interested in learning more about the companies they own and engaging more actively with them.

As a first step, she suggests reading company communications.

Annual reports, which provide shareholders with a snapshot of how a company has performed and where it's headed, are typically released during the August reporting season.

It's also worth keeping an eye out for AGM notices that contain information about the timing, location and agenda.

When it comes to the AGM itself, attending in person can be beneficial, but companies are increasingly offering online participation options.

Finally, Waterhouse strongly urges shareholders to consider voting on company resolutions, whether at an AGM or at meetings throughout the year.

Shareholders can also appoint a proxy to vote on their behalf.

That could be an individual they provide directions to, or an organisation such as the ASA, which researches companies and publicly discloses how it intends to vote ahead of time.

"We have a group of somewhere between 100 and 120 volunteers who read annual reports, meet with company chairs and then turn up at the AGM and ask questions," Waterhouse says.

"We also put together a voting intentions report that we make public, whether you're an ASA member or not. This way you can see the way we want to vote.

"So, if you choose to give your proxy to us, your vote will reflect how we see a company, and that's led by the members and investors reviewing it."

Whether it's actively participating in an AGM or simply skimming through the latest annual report, Waterhouse believes becoming more engaged will ultimately benefit many investors.

"By finding a little bit of time to engage with the companies you own, you will only become a better investor.

"And if you're not comfortable with where the company is heading, then you can always move away from it."

Australia's gross domestic product (GDP) growth reached 0.4% in the June quarter, slightly above expectations, although annual growth slowed from 2.5% to 2.1%.

That's the number everyone is talking about, but I'm not convinced Australians should be celebrating just yet.

Look beneath the headline, and a concerning theme emerges about what is driving that growth.

Government consumption rose 0.6%, while public demand accounted for around one-quarter of the economy's quarterly growth.

In other words, government spending helped drive the economy, and that's not necessarily a sign of a strong or healthy economy.

Households also spent more, but much of that increase came from a jump in vehicle purchases, particularly electric and hybrid cars.

At the same time, private business investment fell 0.5%. While investment remained higher than a year earlier, the quarterly result hardly points to a broad lift in business expansion.

This is where I think we need to be careful. Government spending can keep the economy moving, but it doesn't necessarily make the economy more productive or create lasting wealth.

GDP per person was flat during the quarter, while labour productivity fell 0.2% over the past year. So, while the economy is technically growing, the average Australian isn't necessarily getting ahead.

And guess who ultimately pays for all this?

We do.

In the June quarter, government taxation revenue reached $241.3 billion, while total expenses reached $291.5 billion.

Despite collecting an enormous amount of revenue, the general government sector still recorded a $2.8 billion net operating deficit.

The more governments spend without generating enough additional economic growth, the greater the pressure on future taxes, government debt and the cost of servicing that debt.

Then there's the planned Pacific climate meeting, which has faced criticism over more than $19 million in taxpayer-funded event and broadcast costs.

At the time of writing, only five non-Pacific leaders had confirmed they would attend. Whether you believe the event is worthwhile or not, Australians are entitled to ask whether every dollar of government spending is producing sufficient value.

This also creates a headache for the RBA.

Stronger GDP growth can increase the risk that interest rates remain higher for longer or rise again. The RBA is already concerned about inflation and says spending across the economy needs to slow while capacity constraints remain.

For households, this means budgeting carefully for interest rate relief that may not arrive soon.

For investors and traders, it means looking beyond the GDP headline and considering whether company earnings, debt levels and price trends support the positive economic story.

So, I wouldn't get too excited by a 0.4% GDP number.

The real question isn't whether Australia is growing. It's who is doing the growing, how productive that growth is, and how much of the bill is being sent to taxpayers.

Best and worst sectors

Financials were the best-performing sector this week, rising more than 2% as stronger GDP increased expectations of another interest rate rise. This should support bank margins, while investors returned to the major banks after their sharp falls in August.

Healthcare gained under 0.5%, led by CSL after its agreement with the Trump administration reduced uncertainty surrounding US drug prices and potential pharmaceutical tariffs.

Energy also rose under 0.5%, as escalating tensions between the United States and Iran pushed oil above US$90 a barrel.

At the other end of the market, Information Technology was the weakest sector, falling more than 5% as stronger-than-expected economic growth raised expectations of another interest rate rise.

Materials was the second-worst sector, dropping just under 4% as weaker gold prices dragged down the major miners and gold producers.

Consumer Discretionary rounded out the worst performers this week, falling more than 2% as rising oil prices and renewed interest rate concerns threatened to put even more pressure on household budgets.

Investors are becoming increasingly cautious about the retail spending outlook.

Best and worst stocks

Challenger Limited led the ASX Top 100 this week, climbing more than 5% as rising bond yields improved the outlook for returns on the assets supporting its annuities.

Insurance Australia Group (ASX: IAG) followed, rising more than 4% as higher bond yields improved the outlook for investment income earned on the premiums it holds before paying claims.

Suncorp Group (ASX: SUN) rounded out the leading performers, also gaining more than 4% as higher bond yields improved the earnings outlook for its large investment portfolio.

Both IAG and SUN remain supported by reports that Japanese insurer Tokio Marine considers these preferred Australian takeover targets. That said, discussions remain uncertain, and no deal has been confirmed.

At the other end, Greatland Resources was the weakest performer, falling more than 9%.

This occurred as rising global bond yields pushed gold prices lower and triggered a broad sell-off across Australian gold producers.

With no major negative company announcements, the decline was driven mainly by weaker sentiment towards the gold sector.

NEXTDC Limited followed, also falling more than 9% despite reporting higher revenue and a return to profit. Rising bond yields also weighed heavily on highly valued growth stocks.

Investors also remained cautious about the enormous capital required to expand its data centre network and the company's increasing energy and water usage.

SEEK Limited also fell more than 9% as rising interest rate expectations added to concerns about a slowing employment market and the company's earnings outlook.

The stock also traded without entitlement to its 25-cent dividend this week, which contributed to the fall.

All Ordinaries Index update

The All Ordinaries Index fell heavily this week, breaking below the important 9200 level and recording a loss of around 1% by Thursday's close. While the decline may look concerning, it is not entirely surprising given the market had recently reached a new all-time high.

Attention now turns to 9000, which is the next major level to watch.

Importantly, this level also aligns with the longer-term uptrend established from the April 2025 low. The market has respected this trend throughout the broader rise, so I would expect buyers to step in again around 9000.

That makes next week particularly important.

If 9000 holds and the longer-term uptrend remains intact, this decline is likely another healthy correction. However, a decisive break below both would be a much more concerning signal.

Investors got at least some positive news this week, with the Financials sector moving back into positive territory.

This may suggest investors are rotating towards more defensive areas of the market as uncertainty increases, making Financials one of the better places to hide over the next few weeks.

For now, it is a waiting game.

Next week should reveal whether this is simply a normal pullback after a record high or the beginning of a deeper decline.

Either way, further weakness could ultimately create an opportunity to buy quality stocks at lower prices.

Reader question

Hi Paul, I'm a 58-year-old woman based in Brisbane.

Some time ago I thought I'd get some shares in medical marijuana companies.

About a decade later my accountant who does my tax returns suggested selling them, but I need a broker for that right?

I'm obviously not financially savvy or invested enough to do what needs to be done with shares, so how do I divest myself of these piddling little shares that aren't worth a broker's time and fee?

Some are through Commonwealth Direct Investment Account (CDIA) and others elsewhere. - Kirsten

Paul's response

You have given me a good chuckle, Kirsten.

I think we all do this from time to time.

I was sick and tired of some equally 'piddling' individual share investments that seemed a good idea at the time, but are really just an administrative pest.

I went to the share registry for these shares, fortunately they were mainly with the same registry and pressed the sell button.

Pretty poor form, I know, but I barely looked at the cost. It was a big registry, so a fair fee.

A cheaper way would to have been pop them on my banks share trading site and I reckon I could have saved about $60 across my little holding, but given the time involved, I figured it just best to hit 'sell'.

In particular with the new CGT coming in June 30 next year, I can tell you one thing for sure.

I'll be holding shares in low-cost ETFs where I have one price for future CGT calculations.

So check out the share registry for your shares, the companies themselves may offer an 'unmarketable parcel' no-cost buyback, or a low-cost service such as your banks or one of the many external providers.

What to read next

• 29 investing terms every investor should know
• The tax traps when you invest in shares, ETFs and crypto
• What you need to consider before selling shares
• The risks of 'sexy investing'
• Ozempic, medicinal cannabis and the rise of vertical healthcare

That is why we look for companies that provide critical infrastructure for major structural shifts. In the global energy transition, NKT A/S (NKT: DC) is such a linchpin in its sector, electrical transmission grids.

Electric grids are under pressure to deliver to three areas of exponential demand growth: the need for renewable generation, wholesale EV adoption, and the boom in data centre and AI demand.

According to the International Energy Agency (IEA), the world must add or replace 80 million kilometres of power lines by 2040 - effectively doubling the existing approximately 40 million km global grid to prevent severe transmission bottlenecks - in order to connect the generators with their customers in these new economies.

This has created a material operational bottleneck.

High-voltage direct current (HVDC) subsea and underground cable manufacturing is concentrated among a small number of major Western players: NKT, Prysmian, and Nexans.

Barriers to entry are high.

It takes over three and a half years to bring new capacity on line, manufacturing facilities are capital-intensive and specialised cable-laying vessels are scarce, making it almost impossible for current industry capacity to meet kilometre demand targets.

The trio of grid companies is booked solid for the next 10 years, leaving a structural deficit that cannot be bridged.

While Prysmian and Nexans are formidable legacy giants, in our view, NKT is the superior investment vehicle for exposure to the HVDC grid boom given its pure play HVDC focus, capital efficiency, and execution track record.

Cable manufacturers previously operated as low-margin commodity price takers, accepting slim terms just to maintain plant utilization. That dynamic has completely inverted.

Transmission system operators (TSOs) like TenneT (Netherlands/Germany), and 50Hertz (Germany) are no longer running standard procurement tenders.

Instead, they are locking in massive multi-year framework agreements and paying NKT capacity reservation fees and forward progress payments. TSOs do this to guarantee factory slots and secure cable-laying vessels years in advance.

These arrangements can fund NKT's capital expenditure upfront, reduce balance sheet funding risk and improve NKT's pricing power.

As high-margin HVDC projects step up in execution and new capacity comes online, NKT's operational earnings before interest, taxes, depreciation and amortisation (EBITDA) margins are expected to expand toward approximately 20%.

Based on current assumptions around pricing, customer-funded capex and project execution we believe that NKT's return on capital employed (ROCE) could increase from aproximately 12% today to over 24% over the next five years.

That is a pretty compelling statistic, in our view.

The grid replacement cycle in Western economies is a multi-decade affair.

On two-year forward consensus estimates, as recent capacity investments ramp to full output, NKT trades at an attractive approximately 10x-12x EV/EBITDA (and under 18x price to earnings ratio).

For a dominant pure-play business with customer-financed capital expenditure, a €13 billion-plus order book and exposure to long term grid investment, we view the current valuation as attractive relative to the potential earnings growth opportunities - we thought that might excite you.

1. Shein on the stock exchange - should you invest in the fast fashion retailer?

Fast fashion retailer Shein has announced plans to list on the Hong Kong stock exchange next week, targeting a valuation of almost US $27 billion.

It comes after the company's previous attempts to list on US and UK markets failed amid regulatory scrutiny and after the value of the business fell from $100 billion in 2022 amid growing tariffs and competition.

In documents filed with the Hong Kong exchange, Shein said it would be offering almost 280 million shares for between $8.45 and $8.79 AUD each when it lists on Tuesday.

Aussie investors will be able to buy shares on the secondary market after the IPO, but experts are quick to note Shein isn't the commerce disruptor it once was.

"Growth has slowed sharply, customer acquisition and fulfilment are getting more expensive, trade rules that supported Shein's cross-border model are changing... [and] competition is intense," says Merline McGregor, managing director ANZ for ecommerce consultancy Pattern Australia.

Rob Talevski is the CEO of Webull Securities Australia, one of the brokerage platforms where Shein shares will be available to Aussie investors.

He agrees that the company has struggled in recent years and expects its share price to fall below the $8-9 figure the company has quoted, but says it could recover from then on.

"Personally, I think Shein is a long-term opportunity. If there is any exuberance around the IPO in terms of share price, I think that will be short lived," he says.

"I think the price will come off and then when the dust settles and Shein's able to sort out its expansion and technology plans with the war chest that it accumulates... I think then you'll start seeing stabilisation of the stock price and potential upside in time."

2. Farmers warn bird flu could make eggs a 'luxury product'

The President of the NSW Farmers Federation says eggs could become an "expensive luxury product" if the current bird flu outbreak spreads into lots of chicken farms.

Asked at the National Bush Summit on Wednesday what would happen if the H5N1 strain got into commercial poultry farms "at scale", Rebecca Reardon had a warning for Aussie egg lovers.

"If [the outbreak] is ongoing and we see it over the next few years, we're going to have supply going up and down and something as simple as eggs will become a luxury product and expensive," she said.

Reardon's comments came as Australia reached 341 recorded cases of H5 bird flu, all in wildlife.

No cases have yet been found in poultry or other farm animals, but experts have told Money they expect the new strain of the virus to impact chicken farms at some point.

A single case on an egg farm can impact supply because farmers may cull a large number of birds to stop the spread of the highly-contagious virus.

An outbreak of a different strain of bird flu in Australia between 2024 and 2025 saw 10% of the nation's laying hens culled and egg prices rise by almost 20%.

3. Credit card holders vent at bank squeeze

Credit card customers at Australia's big banks are complaining about new fees, higher rates and diminishing perks as the payments industry faces a shake-up in coming months.

People with credit cards issued by Commonwealth Bank, Westpac and St George have taken to Reddit to vent about the incoming changes, which one lender is blaming on the Reserve Bank's decision to ban surcharges on card payments from October 1.

Several customers say they've been told their card will incur international transaction fees and they'll lose access to complimentary travel insurance from the end of September, throwing holiday budgets into chaos.

"I got [this] card for when I went to America this year and it worked great. [I'm] going to Asia for three months at the end of the year and this has put a dint in my plans big time," said one contributor to a Reddit discussion about Commonwealth Bank's Smart Awards card.

All of the big four banks have unveiled changes to their credit cards, including increases to interest rates, higher fees, caps on rewards points and overhauls of loyalty schemes.

Some online users have questioned whether the incoming ban on surcharges is driving the changes, while others accused the banks of using the ban as an excuse for inflicting enshitification on card customers.

In explaining its credit card changes, Westpac said the new surcharge rules were behind the shift.

4. Aussie ski businesses struggle amid warm winter and low yen

A warmer than average winter has hit Australia's major ski resorts hard, with one operation long associated with snow holidays now considered less of a valuable going concern.

It comes as a weak yen has eased the costs of a trip to Japan, considered to have a wider choice of more reliable snowfields.

This week hotel group EVT revealed an independent valuation of its Thredbo Alpine Resort had come back at $143 million, a sizeable drop from the previous figure of $292 million.

EVT said this was due to poor trading conditions and the need to spend more on chairlifts and snowmaking infrastructure. It said a lack of natural snow throughout June and July had also hit the business.

Some resorts in Victoria and NSW have already closed for winter activities amid reports of snow levels being significantly lower than in previous years.

Winter has also seen the Australian dollar hit a multi-decade high against the yen.

And while that milestone did come during Japan's summer, Aussies who chose to head to the country in January for their skiing fix would have, even then, enjoyed some of the best exchange rates in years.

5. AI data centres could drive up power prices

A federal government assistant minister has warned households and businesses could end up paying more for energy if AI data centres are allowed to draw electricity from coal or gas powered-plants.

The intervention comes as the Australian Energy Market Operator (AEMO) says it expects data centre electricity use to increase sevenfold over the next decade.

AEMO expects the facilities to be responsible for 13% of electricity use in Australia's eastern states and South Australia by 2035, up from 3% today.

Speaking to The Conversation, cabinet secretary and assistant minister for science, technology and the digital economy Andrew Charlton said allowing data centres to be powered by fossil fuels would lead to higher power bills for households and businesses.

"If we allow data centres to draw on finite sources of energy, they will inevitably put upward pressure on the price of those finite sources," he said.

AI data centres have become a lightning rod issue in some communities, with residents fearing the buildings will take up valuable land and the computer hardware housed within will consume too much water and electricity.

Find better stocks, take more risk and chase higher returns, but that might be looking at the problem from the wrong angle.

If retirement is potentially less than 20 years away, one of your biggest risks isn't failing to find the next big winners.

It's suffering a major loss and spending years trying to recover. The maths explains why.

Imagine you have $100 invested and the market falls 50%; you're left with $50.

If the market then rises 50%, you're only back to $75. To turn that $50 back into $100, you need a 100% return.

That's why avoiding even part of a major downturn can make such a difference.

Take two hypothetical investors, John and Sally, who both invest $10,000 in the Australian share market 10 years before the Global Financial Crisis in 2007.

Using the S&P/ASX 200 price index from November 1997 to November 2017, John remains fully invested, and his $10,000 grew to around $24,600.

Sally invests in the same market but approaches risk differently. Rather than trying to predict the top, she watches the market's long-term trend.

Think of it as drawing a line underneath the major lows as the market rises.

If price breaks clearly below that line and continues falling, it's a warning that the trend has changed, so she moves to cash.

She doesn't try to pick the exact bottom. She waits until the market stops falling, starts turning, and a new upward trend begins to form before getting back in.

Using the GFC as an ideal example, exiting around the 2007 market peak and re-entering around the 2009 low would have turned Sally's $10,000 into approximately $53,500 by November 2017.

Same starting capital, same market, but she more than doubled John's return.

The point isn't that Sally picked the top and bottom perfectly, she didn't need to.

It's that you don't need to be a market genius to see that prices had stopped rising and started falling. And in 2009 it became evident that prices had stopped falling and started recovering, that's the real lesson.

As you approach retirement, time becomes just as important as return.

At 25, you potentially have decades to recover from a major market collapse. At 45, 50 or 55, losing years rebuilding your portfolio can dramatically change your retirement.

So rather than only asking, "How can I make more money?", perhaps there's another question that's just as important: "How do I avoid losing what I have already accumulated?"

If you're over 40 and trying to make the next 20 years count, protecting your capital during major downturns is far more valuable than finding the next hot stock.

Best and worst sectors

Consumer Staples was the best-performing sector this week, rising more than 1.5% driven by better-than-expected results from supermarket giants Coles and Woolworths.

Both delivered strong profit growth and improving margins, while renewed interest rate concerns also encouraged investors back towards more defensive areas of the market.

Materials gained 1.5% as stronger commodity prices across iron ore, copper, gold and lithium drove broad buying across the major miners.

Healthcare rose more than 1%, helped by a strong result from Ramsay Health Care, which delivered 23% underlying profit growth, which saw its shares surge around 15%.

At the other end of the market, Information Technology was the weakest sector, falling 2.71% as WiseTech fell around 10% after its FY26 result.

In addition, hotter inflation increased rate hike expectations and put further pressure on highly valued growth stocks.

Communication Services was the second-worst sector, dropping 2.47% as heavy selling in Telstra and REA Group outweighed strength elsewhere.

Telstra is still under pressure following its FY26 result, and REA fell sharply on Thursday.

Consumer Discretionary rounded out the worst performers this week, falling more than 2% as hotter inflation lifted expectations for another RBA rate rise. This weighed on retailers, while Wesfarmers also fell after its earnings result.

Best and worst stocks

Ansell Limited led the ASX Top 100 this week, climbing more than 15% after a strong FY26 result, with adjusted EPS up 17.8%.

Margins also expanded, and management is forecasting further earnings growth in FY27.

Paladin Energy followed, rising more than 14% after strong FY26 results showed revenue up 71%.

Production was at the top end of guidance and costs at the low end, while the business moved into positive operating cash flow.

Ramsay Health Care rounded out the leading performers, gaining more than 11% after a strong FY26 result.

Underlying profit rose 22.9%, margins improved, and management forecast further earnings and margin growth in FY27.

At the other end, Liontown Resources was the weakest performer, falling more than 9% as investors focused on higher costs and heavy spending at Kathleen Valley.

The FY27 cost guidance was disappointing despite strong cash generation.

Endeavour Group followed, falling more than 9% after a weak FY26 result, with underlying profit down 14.8%. Retail earnings were down 17.6% and the full-year dividend cut 36%.

Sigma Healthcare Limited also fell more than 9% despite a strong FY26 result. Investors focused on cash conversion, integration costs and whether future growth can justify its high valuation.

All Ordinaries Index update

As we close out August, the All Ordinaries Index is down 0.29% so far this week.

It started strongly, with buyers pushing the market towards 9400, but Thursday's selling saw the index retreat towards last week's low and the all-important 9200 level.

That makes 9200 the key level to watch. If it holds again, sellers will have had two attempts to push the market below this level and failed.

That would strengthen the medium-term bullish picture and suggest buyers are still willing to step in on market pullbacks.

Interestingly, August is normally an average month seasonally, yet this year it has been one of the stronger months, alongside April, July and November.

This suggests reporting season has ultimately delivered more positives than negatives for the broader market.

The next test is September, which historically ranks as the second-worst month of the year. As such, we could see volatility pick up and some of the stocks that have run hard begin to pull back.

That could also create opportunities elsewhere. Stocks that were heavily sold during reporting season may start to recover as money rotates out of the recent winners and into areas offering better value.

For now, the broader picture still looks increasingly bullish, particularly among larger-cap stocks.

The next area I'm watching closely is the mid and small-cap space. If the broader market keeps pushing higher, these stocks could be the next part of the market to catch up.

Why we like Henkel shares

Henkel is a high-quality, cash-generative business anchored by the adhesive technologies unit, the global leader in adhesives, sealants and functional coatings.

Its leading positions, technical expertise and deep customer integration support average organic growth of around 4% and margins in the high teens, with exposure to secular growth in electronics, EVs and industrial applications.

The other key business unit, consumer brands, holds leading positions in hair and laundry care and is becoming more focused and profitable following years of restructuring and portfolio simplification.

Henkel converts most earnings into free cash flow and returns surplus cash through a growing dividend and opportunistic buybacks.

The investment case rests on both segments delivering sustainable 3% to 4% organic growth, led by the adhesives unit, supplemented by inorganic growth from recent acquisitions (mid to high single-digit growth) and steady margin expansion.

About Henkel

Henkel is a German multinational chemical and consumer goods company headquartered in Düsseldorf, Germany.

The company employs about 50,000 people worldwide, with more than 80% of staff based outside Germany, including in Australia.

The company has two key business units: adhesive technologies and consumer brands. Its consumer brands portfolio includes Schwarzkopf, Dynamo and Sard across the hair care, laundry care and home care categories.

Strategy and outlook  

Adhesives should benefit from structural growth in electronics and a recovery in broader industrial demand, while consumer brands should improve as hair remains strong and laundry care returns to growth.

Recent acquisitions across both segments provide an additional growth lever.

Margins should expand modestly, primarily from volume growth and a favourable mix, although near-term raw material inflation could temper progress.

We expect capital allocation to remain disciplined, with strong free cash flow generation supporting a robust balance sheet and continued shareholder returns through a growing dividend.

Returns 

At a share price of about €78, Henkel trades on around 13.5 times FY26 earnings and offers a free cash flow yield of around 7%, towards the cheaper end of its historical range and at a discount to both adhesive and home and personal care peers.

We expect mid single-digit earnings growth from low single-digit organic growth, acquisitions and modest margin expansion.

Combined with a dividend yield of about 3%, this provides the potential for solid shareholder returns while waiting for valuation normalisation over time.

Our fair value estimate of around €89 assumes 13 times EV/EBIT, consistent with periods of similar EBIT momentum and implying about 16 times earnings and a free cash flow yield of about 6%, which we believe is reasonable for a high-quality, cash-generative business.

We're still talking about inflation, weak growth, geopolitical risk and whether markets have run too far. Yet beneath those concerns, some of Australia's biggest companies appear to be preparing for something very different.

Look at where the money is flowing. BHP's latest result showed copper overtaking iron ore as its largest earnings contributor. Rio Tinto has delivered $870 million in productivity benefits while increasing its exposure to copper, aluminium and lithium.

Across the sector, investment continues to flow into copper, lithium, rare earths and critical minerals. These aren't decisions made for the next quarter. They're bets on where demand could be years from now. We're also seeing important changes elsewhere.

After a difficult period, CSL expects underlying profit to grow in FY27 despite broadly flat revenue. AGL is forecasting stronger earnings as its battery portfolio expands and costs fall. Then there are interest rates.

The RBA expects inflation to move back towards its target over time. Meanwhile, CBA is forecasting two rate cuts in 2027. If rates fall while companies emerge leaner and more efficient, the combination could be powerful.

So, what would I be doing with this information? I'd watch for companies demonstrating three qualities: falling costs, improving earnings potential and investment in areas where future demand is growing.

Not because 2027 is guaranteed to be a great year. Rather, this reporting season is providing an early look at where corporate Australia is placing its bets.

The headlines remain focused on what could go wrong. Yet some of Australia's biggest companies are spending billions on what they believe will go right.

That is the part of this reporting season I wouldn't ignore.

Best and worst sectors

Healthcare was the best-performing sector this week, rising more than 11%. The gain was driven largely by an impressive result from its biggest constituent, CSL Limited.

Materials gained more than 5%. Investors responded positively as mining giants including BHP and Rio Tinto continued shifting towards higher-growth commodities. This helped offset the effect of weaker iron ore.

Energy also rose more than 3%. Another surge in oil prices supported the sector as instability surrounding the Iran conflict continued.

At the other end of the market, Financials was the weakest sector, falling more than 5%. Selling continued from the previous week as reporting season weighed on sentiment towards the sector.

Consumer Discretionary dropped more than 4%. JB Hi-Fi's result triggered a broader sell-off across retail stocks.

Consumer Staples fell more than 2%. The recent weakness may reflect short-term profit-taking after the sector's strong run earlier this year.

Best and worst stocks

CSL Limited led the ASX Top 100 this week, climbing more than 25% following its FY26 result. The market responded positively to the company's major restructuring plans.

Pro Medicus followed, rising more than 15%. Another strong FY26 result reassured investors that its underlying growth story remains firmly intact. Evolution Mining rounded out the leading performers, gaining more than 14%.

The company delivered a record FY26 result, supported by another strong rise in the gold price.

At the other end, JB Hi-Fi was the weakest performer, falling more than 14%. Despite record FY26 sales, investors focused on weaker recent trading and its implications for FY27 growth.

Aurizon Holdings followed, falling around 13%. Expectations of lower coal earnings in FY27 overshadowed an otherwise solid result. HUB24 also fell more than 12% despite delivering strong earnings growth.

After a significant rise in recent years, its share price is now trading sideways. Investors are now weighing how much future growth is already priced in.

All Ordinaries Index update

The All Ordinaries Index finished almost flat, falling just 0.16% this week. However, the most important move came on Thursday.

After drifting lower earlier in the week, the market tested the 9200 level we've been highlighting.

Buyers then stepped in and pushed the market higher. That initial reaction is encouraging and reinforces 9200 as the key level to watch. If it fails to hold, 9000 becomes the next important support level.

Interestingly, Healthcare was the strongest-performing sector this week, led by CSL. Materials also performed strongly.

That is encouraging given the significant volatility we've seen in individual stocks throughout reporting season.

Only a couple of weeks of reporting season remain, and most major companies have now released their results. We should therefore see volatility begin to settle.

This should also provide a clearer picture of where the market wants to head next. The market's underlying structure looks considerably different from what we saw earlier this year.

The recent weakness still resembles a retracement within a broader bullish move.

At this stage, it doesn't appear to signal the beginning of something more serious. The market's reaction around 9200 is now crucial and, so far, it's positive. If buyers continue defending this level, it will strengthen the bullish case.

It could also position the market for a healthy finish to the year.

Many years ago, when I first started as an aspiring stockbroker in London, it was a very different game.

Commissions were fixed.

To become a client of a stockbroker, you almost had to be invited into an exclusive club. For those outside that club, the stockmarket was seen as little more than a casino where rich people gambled, sometimes winning, sometimes losing. It certainly wasn't viewed as a mechanism for building wealth for ordinary people.

Prices moved glacially. Things happened far more slowly. Trading floors and telex machines were churning out market-moving news from far-off countries.

Price discovery relied on an army of young pem ople armed with clipboards and comfortable shoes walking around the floor of the London Stock Exchange.

Things were slightly different in Australia, but there was still a trading floor and the market was still largely considered a plaything for the wealthy.

Of course, all that has changed over the past four or five decades.

Markets are now accessible to almost everyone, at any time of the day or night and, in many ways, they have become far more like the casino they were once perceived to be.

The gamification of investing has been astonishing.

Wall Street and other financial centres have continued to innovate, constantly finding new ways for clients to make and lose money, while the investment banks clip the ticket all the way through.

When I was a young broker, we focused on company fundamentals, searching for news that could trigger a re-rating.

Charting was viewed as something akin to astrology, with technical analysts poring over enormous sheets of graph paper, filling in boxes and joining the dots.

How technology changed investing forever

Today, everyone can be a technical analyst. Everyone has access to sophisticated charting software. Everyone can overlay their favourite indicators and chase momentum.

It is fair to say that momentum has fundamentally changed the way markets trade. Long gone are the days when valuations and price-earnings (PE) ratios dominated the conversation. Today, leverage, momentum and the path of least resistance often seem to matter far more.

We have completely gamified the markets, and I am not convinced that is a good thing.

We have seen the risks of crowded trades, excessive leverage and momentum investing on numerous occasions, from the dotcom boom at the turn of the century, to the global financial crisis (GFC) and, more recently, the extraordinary rise in semiconductor stocks.

Eventually, the bubble bursts and markets suddenly look far more vulnerable than anyone imagined.

Take South Korea. The Korea Composite Stock Price Index (KOSPI) has become extraordinarily volatile for what is supposed to be a broad market index. We have seen it rise 10% in a single day, only to fall 10% the next. That is not normal behaviour for an index. It is the sort of volatility you expect from a highly leveraged gambling vehicle.

Even the regulator responsible for approving some of these leveraged products now reportedly regrets allowing that level of risk to permeate the market.

Concentration risk has become a massive problem, with a few stocks dominating not only the US market but also global markets.

The rise of ETFs has seen passive money flow like a torrent into the same names, feeding on itself and pushing those prices ever higher in a self-fulfilling spiral.

Which is always fine when stock prices are going up, but as things turn, that spiral can quickly turn into a graveyard spiral, where investors 'lose contact with the horizon' and experience 'spatial disorientation'. It is easy in this situation for investors to react in a manner that increases the risks and dangers and accelerates the market towards the 'ground'.

In this environment, it is more important than ever for retail investors to understand what sort of investor they really are.

Knowing where you sit on the investment spectrum makes life much simpler. It requires a little honesty. You need to understand your motivation, your risk appetite and, perhaps most importantly, your own personality.

In an age where so much of life plays out online, it's easy to forget that there's a physical nervous centre behind almost every digital interaction you have.

Every email you send. Every tap of your debit card. Every photo you upload. All that information will either be stored in or processed through a data centre.

While their prominence may have grown, data centres aren't new. What is considered to be one of Australia's first data centres was opened by Macquarie Telecom (now Macquarie Technology Group) in Sydney back in 2000.

There are now 162 data centres operating across the country, according to a report released by Data Centres Australia in April. The same report indicates that a further 90 are in the pipeline, with the vast majority set to be built in NSW (44) and Victoria (30).

Australia is also emerging as one of the most attractive destinations for data centre investment, with Knight Frank research ranking it second only to the US in 2024, attracting about US$6.7 billion ($9.55 billion) in investment.

"There is huge uptake globally, but Australia is very appealing for data centres," says Associate Professor Joel Gilmore, an energy expert at Griffith University.

"We have a strong and stable regulatory environment; we have land available with proximity to fibre cables; we have a strong grid; and we have the ability to develop new renewables at scale.

"We are also strategically well positioned for Asia-Pacific connections, so strong links to the Asian market, which is helpful for data centres trying to minimise lag and maximise transmission."

What do data centres do?

At their simplest level, data centres are factories of computing power, explains Dr Amr Omar, a research associate at the School of Mechanical Engineering at UNSW.

They house the hardware that facilitates the storage and processing of all that digital information that forms a part of everyday life.

"When you use Netflix or stream online, these videos are stored in data centres. You're pulling that data from these factories onto your phone or your TV when you go to watch them. And that process happens very quickly, in a fraction of a second," says Omar.

Inside these facilities, that computing power and speed is made possible with racks and racks of servers, CPUs (central processing units) and, increasingly, GPUs (graphics processing units).

"You have some servers that are only for data storage, so banking systems, government data storage, or files in the cloud," says Omar.

"Then you have CPUs that are dedicated to simple computational needs, like sending emails, and GPUs that are mostly used for AI."

Scaling up: The cloud, AI and data centres

As our digital appetites have increased over the years, so too has the scale and sophistication of the data centres being built to serve those needs.

The advent of cloud computing triggered the first shift. As organisations and individuals moved onto the cloud, warehouses packed with servers began to replace individual server rooms in offices.

AI has changed the game again in recent years, requiring data centres, often purpose-built AI factories now, that can support the prodigious amounts of energy needed to power AI-related processing.

"If you think about a CPU, it can do simple calculations very quickly, while a GPU can do multiple calculations at the same time. This is very important for AI," Omar explains.

"With AI, there's two things happening: every time you send a prompt using ChatGPT, Claude or Gemini, the prompt is used to train the model while also providing an answer to the user.

"These GPUs are far more powerful than CPUs. And because they're more powerful, they use way more electricity. For context, a GPU rack could use at least 10 times more electricity."

With all that electricity comes a great deal of heat that needs to be dealt with.

"As we transition to more powerful GPUs, we use liquid-to-chip cooling where we supply a very cold refrigerant all the way to the server level," Omar says.

"That's important, because as these GPUs warm up, they become less efficient, so you need to make sure that they operate in a very cold environment."

In practice, this all means that data centres are becoming far more than run-of-the-mill warehouses full of servers.

"These modern data centres have all the cooling technology, very powerful power distribution units, power quality sensors, electricity generators, fire suppression systems, all sorts of infrastructure," says Omar.

How much energy do data centres use?

As AI and the data centres that are powering it scale up, their broader energy demands are becoming harder to ignore.

In the 2024-25 financial year, data centres are estimated to have used about 2% of the electricity in the National Electricity Market, a report published by the Climate Council suggests.

That's equivalent to the electricity use of about 700,000 homes.

The same report indicates that the share of electricity used by data centres from the main grid is forecast to rise to 6% by 2030 and 12% by 2050.

"There are data centres that will have more load than our smelters. Aluminium smelters are one of our largest single users of electricity in Australia, and one of these proposed data centres will have 25% more load," says Gilmore.

One of the outstanding questions is how this energy need will be met. As Gilmore explains, if it doesn't come from new supply, that extra demand is only likely to push prices higher for everyone.

"Independent modelling suggests that, based on current projections, if we don't build new capacity, new renewables and firming alongside those data centres, wholesale prices could rise by up to 26%.

"So, if it's not done in a sustainable, controlled way, we will see everyday Australians paying higher electricity bills because of those data centres."

Beyond their appetite for electricity, data centres can also consume significant amounts of water as part of cooling processes. In the worst-case scenarios, Gilmore says the usage can be huge.

"If you use the least energy efficient approach, single data centres can use 16 Olympic-sized swimming pools worth of water every day to cool them.

"But there are much more energy-efficient, water-efficient designs. The best case is closed-loop cooling, like the radiator of your car.

"This is where you fill it up once with one or two swimming pools' worth of water and then you don't need to keep topping up because it uses air-conditioners and circulating water to manage that."

Why investors are paying attention

For all the concerns around energy and water use, the reality is that demand for data centres is exploding in Australia and abroad, and markets are taking note.

In large part, that's because data centres and AI have become inextricably linked, and if there's one theme that has driven investor enthusiasm in recent years, it's AI.

"AI and data centres are really reshaping how the world works. By virtue of that, they're reshaping how most stock indexes look today," says Samy Sriram, market analyst at Stake.

The best example of this impact can be seen in the S&P 500 index. As Sriram points out, tech giants and major players in the AI space, such as Alphabet, Amazon, Apple, Broadcom and Nvidia, have been responsible for much of the recent growth in the index.

"Excluding those big tech names that are really driving AI, the S&P 500 would be up just 16% in the past two years. But when you add them back in, it's up 42% over that same period."

Predictably, investors are jumping on board, with Sriram noting that there's been a marked uptick in allocations towards the AI thematic among investors on the Stake platform.

"There's definitely a lot of investment and interest from a retail investor point of view in companies at the forefront of AI and data centres. Whereas some of those names in consumer staples, in consumer discretionary and in healthcare aren't seeing quite the same amount of love."

Ultimately, Sriram suggests that the US-listed tech giants involved with AI, including in Australia, may be among the better options for investors wanting to get exposure to data centres and AI more generally.

"For Australian investors, that could look like investing in mega-cap stocks like Nvidia, Microsoft, Amazon and Google, which are really driving this narrative, committing to AI spend and directly funding Australian capacity.

"These companies have trillions of dollars in market cap, they have a large portion of cash on their balance sheet, and while their capital expenditure is high, the risk of investing in them is perceived by many investors to be a lot lower, because you're getting a much bigger stock."

How can investors get exposure to Australian data centres?

There are investment opportunities beyond the mega caps, including at home. While the options aren't extensive, it's possible for investors to gain exposure to the local data centre industry by way of Australian-listed companies and funds.

NEXTDC (ASX: NXT)

Along with the likes of AirTrunk and Canberra Data Centres, NEXTDC is one of the largest players in the Australian data centre space, with the firm currently operating 17 data centres. It also has five more in the pipeline.

The difference is that NEXTDC is listed on the Australian Securities Exchange (ASX), which makes it one of the better options for investors looking for direct exposure.

"If you're looking at a single stock in Australia, it would probably be NEXTDC. It's the country's largest pure play data centre operator," says Sriram.

"It offers hyperscale-grade capacity, and it has headline partnerships with higher potential upside, but also higher capex risk that comes with that."

Macquarie Technology Group (ASX: MAQ)

While ASX-listed Macquarie Technology Group isn't solely focused on the space, data centres are one of the four core parts of the business along with cloud services, government and telecom.

"Macquarie Technology Group is another name that comes to mind. It's a government-certified operator that serves about 42% of Federal agencies," says Sriram.

"It has a new 47-megawatt Sydney facility on track for September, and its stock price has done fairly well, up about 18% in six months to June."

Goodman Group (ASX: GMG)

Given that a lot of the data centres operating in Australia are foreign owned, Sriram says that a more roundabout way to get exposure to the local sector is through real estate.

"The companies involved in building these data centres out, and responsible for the real estate behind that, are actually seeing a lot of investor interest at the moment.

"Goodman Group is one name that comes to mind. It's a large, listed property group, and about 68% of its $12.4 billion development pipeline was data centres, as of last September.

"It is a little bit more volatile, but that tends to happen with certain stocks like Goodman and real estate investments in general."

Global X AI Infrastructure ETF (ASX: AINF)

Beyond individual stocks, investors can also tap into the data centre boom through thematic exchange traded funds (ETFs), which can provide exposure to companies involved in the broader ecosystem.

One example is the AI Infrastructure ETF from Global X. Launched in April 2025, the fund is up more than 82% as of mid-June.

"The Global X Artificial Intelligence Infrastructure ETF gives investors exposure to companies supporting the data centre build out," Sriram explains.

"These aren't companies running data centres themselves. Instead, they're the copper and uranium producers, the utilities companies and the engineering and material firms that are contributing to the wider build out."

Sydney prices are down 4.2%, and Melbourne is down 3.5% over the latest quarter, while the five-capital-cities aggregate has fallen 2.7%.

Sounds ugly, but before declaring another property crisis, investors need to ask a bigger question: is the Australian economy behaving like it's in crisis?

Because underneath the headlines, the picture tells a different story.

Even after the recent falls, the five capital cities aggregate is still up 3.2% over the past year.

Zoom out further, and Australia's real house price index rose around 26.5% between March 2016 and March 2026.

Property has softened, but a correction and a collapse are two very different things.

The latest bank financial year earnings results give us an even better look under the bonnet.

CBA reported a record $10.98 billion full-year cash profit. Mortgage applications have fallen 15% since the budget in May, while ANZ reported a 12% decline.

Yet the biggest revelation in CBA's report was the growth in business lending.

That's important, because if the economy was really falling apart, you'd expect businesses to pull back, unemployment to rise sharply and borrowers to start falling behind on their mortgages.

We're not seeing that combination.

Unemployment remains relatively healthy at 4.4%, while CBA's 90-plus-day home-loan arrears were 0.73% and ANZ's were 0.86%, hardly numbers that warrant panic.

Westpac also said households and businesses continued to demonstrate resilience, although stressed exposures are increasing.

Taken together, the bank results suggest financial pressure is building, but we're still not seeing the widespread distress that would normally threaten the property market.

That's an important distinction, because property markets don't normally crash simply because prices fall for a few months.

The real danger comes when economic conditions deteriorate to the point where large numbers of homeowners can no longer service their mortgages and are forced to sell.

Right now, Australia doesn't appear to be there.

The next question is: could property fall further?

Absolutely. But falling prices can also create opportunities when sentiment becomes more negative than the fundamentals.

As Warren Buffett famously said, "Be fearful when others are greedy, and greedy when others are fearful."

So rather than panic over falling prices, ask yourself: are the fundamentals breaking down or is everyone simply becoming fearful at the same time?

Because if the fundamentals aren't breaking and it's fear that's driving the market, maybe this is exactly the kind of moment Buffett was talking about.

Best and worst sectors

Utilities was the best-performing sector this week, rising more than 6% on the back of strong moves in its largest stocks, including AGL and Origin Energy, which reported FY26 earnings.

Healthcare and Energy both gained more than 3%, continuing their recent form over the last two months.

Energy was particularly interesting despite the sell-off in oil prices, as it rose, suggesting the market may now see value beyond oil price fluctuations.

At the other end of the market, Financials was the weakest sector, falling more than 3% as new loan applications were lower, spooking investors' outlook for the banks.

Communication Services also fell by more than 1%, as Telstra saw a strong sell-off following its FY26 earnings release.

Industrials fell more than 1.5%, suggesting a short-term breather for a sector that has seen resilient buying since May this year.

Best and worst stocks

Cleanaway Waste Management led the gains in the ASX Top 100 this week, climbing more than 14%, due to an attractive takeover proposal from EQT Infrastructure.

This was followed by ResMed Inc, up more than 10%, with buyers holding conviction as the stock starts to recover after years of selling.

Origin Energy gained more than 9%, benefiting from the strong earnings report and FY27 guidance.

Life360 was the weakest performer, falling more than 17% on the back of its FY26 report, which raised concerns about whether the company can deliver the acceleration implied by the upper end of its FY27 targets.

SGH Limited lost more than 10%, and SEEK Limited fell more than 9%, with both companies projecting weaker outlooks in their FY26 reports this week.

All Ordinaries Index update

The All Ordinaries Index took a small breather this week, ending Thursday 0.67% lower after last week's explosive run to a new all-time high.

Given the strength of that rally, this week's decline has been relatively restrained and, for now, looks more like a healthy pullback than anything else.

We've seen the market retreat after reaching record highs before.

When the All Ords broke to a new high in October 2025, it was followed by an 8% decline, while the February 2026 high was followed by a 10% fall.

I'm not suggesting history will repeat itself, but it's a good reminder that pullbacks are a normal part of markets, particularly after a strong run.

That's why 9200 is now the most important level I'm watching.

If the All Ords pulls back towards this level and strong buying emerges, it could prove to be one of the most important signals we've seen all year.

Holding the 9200 level would give greater confidence that the market is finally ready to break free from the sideways grind we've been stuck in since October last year and begin a genuine push towards 10,000 points.

On the reporting season front, it's been so far, so good.

The big three banks have now reported, with nothing significant enough to shake the broader market, while the major miners are still to come.

Utilities were the standout sector this week, helped by strong moves in AGL and Origin Energy, highlighting the sector's ability to pass higher costs through to customers.

So, while the index may have taken a breather this week, there's still plenty happening beneath the surface.

With reporting season creating winners and losers and the market sitting near record highs, opportunities continue to emerge.

For investors who know what to look for, this remains a buyer's market.

I think that's a mistake. Not because inflation is about to surge again, but because the RBA is underestimating the biggest threat facing Australia's economy over the next few years: artificial intelligence.

A recent Goldman Sachs report identified 35 major Australian companies where labour costs have grown much faster than sales, making them prime candidates for AI-driven cost-cutting.

Banks, retailers, healthcare companies, technology firms and industrial businesses are all on the list, and many have already said AI will play a bigger role in improving productivity.

However, these are only the companies we know about.

Across corporate Australia, businesses are no longer just asking who they should hire next; they're asking whether they need to hire anyone at all.

Which brings me to the most important point: are we walking into a recession because this is an efficiency story built around shareholder interests?

If this is correct, then it's easy to understand that a company's top priority is shareholder satisfaction, and there is no better way to keep shareholders happy than rising profit margins.

AI allows businesses to grow revenue while employing fewer people, which is a different challenge for the labour market.

The RBA spent years telling Australians that inflation was above the 2-3% target band and that it couldn't be ignored.

Yet the Reserve Bank is expected to leave interest rates on hold again, largely because inflation has eased while unemployment remains within a range it believes is manageable.

However, the reality is we are sitting at the upper band of what is acceptable, and my concern is where it could be in two years' time.

If Australian companies adopt AI as aggressively as many are signalling this reporting season, unemployment could move above 5% far quicker than traditional economic models anticipate.

By the time the official data confirms that trend, thousands of jobs may already have disappeared.

The RBA has always argued that monetary policy needs to be forward-looking.

If that's true for inflation, it should also be true for employment because I don't think the biggest risk over the next few years is another inflation shock, it will be a jobs shock.

Best and worst sectors

Information Technology was the best-performing sector this week, rising more than 7% on the back of further falls in the oil price.

Materials and Healthcare also performed strongly, gaining more than 6% after attracting buyers as both sectors are coming off double-digit pullbacks and are among the sectors tipped to shine during this earnings season.

At the other end of the market, Energy was the weakest sector, falling more than 2% as weaker oil prices drove demand for oil and gas stocks lower.

Utilities also slipped less than 0.5% as the heavily weighted stocks in this sector continue to exude caution, with prices trading sideways over the last couple of weeks.

Given the uncertainty around the interest rate decision, it's no surprise the market seems to be weighing up this outcome to decide whether utilities are back in play.

Best and worst stocks

Genesis Minerals led the gains in the ASX Top 100 this week, climbing more than 17%.

This was followed by Vault Minerals, up more than 16%, and Greatland Resources, which gained more than 15%, with all three stocks benefiting from the strong overnight rise in the gold price, which appears to have now found a major bottom.

Woodside Energy was the weakest performer, followed by Ampol Limited, with both stocks falling more than 3% on the back of the oil price wobbles.

The Lottery Corporation lost more than 2% as the sell-off continued after sellers took control at the heavily defended $5.70 level and pushed the stock sharply lower.

All Ordinaries Index update

The All Ordinaries Index has finally done it, breaking to a fresh all-time high after surging 3.4% so far this week.

After months of grinding sideways and repeatedly testing resistance, the market has decisively broken through, confirming that buyers are firmly back in control.

What makes this move even more encouraging is that it wasn't driven by just one sector.

Technology, Materials and Healthcare led the rally, while Financials also played an important role.

When multiple sectors are pulling in the same direction, it usually points to a healthier and more sustainable bull market.

The timing couldn't be better, with reporting season now underway.

Markets are clearly looking ahead, particularly to stronger earnings from the Materials sector.

However, this is still a stock picker's market.

Some companies will exceed expectations, while others won't, making careful stock selection more important than ever.

The next key level to watch is 9800, which now becomes the market's next major resistance.

More importantly, the stubborn 9200 level that rejected the market time and time again has finally become support, and that on its own should be reason to celebrate.

Every inflation report and jobs number sparks a fresh round of predictions about whether rates are going up, down or staying put.

However, one of the biggest influences on where rates go next may not be in Australia at all.

It could be nearly 8000 kilometres away in Japan.

For decades, Japan's ultra-low interest rates encouraged its biggest pension funds, insurers and banks to invest overseas in search of better returns and Australia was one of the biggest beneficiaries.

Japanese investors became major buyers of Australian government and bank debt, helping fund our financial system. In fact, Japan has been the single largest foreign investor in Australian fixed income by country for many years.

That picture is now starting to change. The Bank of Japan has lifted interest rates to their highest level in decades.

As returns improve at home, Japanese investors have more reason to keep their money in Japan rather than investing overseas.

Why does that matter?

Australia relies heavily on foreign investors to help finance its bond market.

If Japanese investors buy fewer Australian bonds, demand falls.

When that happens, bond yields generally rise, making it more expensive for governments and banks to borrow. Those higher funding costs can eventually flow through to businesses, home loans and the wider economy.

What happens next depends partly on Japan.

If the Bank of Japan keeps raising interest rates, more Japanese capital could stay at home or flow back.

That could keep upward pressure on Australian bond yields and make it harder for borrowing costs in Australia to fall, even if the Reserve Bank starts cutting the cash rate.

Ultimately, Japan won't decide Australia's interest-rate future on its own.

Inflation, wages and the domestic economy will still be the biggest drivers, but Japan has quietly become another important piece of the puzzle, and it's one Australians can no longer afford to ignore.

What are the best and worst-performing sectors this week?

The best-performing sectors include Information Technology and Healthcare, both up more than 7%, followed by Communication Services, up more than 4%.

The worst-performing sectors include Utilities and Energy, down under 0.5%, followed by Materials, slightly up more than 0.5%.

The best-performing stocks in the ASX top 100 include WiseTech Global, up more than 26%, followed by Xero Limited, up more than 16%, and Seek Limited, up more than 15%.

The worst-performing stocks include Paladin Energy, down more than 9%, followed by Challenger Limited and Whitehaven Coal, both down more than 7%.

What's next for the Australian stock market?

The All Ordinaries Index came alive this week, finishing with an impressive 2% gain by Thursday's close as buying swept across almost every sector of the market.

Technology and Healthcare led the charge, providing a welcome boost to investor confidence.

Healthcare found fresh momentum after CSL released positive news surrounding its plasma business, helping reignite interest across the sector.

It's often these types of developments that spark a broader shift in sentiment, and this week's price action may well have marked an important turning point for the market.

From a technical perspective, the move is even more encouraging.

The All Ords has now broken above the downward momentum that has been in place since the October 2025 peak, while continuing to respect the longer-term upward trend established from the April 2025 low.

After months of compressing between these two forces, it appears the market has finally chosen a direction, and for now, it is up.

That doesn't mean the path ahead will be easy.

The market still faces two significant hurdles: the well-publicised 9200 resistance level, followed by the all-time high around 9400. Both have proven formidable in the past, but this week's rally is certainly a positive first step.

With reporting season just around the corner, the timing couldn't be better.

Expectations remain strong for the Materials sector, while the Financials continue to display healthy momentum.

If both sectors deliver solid results, they could provide the fuel needed to carry the market through these key resistance levels.

Whether you decide to take advantage of the opportunities you've been patiently researching during this extended sideways market or prefer to sit on the sidelines while reporting season plays out, one thing is becoming increasingly clear.

The weeks ahead are likely to shape the market's longer-term direction, making this one of the most important reporting seasons we've seen in quite some time.

Whether you invest directly in shares or through your superannuation, reporting season can have a major impact on investment returns.

Here's what reporting season means and why it matters.

What is ASX reporting season?

Under the Corporations Act 2001 and Australian Securities Exchange (ASX) Listing Rules, ASX-listed companies must provide a full company report to shareholders at least twice a year, within two months of the end of their balance sheet date.

This includes a director's report (including a remuneration report), a corporate governance statement, a financial report, and an auditor's report on the latter.

Because most companies have balance sheet dates of June 30, most of the reporting season action takes place in August while half-year results are usually released in February.

Why does August reporting season matter for investors?

While some investments such as property provide full transparency on a near-daily basis, equities only provide a daily share price and periodic company announcements. The nuances of a company's position can often only be appreciated through annual reports.

Through annual reports, investors can understand, among other things, a company's growth ambitions, risk appetite, and whether any dividend distributions are sustainable.

An annual report will also outline a company's strategic priorities, its approach to corporate governance and, increasingly, its commitment to sustainability.

How to read a company's financial report

The financial report is the thing investors look most closely at during reporting season, as it provides a snapshot of the company's full financial position.

It will include the statement of profit or loss and other comprehensive income (sometimes referred to as a profit and loss statement), the statement of financial position (sometimes referred to as a balance sheet), the statement of changes in equity, and a cash flow statement.

Professional investors, and serious retail investors, then use this information to generate ratios and analysis that can grade the company, such as return on investment (ROI), return on equity (ROE), liquidity ratios, and discounted cash flow (DCI).

Of course, the financial results need to be taken in the context of a company's point of development. If it's in a growth phase, for instance, profit may be deliberately suppressed as the company diverts funds towards growth, whether organic or through acquisitions.

What ASX announcements can move share prices?

Annual and half-year reports aren't the only times investors will get information about publicly listed companies.

The ASX requires that listed companies disclose any information that has a reasonable chance of moving a share price up or down.

According to the ASX: "Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity's securities, the entity must immediately tell ASX that information."

But here's the catch: this could be one of the most misleading reporting seasons we've seen in years.

Over the past six months, we've seen almost every major market driver shift.

Oil prices surged on escalating tensions in the Middle East before pulling back.

After hitting record highs, gold and silver have since corrected sharply as investors rotated back into risk assets and expectations around interest rates changed.

Copper has remained resilient thanks to demand from AI infrastructure and electrification, while inflation, interest rates and government policy continue to shape the outlook for Australian businesses.

The obvious winners should be the Materials and Energy sectors.

Higher commodity prices are expected to boost earnings, particularly for miners and energy producers.

The key won't be the results themselves, but what management says about the road ahead.

Consumer staples such as Coles and Woolworths will also be worth watching.

Rising transport and operating costs have squeezed margins, but both companies have shown they can pass many of those costs onto consumers.

With both stocks remaining in long-term uptrends, investors clearly still view them as reliable defensive plays.

Healthcare, Technology and Real Estate could tell a different story.

Many companies in these sectors have already seen their share prices retreat over the past year.

If the market has already priced in weaker earnings, even average results could be enough to spark a rally.

That brings me to what I believe is the wildcard sector this reporting season: Financials.

Australia's banks have spent months battling concerns around slowing credit growth, softer consumer spending and pressure on lending margins.

But what if the bad news is already factored into their share prices?

If results come in even slightly better than expected, the sector could quietly surprise investors.

My wildcard stock is South32 (ASX: S32).

While everyone focuses on the big iron ore names, South32's exposure to copper and other base metals gives it a unique position if industrial demand continues to strengthen.

What are the best and worst-performing sectors this week?

The best-performing sectors include Energy, up more than 5%, followed by Materials, up more than 4%, and Consumer Staples, down less than 0.5%.

The worst-performing sectors include Healthcare, down more than 4%, followed by Consumer Discretionary, down more than 3%, and Communication Services, down more than 2%.

The best-performing stocks in the ASX top 100 include Paladin Energy, up more than 21%, followed by South32 Limited, up more than 19%, and Regis Resources Limited, up more than 12%.

The worst-performing stocks include Pro Medicus, down more than 13%, followed by WiseTech Global, down more than 9%, and Xero Limited, down more than 7%.

What's next for the Australian stock market?

The All Ordinaries Index ground higher this week, finishing 0.44% higher by Thursday's close.

While the move itself wasn't spectacular, it reinforces the theme we've been discussing over the past month: the market continues to tighten, with neither buyers nor sellers willing to give much ground.

The trading range is becoming increasingly compressed, and markets rarely stay like this for long.

The difference now is that we have a potential catalyst just around the corner.

Reporting season is about to begin, and this could be the event that finally breaks the deadlock.

If the Materials sector delivers the strong earnings many are expecting and the Financials can provide support once again, the market may finally have the momentum needed to push through resistance.

Seasonally, August is often a quieter month than July.

However, markets don't always follow the averages.

July is typically the strongest month of the year for Australian shares, yet this year it has delivered a relatively subdued return of just 0.4% so far.

That raises an interesting possibility: perhaps August becomes the release valve, allowing the market to make up for lost time.

It's also worth remembering how Australia's market has compared with the rest of the world.

While many major global indices have pushed to fresh highs, the ASX has spent much of the year moving sideways, ending the first half not far from where it began.

Yet beneath the surface, there is a subtle shift taking place.

Since the March 2026 low, the All Ordinaries has posted a higher monthly close every single month.

The gains haven't been dramatic, but the consistency is difficult to ignore.

Momentum often builds quietly before everyone notices it.

That's why the weeks ahead could prove so important.

Reporting season won't just determine which companies outperform, it may also decide whether the broader market finally breaks free from the range that has contained it for weeks.

The players are in position, the stage is set, and now it's over to corporate Australia to decide whether the next act is a breakout or another period of waiting.

Next week, all eyes will be on Australia's jobs data with the release of the June labour force report.

If the unemployment rate remains at 4.4%, many headlines will declare the labour market is still strong. If it rises, attention will quickly turn to whether the Reserve Bank is less likely to raise interest rates.

But what if Australia's most-watched economic number is also its most misleading?

Think of it like driving a car using only the rear-view mirror.

Unemployment tells us what has already happened; it doesn't tell us what businesses are planning to do next. Employers rarely begin by making workers redundant.

They first stop hiring, reduce overtime, cut casual hours, delay investment and simply not replace staff who leave. Those changes can take months or years before they appear in the unemployment rate. Yet many of those forward-looking indicators are already showing signs of strain.

Official ABS data shows almost one in three Australian businesses reported lower revenue in June, while nearly half experienced higher operating costs.

More than one in four expect difficulty meeting their financial commitments over the coming month, and 15% have delayed or cancelled investment.

Official job vacancies have also fallen more than 30% from their 2022 peak, suggesting businesses are becoming more cautious about hiring.

Consumers are hardly painting the picture of a booming economy either.

Consumer confidence remains among the weakest readings in almost 50 years, while Australia recorded more than 14700 corporate external administrations in the past financial year, the highest annual number on record in raw terms.

So rather than focusing solely on next week's unemployment rate, the RBA should pay closer attention to what sits beneath the surface.

Was job growth driven by full-time or part-time positions? In May, almost 87% of new jobs created were part-time.

Did hours worked increase or fall? Is underemployment rising, suggesting more Australians have jobs but cannot secure the hours they need?

When the numbers come out next week, I wouldn't be surprised if the unemployment rate remains around current levels, but that's not the number I'll be watching.

The real test will be whether Australia is creating quality, full-time jobs, Australians are working more hours and if underemployment continues to rise.

If the headline remains strong while those underlying measures deteriorate, it suggests the labour market is considerably weaker than the unemployment rate implies.

For the sake of Australian households and businesses, I hope the Reserve Bank looks beyond the headline figure. Monetary policy shouldn't be driven by one lagging statistic when so many forward-looking indicators are telling a very different story.

What are the best and worst-performing sectors this week?

The best-performing sectors include Consumer Discretionary, up more than 2%, followed by Communication Services and Financials, both up more than 1%.

The worst-performing sectors include Consumer Staples, down more than 2%, followed by Information Technology and Real Estate, both down more than 1%.

The best-performing stocks in the ASX top 100 include AMP Limited, up more than 14%, followed by James Hardie Industries, up more than 7% and SEEK Limited, up more than 6%.

The worst-performing stocks include Paladin Energy, down more than 8%, followed by Capricorn Metals, down more than 6% and Xero Limited, down more than 5%.

What's next for the Australian stock market?

This week, the All Ordinaries Index delivered another quietly bullish performance, closing around 0.37% higher as of Thursday.

While that gain may seem modest, an old market saying explains why this week was more important than it first appears: "Professionals close the market." It's not where the market trades during the week that matters most, it's where the big money chooses to leave it at the close.

Last week, I highlighted 9050 and 8900 as the market's key battleground levels.

Since June 19, buyers have repeatedly tested 9050 but have been unable to secure a weekly close above it. This week followed the same pattern. The All Ords traded above 9050 before sellers stepped in, pushing the index back below resistance by Thursday's close. That's now four consecutive weeks where buyers have challenged this level without breaking it.

At first glance, many technical analysts would view that as bearish, but there's another side to the story.

Despite repeated selling, buyers haven't surrendered ground. For the past month, the market has consistently closed near 9050 rather than falling back towards 8900.

That tells me buying demand remains strong enough to absorb the selling pressure.

Based on technical analysis, the longer a market can hold beneath a major resistance level without retreating, the greater the probability it will eventually break through.

If that happens, the next move higher could be swift. That's why now is the time to prepare rather than react. Once this month-long battle finally produces a winner, investors may have very little time to position themselves.

There are also encouraging signs beneath the surface.

The XFL Index, which tracks Australia's 20 largest listed companies, has already broken to new highs while the All Ordinaries continues to lag. Large-cap stocks often lead the broader market, suggesting the All Ords may simply be in the final stages of catching up.

The professionals will cast the deciding vote again this week. If they can finally close the market above 9050, it could be the signal that the next leg of the bull market has begun.

Although Cuscal has a 60-year operating history, it has been listed on the ASX for only a short time and, in that time, has largely been ignored.

At least, that is, until we put it on the Buy List in March, after which the company made an acquisition at an astonishingly cheap price.

Cuscal operates a toll for electronic payments, collecting a fixed fee for transactions made across multiple payment rails.

If you pay by tapping your phone, credit card, or through EFTPOS or the Osko payment platform, there's a decent chance that Cuscal processed some of those payments.

Why every tap and subscription counts

There are three reasons for buying the stock, current price notwithstanding.

One is that the volume of transactions across the New Payments Platform, which provides instant, direct-to-account settlements, is growing explosively.

Consumers now pay for small purchases like coffee and train rides with a tap rather than with cash. This generates additional fee income for Cuscal.

For another reason, thank Netflix.

Streaming services such as Spotify and Amazon have been credited with changing consumer behaviour, from paying large annual sums to smaller, more frequent monthly subscriptions.

Everything from TV, music, insurance, toilet paper and telecoms is now largely paid by monthly subscriptions.

Splitting payments into 12 neat amounts is manna for Cuscal, as it generates 12 times the fees for the same annual payment.

The RBA reports that between 2013 and 2023, the number of payments per person rose from 330 to 730. That figure is no doubt higher today.

The third reason for buying the stock is the most compelling because it also confounds.

The acquisition that could transform earnings

Last year, Cuscal acquired Indue, a smaller competitor that has been in its crosshairs for years.

Indue offers a service like Cuscal's, only it leases payment rails and connections.

Cuscal can now migrate all of Indue's revenues that ran through leased infrastructure to its own. Doing so will make a dollar of revenue at Indue even more valuable.

The acquisition should significantly lift earnings, but not immediately.

First, Cuscal needs to integrate transactions into its own payment system by certifying payment paths, migrating bank cards and meeting reporting and security requirements. This is expected to take two to three years and cost $25-$30 million upfront.

Cuscal also needs to wait for lease terms to expire before Indue's transactions are moved over.

These are for a maximum of three years.

For the first year or two after the acquisition, the benefits of the purchase won't show and the cost of completing it may hide transaction growth.

After year three, though, earnings should explode.

A near-monopoly at a bargain price

Following the purchase of Indue, Cuscal recently agreed to buy Paymark, New Zealand's original EFTPOS network, from French processing business Worldline for $27 million.

The deal is expected to complete by June 30.

Paymark was New Zealand's first EFTPOS provider.

As with Cuscal, it operates the switch that routes payment authorisations between merchants, acquiring banks and card issuers.

Every time a Kiwi taps to pay at a supermarket or petrol station, there's a good chance it's going through Paymark's infrastructure.

The business processes more than 1.5 billion transactions a year and serves all four major NZ banks alongside merchants in every industry.

Around 75% of NZ merchants are connected to the Paymark network. This is not a niche business, it's a core part of the national payments infrastructure.

How Cuscal struck its best deal yet

Paymark was sold by the banks to French group Ingenico for NZ$190 million in 2018. Worldline then absorbed Ingenico in 2020.

So, how did a sought-after quality business end up as a distressed asset? Because Worldline itself is in financial strife.

Paymark was in the firing line because it was due to absorb $21 million in capital expenditure that Cuscal will now take on. This is what happens when a distressed seller meets a patient buyer.

Paymark is expected to generate A$5.4 million net profit next year, implying that Cuscal is paying just five times earnings for a near-monopoly asset with guaranteed transaction growth ahead.

For comparison, the Indue acquisition was struck at 25 times earnings.

Paymark won't provide the same opportunities for scale, but the capital project will end by 2030.

After that, the business will generate a reliable, growing stream of earnings. The return on capital on the purchase price will likely be more than 20%.

To fund the deal, Cuscal is raising A$33 million in new equity, the bulk of which is a fully underwritten institutional placement priced at A$4 per share.

This results in about 7.5 million new shares, equivalent to about 3.9% of existing shares on issue. The dilution is modest.

There are no heroic assumptions needed here.

These kinds of assets, at this sort of price, are rare. It is the best deal we've seen for a while.

That said, Cuscal is a better-than-average business but is not exceptional.

It must carry a huge capital buffer that stifles returns, and the big banks remain formidable competitors.

But a second sensible acquisition suggests that, in upgrading the stock in March, we may have undercooked growth potential and underestimated management.

So far, this has been a masterclass in capital allocation. With the share price up 21% since, we're downgrading to HOLD.

It might sound impossible, but that's exactly the kind of opportunity the oil market delivered earlier this year, and the big question now is: could this be your second chance?

When conflict erupted in the Middle East, crude oil exploded more than 70% in just six trading days.

That means a $7000 investment, managed with a professional 5% stop-loss, had the potential to grow to more than $100,000.

Opportunities like that don't come around often, but when they do, they can completely change your life.

So, here's why I'm talking to you about oil today.

History shows that whenever major conflicts threaten global oil supplies, crude has a habit of making rapid moves towards US$100 to US$110 a barrel.

We saw it during the 2008 commodity boom, again in 2011-12 during the Arab Spring and sanctions on Iran, and in 2022 after Russia invaded Ukraine.

Right now, oil has almost completely erased its recent war rally and is trading back near US$70 a barrel.

Beneath the surface, many of the same risks that triggered the last explosive move are starting to build again.

This week, President Trump declared the ceasefire arrangement with Iran effectively over after renewed attacks on commercial vessels in the Strait of Hormuz.

The United States responded with strikes on more than 80 Iranian targets, while reports suggest Kharg Island, through which most of Iran's oil exports pass, could become a future military target.

Unsurprisingly, traders immediately began pricing in the increased geopolitical risk.

At the same time, the US Strategic Petroleum Reserve remains near its lowest level since the early 1980s, leaving less emergency supply available if disruptions worsen.

Russia is also continuing to battle refinery disruptions and attacks on energy infrastructure, keeping global supply far tighter than many investors realise.

Now, none of this means oil is guaranteed to surge back to US$100.

Markets never make promises, but if you're serious about finding high-probability opportunities before everyone else, this is one market that deserves to be on your radar.

The biggest mistake isn't missing the first rally, it's watching the next one unfold while you're still thinking about the last.

Keep oil on your watchlist and watch the chart.

Let price confirm the story before risking your hard-earned money and remember this: earlier this year, the entire move happened in less than a week. If another opportunity emerges, time won't be your friend.

The traders who are prepared before the move starts are usually the ones who benefit the most.

What are the best and worst-performing sectors this week?

The best-performing sectors include Energy, up more than 4%, followed by Consumer Discretionary, up more than 2% and Information Technology, up more than 1.5%.

The worst-performing sectors include Materials, down more than 6%, followed by Real Estate, down more than 1.5% and Industrials, down more than 1%.

The best-performing stocks in the ASX top 100 include Santos Limited, up more than 7%, followed by ASX Limited and Woodside Energy, both up more than 5%.

The worst-performing stocks include Genesis Minerals, down more than 13%, followed by Evolution Mining, down more than 12% and Pilbara Minerals, down more than 11%.

What's next for the Australian stock market?

This week, the All Ordinaries Index slipped just under 1% by Thursday's close, with the market once again failing to break through the stubborn 9000-point level.

In fact, this marks the third consecutive week that the index has tested this resistance without success.

The week began on a positive note, but buying momentum gradually faded, with the market once again finding support around the 8900 level.

It's become a familiar pattern over recent weeks: up one day, down the next, with neither buyers nor sellers able to take decisive control.

What we're seeing is a market becoming increasingly compressed.

The trading range continues to tighten, and history tells us that periods like this are often followed by a meaningful move in one direction. The question now is simply which side wins.

Sector performance continues to tell a very different story from the headline index. Materials endured a difficult week, while Energy emerged as the clear standout.

Renewed tensions in the Middle East, with the US and Iran once again exchanging blows, pushed oil prices higher and reignited interest in energy stocks.

As we've seen throughout the past year, geopolitical events can quickly reshape sector leadership, creating opportunities for some industries while weighing heavily on others.

With little sign that these tensions will ease in the near term, investors should expect volatility to remain elevated. It's also likely we'll continue to see an uneven market where some sectors thrive while others struggle.

If you're investing with a shorter- to medium-term outlook, now is a good time to reassess your portfolio.

Rather than focusing solely on the direction of the overall market, consider which sectors have historically benefited from higher oil prices, rising inflation and periods of geopolitical uncertainty. In markets like these, it's often sector selection, not just market direction, that makes the biggest difference.

Over the past few years, we've watched stocks, commodities and cryptocurrencies move on political statements, viral social media posts and unexpected geopolitical events that had little to do with company fundamentals.

That's forcing investors to rethink one of the oldest assumptions in finance: that prices always reflect value.

Take Donald Trump, for example.

His latest financial disclosure revealed more than US$1.4 billion in income from his family's cryptocurrency ventures during 2025, making digital assets his largest reported source of income.

At the same time, his administration has adopted a far more crypto-friendly stance than previous governments.

Whether the two are connected isn't the point.

The reality is that when influential figures have significant financial exposure to an asset class and the ability to shape policy and investor sentiment, markets become far more difficult for ordinary investors to navigate.

The same questions are being asked in commodity markets.

Earlier this year, U.S. authorities began investigating more than US$2.6 billion worth of unusually timed oil trades placed shortly before major announcements relating to Iran and the Middle East.

Those announcements sent oil prices sharply lower, leaving many wondering whether some participants knew more than the rest of the market.

Then there's social media.

A single post from Elon Musk has repeatedly moved cryptocurrencies, AI stocks and even his own companies within minutes.

Algorithms now react faster than humans can read the headline, amplifying moves long before most retail investors have had time to think.

This isn't a conspiracy theory, it's simply the reality of modern financial markets.

Politics, billionaires, central banks and algorithms all influence markets.

The game has become faster, noisier and, at times, less connected to underlying business fundamentals.

So how do individual investors compete?

Not by trying to predict the next tweet or political announcement.

Instead, they need to focus on these three things.

1. Follow price before opinion

If the market isn't behaving the way the fundamentals suggest it should, respect the price action.

Markets can remain irrational far longer than most investors expect.

2. Wait for confirmation

Chasing the first move after a headline is often when emotions are highest, and risk is greatest.

Patience frequently delivers a better entry and a clearer picture.

3. Manage risk relentlessly

You can't control the next geopolitical event, a surprise policy announcement, or a viral social media post.

You can, however, control your position size, your stop-loss and whether you choose to participate at all.

The biggest edge investors have today isn't having more information, given that everyone receives breaking news within seconds.

It's having the discipline to ignore the noise until the odds are genuinely in your favour.

What are the best and worst-performing sectors this week?

The best-performing sectors include Healthcare and Information Technology, both up more than 2%, followed by Energy, up more than 0.5%.

The worst-performing sectors include Utilities, down more than 4%, followed by Real Estate, down more than 3% and Consumer Staples, down more than 2%.

The best-performing stocks in the ASX top 100 include Life360, up more than 9.15%, followed by Telix Pharmaceuticals, up more than 12% and Pro Medicus, up more than 9%.

The worst-performing stocks include BlueScope Steel, down more than 9%, followed by Stockland and APA Group, both down more than 7%.

What's next for the Australian stock market?

The All Ordinaries Index drifted lower again this week, finishing with a modest 0.37% loss on Thursday.

It looked like the market was set for a positive week after a promising start.

But sellers returned later in the week, erasing those gains and keeping the index under pressure.

Healthcare and Information Technology were the standout performers, suggesting investors are beginning to search for value in sectors that have lagged for some time.

While the broader market remains subdued, this rotation is another reminder that opportunities still exist, even when the index itself isn't doing much.

From a technical perspective, the All Ords is becoming increasingly interesting.

Price action continues to compress into a tighter range, something that often precedes a meaningful breakout.

Since earlier this year, we've seen a pattern of lower highs and higher lows develop, signalling not only indecision but also an intense battle between buyers and sellers.

Markets simply can't remain compressed forever. Eventually, one side wins.

If this pattern continues, I expect strong support around the 8800 level, with resistance sitting near 9000.

The narrowing range means that when the breakout does come, it could be quite decisive.

At this stage, I still believe the higher probability is to the upside, but there are competing forces at play.

Recent reports of increased short selling in the banking sector suggest some investors are betting on further weakness.

If they're right, Financials could weigh heavily on the broader market.

On the other hand, the Materials sector continues to attract investment flows as demand for commodities remains strong.

So, the battle lines are drawn.

Will Financials drag the market lower, or will Materials provide enough strength to lift the market higher?

Right now, Australia's share market is largely driven by these two heavyweight sectors, while many others are caught in the crossfire.

That may not be such a bad thing, though, as some of those overlooked sectors are quietly starting to recover.

Good luck and good trading.

Australians tend to back what they know.

It is one of the reasons big bank shares are a staple of so many portfolios.

For much of the past two decades, that instinct has been rewarded. Even as international investing has become more common, many Australian portfolios remain heavily anchored to the local market.

The debate around home bias is not really about geography. It is about opportunity.

Home bias is not uniquely Australian. However, it has gradually declined across many major pension markets over the past decade.

As research from the Thinking Ahead Institute shows, Australia continues to maintain one of the highest allocations to domestic shares in the developed world.

That would be less remarkable if Australia occupied a similarly large share of global equity markets.

It does not.

Australia represents around 2% of global equity market value, yet Australian investors continue to allocate a disproportionately large share of their portfolios locally.

The more interesting question is not why Australians own so many Australian shares. It is why they expect a market representing 2% of global equity value to provide most of their equity exposure.

Behavioural finance helps explain why.

Daniel Kahneman's work showed that investors often mistake familiarity for safety. Home bias is one manifestation of that tendency.

It should be said that home bias is not the same as a criticism of Australian companies.

Australia remains home to some of the world's strongest banking franchises, globally significant resource companies and a dividend culture that is rare among developed markets.

But the reality is that the global economy has evolved far more rapidly than the composition of the Australian share market.

Financials and materials have dominated the ASX for decades and, as at 31 May 2026, still accounted for more around 50% of the market.

By comparison, those sectors make up less than 18% of the MSCI World ex Australia Index.

For investors, that has real consequences.

Many Australians who believe they are diversified because they own a broad Australian share market fund are often making a much larger bet on banks and resources than they realise.

If housing, credit growth or commodity prices struggle, a significant portion of their portfolio would be exposed to the same risks at the same time.

In contrast, the industries driving global market returns sit outside Australia's traditional strengths.

Technology, healthcare and advanced manufacturing have become larger parts of the global economy, while banks and resources continue to dominate the local market.

The solution is not abandoning Australia. It is recognising that diversification is about more than geography.

It may mean complementing Australia's strengths in banks and resources with exposure to global healthcare leaders, financially strong international companies, emerging markets or smaller companies that operate in very different parts of the economy.

For much of the past decade, global equity returns were increasingly driven by a handful of large US technology companies.

Their dominance was so significant that many investors came to treat international investing and US technology as effectively the same thing.

But that is becoming less true. Strong returns are no longer coming from just a handful of US technology companies.

So far in 2026, value equities, emerging markets and growth equities have all outperformed both the ASX 200 and the Magnificent Seven.

For many years, investors could reasonably point to the practical barriers of investing internationally. Accessing global markets often meant expensive managed funds, high fees and limited transparency.

Today, those barriers have largely disappeared thanks to the adoption of ETFs.

Investors can access international quality companies, global healthcare leaders or thousands of emerging market companies as easily as they can buy an Australian bank or miner.

The challenge is no longer access. It is allocation.

Home bias made sense when the Australian market looked more like the global economy. It makes less sense as the gap between the two continues to widen.

Stagflation is every investor's nightmare.

Growth slows, consumers cut spending, unemployment rises, yet prices remain stubbornly high.

Normally, when economies weaken, inflation falls, but in a stagflation environment, both problems occur simultaneously.

While Australia isn't facing a full-blown 1970s-style stagflation crisis, the warning signs are becoming harder to ignore.

Inflation remains above the RBA's target range, unemployment has climbed to 4.4%, productivity growth is weak and economic growth continues to slow under the weight of higher interest rates.

For many Australians, it feels like the worst of both worlds.

Wage growth is struggling to keep pace with living costs, households are tightening their belts, and businesses are battling rising expenses, but investors should remember one important lesson from history: even in difficult economic environments, some sectors thrive.

During the stagflation era of the 1970s, many of the market's biggest winners were not the exciting growth stocks of the day.

Instead, investors flocked to businesses that controlled essential resources, produced energy, supplied critical infrastructure or sold products people simply could not live without.

That same playbook may be worth considering today.

While giants like BHP and Rio Tinto remain popular choices, paying close attention to companies such as Lynas Rare Earths, Genesis Minerals, Paladin Energy, IGO and APA Group could be where future growth lies.

The common thread is simple.

These businesses are tied to commodities, energy security, infrastructure and essential services.

Many possess something incredibly valuable during periods of economic stress: pricing power.

When costs rise, they often pass those increases on to customers rather than absorb the pain themselves.

That is why the goal in a stagflation environment is not necessarily to find the cheapest stocks, it is to find the strongest businesses.

Look for companies with robust cash flow, manageable debt, reliable dividends, dominant market positions and products that remain in demand regardless of economic conditions.

Stagflation can be brutal for weak businesses, but for investors willing to adapt, it can also create some of the biggest opportunities of the cycle.

The winners of the next bull market may not be the same companies that dominated the last one.

In fact, if stagflation continues to gain a foothold, the biggest profits could come from owning the businesses that keep the economy running even as everything else slows.

Best and worst-performing sectors this week

The best-performing sectors include Consumer Discretionary and Healthcare, both up more than 3%, followed by Consumer Staples, up more than 2%.

The worst-performing sectors include Materials and Energy, both down more than 4%, followed by Information Technology, down more than 3%.

The best-performing stocks in the ASX top 100 include ResMed Inc., up more than 9%, followed by Ramsay Health Care and Telix Pharmaceuticals, both up more than 8%.

The worst-performing stocks include WiseTech Global, down more than 14%, followed by Greatland Resources, down more than 12% and Genesis Minerals, down more than 10%.

What's next for the ASX and the Australian share market?

The All Ordinaries Index continued its recent pullback this week, finishing down 1% by Thursday's close.

While the decline itself was relatively modest, it reinforces the view that the market remains firmly range-bound between 8800 and 9200 points.

Until buyers or sellers decisively break this range, it is difficult to build a strong case for the next major directional move.

Despite lower oil prices providing some relief, weakness in the Materials and Energy sectors weighed heavily on the broader market.

Given that these sectors have done much of the heavy lifting over the past year, a period of consolidation should not come as a surprise.

What is more interesting, however, is where investor capital appears to be flowing.

Consumer Discretionary, Healthcare and Consumer Staples have begun to attract increased attention as investors seek more defensive opportunities and earnings stability.

It serves as an important reminder that the headline index only tells part of the story.

While the All Ords may appear stuck in neutral, several sectors are quietly carving out their own trends beneath the surface.

In many respects, there are markets within markets.

While some areas continue to struggle, others are steadily building momentum despite the broader index moving sideways.

From a broader perspective, Australia's share market has been somewhat underwhelming over the past year, particularly when compared to the technology-driven gains seen overseas.

Yet every technological revolution still relies on real-world inputs.

Critical minerals, energy resources, infrastructure and industrial materials remain the foundation upon which tomorrow's technologies are built.

At some point, investor attention is likely to return to the companies producing those essential resources.

When it does, Australia's market could once again find itself in the global spotlight.

Until then, patience, discipline and careful stock selection remain critical.

The index may be moving sideways, but opportunities continue to emerge for investors willing to look beneath the surface.

The space economy is expanding quickly beyond rockets into defence, energy infrastructure and data services which are underpinning commercial enterprises.

The popularity of the SpaceX initial public offering (IPO) illustrates the attraction for investors, including Australia's richest person, Gina Rinehart, who has backed Elon Musk's IPO with more than US$1 billion.

The big news in markets this month wasn't just the SpaceX IPO, but the phenomenal demand for it, including from Gina Rinehart, who hit the headlines in The Wall Street Journal when the paper revealed Australia's richest person had invested over US$1 billion in the SpaceX IPO.

That news was the most read story in The Wall Street Journal the day it was published.

Such is the desire to know how the rich are investing.

Rinehart is betting on founder Elon Musk's vision to transform the space economy into a profitable commercial enterprise.

Her stake in SpaceX is the single largest investment outside of iron ore made by her private company, Hancock Prospecting.

Like many others, Rinehart is betting that investing in space isn't just about launching rockets, but an expected growth in the space economy.

The forces driving the space economy boom

Space companies are benefitting from a combination of several factors including rising commercial demand for communications services and increased government spending, including rising defence investment in early warning, counterspace systems and secure satellite communications.

Global government space spending, for example, reached US$137.4 billion in 2025, and for the first time, defence-driven space spending accounted for 54% (US$73.5 billion) of that total, officially outpacing civilian space budgets, such as NASA's.

The modern space age today is also being defined by commercial demand and economic infrastructure.

Commercial activity now accounts for roughly 70% of global orbital launches, up from 25% a decade ago, as satellite launch costs fall.

Over the past 60 years, the cost of reaching Low Earth Orbit has fallen approximately 200 times, to roughly US$1000 per kilogram today from US$400,000 per kilogram.

This collapse in launch economics is the single biggest structural change in the industry encouraging commercial enterprise.

Internet connectivity, for example, is burgeoning as a business enterprise.

Active satellites in orbit, for example, have grown from around 1000 in 2010 to over 12,000 in 2025, with estimates approaching 100,000 by 2030 as broadband constellations such as Starlink and Amazon Leo deploy satellites to keep us connected.

From Starlink and satellite internet to defence: Where the money is being made

Increasingly, satellites are where the space economy generates revenue, with over half of today's space market tied to satellites providing infrastructure and connectivity.

Falling launch costs and reusable rocket technology have enabled the rapid deployment of satellites that deliver broadband, navigation, Earth observation, and secure communications at scale.

This is helping push the growth of the global space economy, which is projected to surpass US$1 trillion by 2034.

Apart from satellite broadband, defence modernisation and emerging applications such as orbital computing are underpinning commercial opportunities.

The satellite broadband market alone is forecast to grow from US$22 billion in 2025 to US$100 billion by 2035, driven by household connectivity, enterprise backhaul, mobility, and military applications.

Government spending too is rising.

The US Space Force budget request for FY27, for example, is approximately US$71 billion, more than double the FY25 budget, with proposed programs such as Golden Dome adding a long duration government spending which provides a durable demand floor for the sector.

How everyday investors can access the space economy

With SpaceX raising the profile of the space economy, it's not just Gina Rinehart that is keen.

Investors are increasingly seeking access to companies leading reusable launch technology, satellite networks, mission-critical components, including space exploration.

Australian investors can invest in these ground-breaking companies directly, such as many did in the SpaceX IPO, or diversify their investments though a space technology ETF listed on the ASX such as the Global X Space Tech ETF (MOON).

For investors who missed the SpaceX IPO or were priced out by high minimums and limited share availability, an ETF offers a more practical entry point, spreading exposure across the broader space economy rather than concentrating a bet on a single name.

The ETF tracks the performance of companies driving growth and commercialisation of the global space economy.

MOON holds a diversified mix of companies across the space value chain, including satellite operators, launch technology providers, defence-linked space contractors, and the manufacturers of mission-critical components that make it all work.

Since its ASX listing on June 11, 2026, MOON attracted over A$5 million in flows within its first five trading days, reflecting strong early investor appetite for dedicated space economy exposure.

Much like railroads in the 19th century, the internet in the 1990s, and AI in the 2020s, space infrastructure could define the 2030s as a foundation for the next phase of the global economy and investors who get in earlier could see the greatest rewards.

As with all investments, this fund has risks - see the PDS for more information.

This fund may expose investors to currency risk, sector risk, concentration risk, and/or market risk.

Why you should buy A O Smith shares? 

A O Smith (NYSE:AOS) is the clear market leader in the stable, oligopolistic US water heater industry, where the top three players control over 90% of both residential and commercial markets and AOS holds the #1 position in each (36% residential, 52% commercial).

Crucially, around 85% of demand is non-discretionary replacement of old units on about a 15 year cycle, giving the business a durable, recurring revenue base that is far less cyclical than its construction exposed peers.

The company converts close to 100% of earnings into free cash flow, carries no debt on its balance sheet, generates about a 34% return on invested capital, and is a dividend Aristocrat that has consistently returned the bulk of its cash to shareholders through dividends and buybacks.

The appeal today is that you can buy this quality franchise at a depressed price.

The weakness driving this is cyclical, not structural. US water heater volumes have had their slowest start to a year since COVID, but AOS has held onto its market share throughout. That leaves it well placed to benefit once volumes start to recover.

What does A O Smith (NYSE:AOS) do?

Founded in 1874 in Milwaukee, Wisconsin, AOS is a manufacturer of both residential and commercial water heaters and boilers.

It also supplies water treatment and purification products in the Asian market. The company employs approximately 11,500 people at operations in the United States, Europe and Asia.

Growth outlook for A O Smith shares

The investment case rests on the cyclical US water heater slowdown reversing, with a long replacement cycle and steady share underpinning a return to low-single-digit organic sales growth.

Near-term headwinds are well flagged: weaker US residential volumes and higher steel and energy costs, which management is offsetting with a 4-7% price hike from mid-May, supporting a recovery in the second half of the year.

The struggling China business is now less than 10% of group earnings (down from 25% in 2019) and management is exploring strategic options, including a likely exit, which should remove a long standing drag and a key risk to the story.

We expect the disciplined capital allocation to continue, with approximately 100% cash conversion and most free cash flow returned via dividends and buybacks.

Returns

At the current price of $57 AOS trades on roughly 15x FY26 earnings, which is close to its 10-year trough of 14x.

Applying a 14x EV/EBIT  (enterprise value/earnings before interest and taxes) multiple (broadly in line with the long-term average) points to a fair value of around $73 per share, implying meaningful upside from here.

Even with no re-rate or growth, the current earnings yield of about 7%, which gets consistently returned to shareholders, is a strong base.

In a downside scenario applying the COVID low EV/Sales multiple, the implied value sits in the high $40s, leaving the risk/reward skewed favourably at today's depressed price.

While the political debate will focus on immigration, culture and social issues, investors may be looking at something entirely different.

Their superannuation balances.

Most Australians don't realise that some of the largest holdings inside their super funds are mining and energy companies.

Giants like BHP and Rio Tinto feature heavily across the industry, meaning the fortunes of millions of Australians are directly linked to the performance of the resources sector whether they actively invest or not.

That is what makes Hanson's economic message so interesting.

Her argument is that Australia has spent too long increasing regulation and focusing on redistribution while productivity growth has stalled.

Instead, she wants to make it easier for companies to invest, build projects, employ workers and develop Australia's vast natural resources.

That is one reason Hanson has developed a close relationship with mining billionaire Gina Rinehart, whom she has publicly acknowledged as a source of policy ideas.

The bigger issue, however, is productivity.

Australia's productivity growth has been weak for years, yet productivity remains one of the most important drivers of rising wages, company profits and long-term living standards.

Hanson is tapping into a growing belief that Australia needs to focus less on dividing wealth and more on creating it by producing more, building more and extracting greater value from the resources it already owns.

For investors, the question is simple.

What happens if governments become more supportive of the industries that generate some of Australia's largest profits? Historically, the answer has been higher share prices.

The reality is that markets don't care whether a policy is popular.

They care whether it increases profits and if a more mining-friendly and business-friendly Australia leads to higher earnings for some of the country's largest companies, investors will likely reward them accordingly and because those same companies are major holdings in Australia's superannuation system, the benefits could extend far beyond shareholders and into the retirement savings of millions of Australians.

What are the best and worst-performing sectors this week?   

The best-performing sectors include Materials, up more than 3%, followed by Financials, up more than 1.5% and Healthcare, up under 1.5%.

The worst-performing sectors include Energy, down more than 7%, followed by Utilities, down more than 2% and Communication Services, down more than 1%.

The best-performing stocks in the ASX top 100 include Regis Resources, up more than 21%, followed by Genesis Minerals and Greatland Resources, both up more than 16%.

The worst-performing stocks include Santos Limited, down more than 9%, followed by Whitehaven Coal and Ampol, both down more than 8%.

What's next for the Australian stock market?

The All-Ordinaries Index delivered a strong performance this week, rising almost 1.5% by Thursday's close and putting the market firmly back on the front foot.

More importantly, buyers have once again pushed the index towards the critical 9200 level, a barrier that has repeatedly capped rallies over the past year.

With momentum continuing to build, there is growing evidence that this latest attempt may be different.

The recovery was driven by the market's two most influential sectors, Financials and Materials, both of which bounced strongly and provided the foundation for the broader rally.

Equally encouraging was the continued strength in Real Estate.

After spending much of the past year lagging behind, the sector has quietly become one of the market's standout performers over the past month despite generally weak conditions across the wider market.

If interest rate expectations continue to move lower, Real Estate could become a key driver of the next rise.

Investor sentiment was also supported by ceasefire developments in the Middle East.

As tensions eased, oil prices fell sharply, leading the Energy sector to decline more than 7% for the week.

While this hurt energy stocks, lower oil prices are generally welcomed by the broader market as they reduce inflation pressures, lower business costs and improve the outlook for interest rates.

In the United States, the Federal Reserve left interest rates unchanged.

However, markets interpreted comments from the Fed Chair as relatively hawkish, suggesting rate cuts may not arrive as quickly as investors had hoped.

This weighed on US markets and tempered expectations for near-term monetary easing.

Australia appears to be on a different path.

Inflation pressures continue to ease, economic growth remains subdued and expectations are building that the RBA could begin lowering rates later this year or early next year.

If that scenario unfolds, it will provide a meaningful tailwind for both businesses and investors.

For much of the past year, the Australian market has played second fiddle to its global counterparts.

However, with a potential rate-cutting cycle approaching and commodity markets showing renewed momentum, don't be surprised if Australia emerges as one of the strongest-performing major markets over the year ahead.

Hyperscalers are ramping up power use at pace, with Goldman Sachs forecasting data centre electricity demand to grow 32% a year to 2030.

This, including economies of scale in token production, will drive up electricity demand from data centres by a compound annual growth rate (CAGR) of 32% over the same period, a sharp increase in energy demand that is transforming the growth outlook in several essential infrastructure sectors.

AI is delivering a dual benefit to utility infrastructure.

On the revenue side, surging AI-driven energy demand is filling capacity and lifting volumes through existing networks; on the cost side, AI-enabled optimisation is improving operational efficiency and reducing waste.

Together, we believe these trends may support stronger cash flow growth and improve returns on invested capital - a combination that is rare in a sector historically valued for stability rather than growth.

Why NextEra is in the sweet spot

NextEra (NYSE: NEE), the US electric utility that sits at the intersection of power demand growth and renewable build-out, offers an excellent example.

NextEra, the largest renewable energy producer in the US, is among the most direct beneficiaries of the AI hyperscaler build-out.

Its subsidiary Florida Power and Light already has over 20GW of large load enquiries in Florida, with 9GW of additional data centre demand at an advanced stage of development.

At the portfolio level, NextEra has announced plans to develop multiple data centre campuses totalling 15GW by 2035, with an upside case of 30GW.

Big tech partnerships are accelerating growth

Beyond the demand uplift, NextEra has entered a strategic partnership with Google to deploy AI tools - including REWIRE - to modernise FPL's grid operations, improve reliability, and reduce costs.

NextEra has also agreed with Google to recommission the recently retired Duane Arnold nuclear plant in Iowa under a 25-year contract, underwriting the economics of the restart and supporting Google's cloud and AI infrastructure in the region.

The combination of surging demand, long-duration contracted revenue, and AI-driven operational improvement positions NextEra as a textbook example of the dual-benefit thesis - and its leadership in renewable energy places it at the forefront of the clean power sourcing that hyperscalers are increasingly required to demonstrate.

On May 18, NextEra Energy announced that it will acquire Dominion Energy in an approximately US$67 billion merger, creating the world's largest regulated electric utility company with a customer base of approximately 10 million.

If approved, the combined entity would also become the third-largest energy company in the US, behind only ExxonMobil and Chevron.

For Essential Infrastructure investors, this transaction underscores the scale of capital and operational capability required to meet the multi-decade electricity demand buildout, and the premium that strategic acquirers are willing to pay for high-quality regulated utility assets positioned at the centre of that theme.

Pick up the July issue of Money for Tom Watson's deep dive into data centres, from investment opportunities to the environmental cost.

Australian investors are once again being reminded that the global equity market is evolving faster than many local portfolios.

While debates in Australia continue to centre on interest rates, dividends and cost-of-living pressures, the biggest story in global markets has been the rapid rise of semiconductor champions.

And few embody that shift more clearly than Samsung Electronics.

Now firmly among the world's largest companies, Samsung has recently moved into the top tier of global market capitalisation rankings, even briefly surpassing Meta.

It is an extraordinary turnaround for a business that, not long ago, was trading at levels many investors would have considered deeply undervalued.

The shift most portfolios are missing

This is not simply a story about one company outperforming.

It reflects a deeper structural change in the global economy, one being driven by artificial intelligence, data infrastructure and the sustained demand for advanced memory and computing power.

Samsung sits at the centre of that transformation.

The company is one of the world's largest producers of memory chips, including DRAM and NAND, which are essential to AI workloads, cloud infrastructure and high-performance computing.

As AI adoption accelerates, demand for these components has surged, tightening supply and driving a powerful earnings recovery for semiconductor manufacturers.

In turn, investors have re-rated these companies, recognising their strategic importance in what is quickly becoming a new industrial revolution.

In our view this is a structural shift in demand rather than another turn of the memory cycle, and that distinction is what justifies the re-rating.

Samsung's scale, diversification and technological leadership make it one of the most significant of these players.

Its ability to straddle both memory and logic chips, combined with its vertical integration across consumer electronics, provides a level of resilience and optionality that few competitors can match.

The stock investors ignored, then chased

What makes Samsung's story even more compelling, however, is how recently the market seemed to underappreciate it.

Legendary investor Michael Burry (of The Big Short fame) recently captured this dynamic succinctly.

He wrote: "Some stocks are backed by businesses so good that the time to buy is defined by a simple, recurring rule. Samsung Electronics is the belle of the ball these days.

"Just last year, however, it traded extensively at tangible book value. When Samsung Electronics stock hits tangible book value per share, buy it. Period. No more analysis needed."

This observation speaks to a broader truth about markets.

Even companies with world-class assets and dominant market positions can become mispriced, particularly in sectors perceived as cyclical.

Semiconductor stocks, including Samsung, have historically been subject to sharp swings in sentiment tied to inventory cycles and pricing pressure.

Why this boom could last longer

Yet the AI-driven demand cycle appears fundamentally different.

Unlike previous upcycles, which were often driven by consumer electronics or PC refreshes, today's demand is anchored in structural investment.

Hyperscale data centres, AI training clusters and sovereign digital infrastructure projects require vast and sustained volumes of high-performance memory.

This creates a more durable and visible demand profile, which in turn supports higher valuations over time.

Global indices have been propelled by companies at the forefront of AI and digital infrastructure, while the ASX has struggled to keep pace.

This is not due to a lack of quality among Australian companies, but rather the composition of the market itself. Australia simply does not have a listed semiconductor ecosystem comparable to those overseas.

Avoid missing the next boom

As a result, investors with a strong home bias risk missing out on one of the most powerful wealth-creation cycles of our time.

Samsung's ascent into the world's top echelon of companies underscores this point. It is not just a corporate success story.

It's a signal. Capital is increasingly rewarding businesses that enable and scale the digital economy. Those that sit outside this ecosystem, no matter how stable or income-generating, may struggle to deliver comparable growth.

This does not mean investors should abandon domestic equities. Rather, it highlights the importance of diversification and global exposure.

Accessing sectors such as semiconductors, AI infrastructure and advanced computing is becoming essential for portfolios aiming to capture long-term capital growth.

How to position for the next wave

Importantly, the opportunity is still evolving.

AI adoption remains in its early stages, and the buildout of supporting infrastructure is likely to continue for years.

Supply constraints, technological complexity and rising demand all suggest that companies like Samsung could remain at the centre of this growth cycle for some time.

The lesson from Samsung's rise is clear.

Markets can change quickly, and leadership can shift in unexpected ways. Investors who focus too narrowly on traditional sectors risk overlooking the businesses shaping the future.

The question is no longer whether companies like Samsung deserve their place among the world's largest.

The real question is whether investors are adequately positioned to benefit from what comes next.

For investors seeking exposure to this theme, the Global X Artificial Intelligence ETF (GXAI), which includes Samsung, provides a diversified way to access the companies underpinning the AI ecosystem.

It is no coincidence that global capital has flowed aggressively into this segment of the market.

Semiconductor firms are no longer viewed as purely cyclical manufacturers.

They are increasingly seen as foundational infrastructure providers, the picks and shovels of the digital economy.

After one of its sharpest falls in recent years, about half of Bitcoin holders are sitting on a loss.

Millions who were told crypto was the future are now watching their investment trade below what they paid. That is easy to accept when prices are rising, much harder when they are not.

If enough investors start questioning the story, confidence can quickly turn to panic. And if that happens, the risk of a broader sell-off rises.

A sell-off without a scandal

Last week, Bitcoin recorded its worst weekly decline since the collapse of FTX in 2022. This time, there was no major fraud, no exchange failure and no obvious trigger. The market simply sold off.

That alone should give investors pause.

For years, crypto advocates pitched Bitcoin as digital gold, a hedge when inflation rises or uncertainty hits. But during the latest bout of geopolitical tension, gold moved higher while Bitcoin fell sharply.

Even believers are pulling back

Billionaire investor Mark Cuban, once one of Bitcoin's strongest backers, says he has sold most of his holdings. His reasoning is simple.

When the pressure came, Bitcoin did not behave the way it was meant to.

That raises a bigger question. If it does not rise with inflation or hold up in times of stress, what role does it actually play?

The new money magnet: AI

There is another force at work. Capital that once flowed into crypto is now shifting to artificial intelligence.

Investors can back listed companies building AI software, data centres and semiconductors.

The momentum and excitement that once powered crypto is now being redirected. Money tends to chase the next big story and right now, that story is AI.

So what now?

Bitcoin has survived sharp downturns before and recovered each time. Long-term believers will say this is just another volatile chapter.

But the debate is changing. Investors are no longer just asking how high Bitcoin can go. They are asking whether the original story still holds.

Best and worst-performing sectors this week

Consumer staples led the market, up more than 6%. Consumer discretionary followed, up more than 5%, with healthcare up more than 3%.

Technology was the weakest sector, down more than 4%. Materials fell more than 3%, while financials slipped just under 0.5%.

In the ASX 100, Steadfast Group jumped more than 30%, followed by CSL, up more than 9%, and Coles, up more than 8%.

At the other end, Greatland Resources fell more than 12%, Capricorn Metals dropped more than 11% and Newmont declined more than 10%.

What's next for the Australian sharemarket?

The All Ordinaries Index showed resilience this week, despite worsening global conditions linked to the US-Iran conflict.

By Thursday's close, the index was down just over 0.2%. Over the same period, the S&P 500 fell almost 2.5%. That divergence matters.

Investors stepped in again around 8700, a level that also held during the sell-off in late May.

This now looks like the market's line in the sand. As long as the index holds above 8700, the bullish view remains intact.

A clear break below could open the door to 8600 or lower.

Defensive shift underway

Sector moves are also telling a story. Consumer staples, discretionary, healthcare and real estate led gains. These are typically more defensive areas.

At the same time, technology and materials lagged. That is notable given both sectors have rallied strongly in recent weeks.

When money rotates into defensive sectors, it often signals rising caution.

For investors who have benefited from the recent rally, the focus may need to shift. It is not just about buying well. It is about knowing when to sell.

Reports that SpaceX could seek a valuation of about $7.5 trillion in what would be the biggest IPO in history have investors excited.

It is one of the most extraordinary companies ever built, spanning space exploration, satellite communications, defence and artificial intelligence.

But for investors, this story points to something more important, where we are in the market cycle right now.

One of Wall Street's oldest observations is that the biggest IPOs tend to arrive close to major market peaks. Not because the IPO causes a crash, but because deals of that size only happen when confidence is high and investors are willing to pay almost any price for future growth.

History offers some striking examples. The record-breaking AT&T listing came near the peak of the late 1990s boom before the dot-com crash.

Coinbase listed during the crypto surge of 2021, just months before digital assets fell sharply.

Rivian debuted at a valuation larger than many established carmakers shortly before growth stocks suffered one of their worst sell-offs in decades.

The pattern is not perfect, but it is worth paying attention to.

Companies do not rush to list when investors are fearful. They list when markets are strong, valuations are stretched and demand for risk is high.

Property investors have a similar saying. When the world's tallest skyscraper is announced, it often signals the peak of the property cycle.

Extreme optimism leads to extreme projects, and by the time they are delivered, much of the good news is already priced in.

Major market tops rarely form when investors are worried. They form when confidence is high and making money feels easy. That is why downturns catch so many people off guard.

Eventually, markets reach a point where optimism is fully reflected in prices and portfolios are surging. At that point, the question becomes simple, who is left to buy?

None of this means a SpaceX IPO would mark the exact top. Bull markets can continue rising long after early warning signs appear.

But a deal of this scale could be one of the clearest signals yet that the market is entering a late-cycle phase, where excitement starts to replace discipline.

What are the best and worst-performing sectors this week?   

The best performing sectors were Information Technology, up more than 7%, followed by Energy, up more than 2%, and Utilities, up more than 0.5%.

The worst performing sectors were Real Estate and Healthcare, both down more than 2%, followed by Communication Services, down more than 1%.

Among ASX 100 stocks, Pro Medicus led gains, up more than 20%, followed by Life360, up more than 12%, and WiseTech Global, up more than 11%.

The weakest performers included ResMed, Stockland and AMP, all down more than 7%.

What is next for the Australian sharemarket

The All Ordinaries Index posted a modest loss of 0.54% by Thursday's close, reversing the positive momentum from the previous week.

Materials dragged on the index, while a rebound in Technology and Energy provided some support in an otherwise subdued market.

Encouragingly, downward momentum appears to have eased. While it is still early, this technical shift suggests buyers are starting to reassert control.

If that continues, the market may again target the 9200 level.

This level has already triggered three reversals, making it a key resistance point.

However, repeated tests often weaken resistance over time. A fourth attempt typically increases the probability of a breakout.

Whether the market pauses at 9200 or breaks through quickly remains to be seen.

Either way, the expectation is that the All Ords could trade above this level in the second half of the year.

Even so, annual gains would remain modest. The index started the year around 9000 and has largely moved sideways through 2026.

For now, key support sits at 8800. More broadly, this remains a highly selective market.

While the index has been flat, certain sectors and stocks have delivered strong returns. That makes stock selection critical.

In conditions like these, where the index tells only part of the story, where the money is flowing matters far more than simply tracking the market.

It released the news at 4:05pm, reportedly believing the market was closed.

But while 'normal trading', where buy and sell orders are matched, had ceased, the market was not closed.

At 4:05pm, there are still phases in the trading day that can impact on a stock's price - as CSL discovered when its shares dropped 5%.

Why stocks can still move after 4pm

Investors get perplexed about why stock prices change after the end of normal trading. Fair enough.

It's a truth universally acknowledged that the ASX market is open from 10:00am to 4:00pm, isn't it?

However, like a good Regency novel, the truth is more complicated.

The many different phases in a trading day allow for different actions to occur.

Let's look at those phases on the ASX, where the bulk of cash equities trading, including shares and exchange traded funds, takes place in Australia.

Other local markets, NSX and Cboe Australia, have similar trading day cycles.

Pre-open
Buy and sell orders are entered into the system, ASX Trade, by brokers on behalf of their clients and queued according to price-time priority, see Explainer 2.

Orders can be amended or cancelled but won't be matched or executed until the market opens.

Opening single price auction
Opening auction, see Explainer 3, takes place where buy and sell orders are matched to become trades.

Orders can be cancelled but new orders and amendments are not accepted.

This is followed by a levelling or buffering period to enable orderly processing by broker systems.

Normal trading
Opening prices are calculated at the start of this phase, after which ASX Trade matches buy and sell orders in price-time priority on a continuous basis until 4pm.

What happens between 4pm and the true close

All stocks open for trading at the same time, replacing the arrangement preceding June 2025 whereby stocks opened on a staggered alphabetical basis over approximately nine minutes.

System robustness now allows large, concentrated volumes to be handled smoothly and efficiently.

Pre-closing single price auction
Continuous matching of orders ceases.

Brokers can enter, alter and cancel orders in preparation for the market close.

Closing single price auction (CSPA)
ASX Trade calculates a consensus closing price for each stock.

Post-close
New orders can be entered, existing orders amended and fresh orders executed at closing prices set during the CSPA.

Cancellations are also permitted.

Why late announcements can still move prices

Since June 2025, a listed company that releases a price sensitive announcement, such as the resignation of a chief executive, between 4:00pm and 4:10pm has its own closing auction in this phase, instead of missing the closing auction window.

This gives investors the opportunity to react to the news, adjust their orders and access the additional liquidity in this phase.

Adjust and Adjust ON
A tidying up period where orders may be cancelled and amended.

But new orders cannot be entered nor trades executed.

Then, orders that have expired or are too far from the market will be purged from the system, followed by a system maintenance adjustment state.

During the Close phase, trading messages cannot be entered or amended, and no matching or auctions occur.

The system unavailable phase enables securities to be added for the next trading day.

Why the ASX doesn't pause at lunch

One phase we don't have in Australia is a lunchtime trading pause, which is common among Asian exchanges including Tokyo, Hong Kong and Shanghai.

Originally serving an operational purpose, its practice today is largely cultural.

With the ever-faster pace of markets, and life generally, perhaps the time for a forced stop in the middle of our day has come.

Fairness, orderliness and efficiency underpin many of the different phases of a trading day.

Knowing what you can do and when is critical to being an informed and effective investor.

Why understanding market phases matters

Explainer 1

Randomised time windows are used as an orderly way to manage high-volume concentrations.

The random timing reduces excess volatility and the opportunity for 'gaming' or manipulating the system, and improves price discovery.

Explainer 2

Price-time priority is a standard exchange fairness and efficiency mechanism, which prioritises orders with the best price (either highest bid or lowest offer) and then, if there are multiple orders at the same price, according to the time received.

Explainer 3

Auctions allow investors to trade at a single point in time, bringing together the widest range of counterparties, delivering transparent and effective price formation.

An auction algorithm is used to determine a fair matching price at the start and the end of the trading day.

The warning signs are already here, and the cracks in the economy are becoming impossible to ignore.

Unemployment has climbed to 4.5%, the highest level since 2021, while employment growth has slowed.

The labour market is clearly weakening, particularly as government spending slows and sectors tied to programs like the NDIS face tightening budgets and hiring pressure.

That matters more than many people realise. The care economy has been one of Australia's biggest sources of employment growth over the past few years.

In some periods, NDIS-related jobs accounted for close to one in every five new jobs created nationally. If that spending slows, the hit to employment could be larger than markets currently expect.

At the same time, inflation is easing and the market is starting to realise what has really been driving much of the inflation problem all along: oil.

It has now spent almost two months trying to break above the US$100 to US$110 range and failed each time. That matters because markets have already stress-tested the worst-case geopolitical scenario.

Every major escalation in the Middle East sent oil to $110, yet each time negotiations or ceasefire discussions emerged, prices collapsed almost instantly, including multiple double-digit percentage falls in a single day. That tells you something important.

The market already knows where the panic ceiling for oil likely sits, but it may not yet be pricing in the downside if broader negotiations continue.

In other words, we now have a much clearer picture of the upside risk for energy prices, while the bigger surprise may now come from how quickly inflation falls if oil keeps retreating.

Meanwhile, higher interest rates have already crushed borrowing power, consumer confidence is fading, businesses are slowing hiring and households are cutting spending.

Proposed changes to negative gearing and capital gains tax are also weighing on investor confidence at the exact moment Australia is already struggling to build enough homes.

The Reserve Bank risks solving yesterday's inflation problem while creating tomorrow's recession. That's the real danger now.

Interest rates work with a lag. The damage from previous hikes is only just starting to hit the economy and by the time the slowdown becomes obvious in the data, unemployment may already be out of control.

At some point, the focus must shift from fighting inflation to protecting growth because if unemployment keeps rising while productivity keeps falling, the economy won't need another rate hike, it will need a rescue package.

What are the best and worst-performing sectors this week?   

The best-performing sectors include Consumer Discretionary, up more than 2%, followed by Information Technology and Real Estate, both up more than 0.5%.

The worst-performing sectors include Energy, down 3%, followed by Communication Services and Financials, both down more than 2%.

The best-performing stocks in the S&P/ASX 100 include Fisher & Paykel Healthcare, up more than 12%, followed by James Hardie, up more than 8% and South 32 Limited, up more than 7%.

The worst-performing stocks include ASX Limited, down more than 23%, followed by Regis Resources and Perseus Mining, both down more than 7%.

What's next for the Australian stock market? 

The All Ordinaries Index drifted lower again this week, posting a modest but disappointing 0.65% decline by Thursdays close.

The bigger issue, however, is that the Australian market continues to struggle to build momentum.

In fact, the All Ordinaries is trading around similar levels to July 2025, meaning the market has effectively moved sideways for almost a year.

This comes at a time when the US market, particularly the S&P 500, continues to make fresh all-time highs.

Since the tariff-driven sell-off in April 2025, the S&P 500 has rallied more than 55%, while the All Ords has gained only around 20%.

Of course, these are very different markets. The US is heavily weighted toward technology, while Australia is dominated by Financials and Materials.

Still, it raises an interesting question: why do we follow the US market so quickly on the way down, yet hesitate when global markets rally, especially considering we are currently benefiting from a commodities boom.

In reality, it suggests a large amount of money is still sitting cautiously on the sidelines waiting for the "right" opportunity.

From a technical perspective, the 8,800 level continues to provide solid support for the market.

Price action is also beginning to compress, suggesting the market is nearing a point where it will likely make a stronger directional move.

For now, the setup still appears to favour a bounce. However, any break below the 8,600 level would shift the outlook more negatively and increase the risk of a deeper decline.

It feels a long time ago now, but back in late 2023, I gave a speech to an investment crowd at the Windsor Hotel in Melbourne.

It turned into one of my finest hours, but only in hindsight. I left the stage kind of sweaty and drained.

We were there to help people decide what to do with their money. Tough gig.

I bought a new jacket for the event. At least I'd look good if I made a fool of myself. I said to the audience that sentiment was terrible, expectations were low and ASX shares were down in the dumps.

It was good news. It meant there was a huge opportunity to buy stocks on the cheap and position for a rebound.

The ASX was around a two-year low at this time.

When everyone feels negative, opportunity often hides

Afterwards an older gent pointed a finger at me and said, "You! You're too positive!" I don't blame him.

That was the general vibe at the time. There was no momentum in the stockmarket. The news was uninspiring.

Here we are, nearly three years later.

The S&P/ASX 200 hit a record high in February this year. It is up about 30% since that speech, and more if you include dividends.

Plenty of individual stocks have done far better than that. My little speech hit the market.

Confession. I can't take all the credit. I had help.

An Australian man called Colin Nicholson wrote a great book nearly 20 years ago called Building Wealth in the Stock Market. It's a beauty.

I owe him one because behind the scenes I was using his market framework straight out of the book.

The three-stage pattern hiding in this rally

Nicholson describes and divides a bull market into three broad stages like this:

• Stage 1 - Reviving confidence
• Stage 2 - Increasing earnings
• Stage 3 - Speculation

You know what? For such a simple description, it's been bang on over the past three years.

The market rallied over 2024 and 2025 despite no earnings growth.

Confidence came back as interest rates and inflation moderated, AI drove huge growth and excitement in the US and China's economy held together.

That was Stage 1.

I put us at Stage 2, currently, for both the US and Australia.

The ASX is seeing earnings growth again, thanks to strong resource prices and cost cutting. US market earnings improved faster than Australia and are still going up this year.

Why the easy gains may be over

Confidence is solid, although occasionally rattled by events like the Iran shock recently. There'll be a list of worries for the market to climb, because there always is.

At some point we're going to go into Stage 3, speculation. Nicholson notes multiple features about this stage.

Two are that interest rates will be relatively high. Another is that "new paradigm" theories get advanced.

We already know that interest rates are likely going higher. And there's the AI revolution seeping into popular consciousness every day.

The groundwork for a move into Stage 3 is already laid.

At this stage, I expect the speculation to appear heaviest in the resource sector as the resource supercycle narrative gains more traction.

Like all bull market narratives, there are elements of truth here that will get juiced the higher prices and stock prices go.

The market is likely to become more volatile as the market goes higher and fundamentals get stretched.

How much longer can this run last?

Timing is going to become important as the bull run ages.

ChatGPT tells me that the average ASX 200 bull market since 1990 is 46 months, or 3.8 years.

That would suggest we have until about mid-2027 to mid-2028 if that time estimate holds and we take November 2023 as the starting point for the ASX 200.

This is an educated guess, and no more.

The danger signal most investors miss

Here's the kicker you'll need to watch for.

If the market is going to peak around these dates, and please remember that this is no more than a thought experiment today, it's not going to feel dangerous or risky.

In fact, it will feel the opposite: comfortable.

Sir John Templeton famously said, "Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria."

I expect to give a speech around this time and warn people away from the stockmarket because of all the risks building.

I also expect an older gent to come up to me and say, "You! You're too negative!"

Some things change. Human nature doesn't.

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Dale Gillham, chief investment analyst at Wealth Within, to discuss the standout stocks, underperformers and what investors should look for in the months ahead.

Episode timestamps

00:00 Introduction

01:52 A tale of two markets

04:24 Macro forces and the market

07:09 Resource sector shines

10:02 CSL slump and other underperformers

12:33 Investor playbook for the second half of 2026

16:15 Conclusion

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Commonwealth Bank just suffered the biggest one-day share price fall in its history this week, plunging more than 10% in a single session.

Most of the headlines blamed the latest trading update and the federal budget, but that explanation only scratches the surface. Something much bigger may now be unfolding.

For decades, CBA traded exactly how you would expect Australia's biggest blue-chip bank to trade. The stock climbed steadily over time, delivered reliable dividends, and moved in controlled long-term cycles, but then COVID changed everything.

Since 2020, CBA has traded less like a traditional bank and more like a momentum stock, surging aggressively higher and becoming increasingly disconnected from the way banks historically behave.

At some point, the market stops paying for safety and starts paying for fantasy. That's the danger when investors begin treating a bank like a tech stock.

History also paints a worrying picture. Before CBA's previous major collapses, including the 60% fall during the GFC and the 44% decline between 2015 and the COVID low, the stock experienced the same kind of aggressive acceleration phase we saw over the past few years, and that's what makes this week so important.

This may not be a dip buyers celebrate in six months. It may be the first crack in a much larger unwind.

If history repeats, a move back toward the $95 region cannot be ruled out. That would imply another potential 50% decline from its highs.

CBA is Australia's largest mortgage lender, and investor lending has become a major engine of growth, with investor loans making up around 43% of new mortgage business at CBA.

Now the government has fired a direct shot at that investor market through the proposed changes to capital gains tax and negative gearing.

Those tax incentives are some of the biggest reasons Australians borrow to invest in property and shares in the first place. The banks built a growth machine around leveraged investors, but now Canberra is actively pulling parts out of the engine.

Higher interest rates were supposed to help banks by boosting lending margins.

Instead, banks may now face weaker investor demand, slowing credit growth, stretched households, and a government making investing less attractive.

And here's the uncomfortable truth many investors ignored for years, and that is that CBA became one of the most expensive banks in the world in 2025.

When a bank becomes priced for perfection in an imperfect economy, gravity eventually returns. This week may have been the market finally waking up to that reality.

The real question now is whether CBA was the warning shot for the banking sector, or simply the first domino to fall.

What are the best and worst-performing sectors this week?

The best-performing sectors include Materials, up more than 4%, followed by Utilities, up more than 2% and Real Estate, up more than 1%.

The worst-performing sectors include Healthcare, down more than 8%, followed by Information Technology and Financials, both down more than 5%.

The best-performing stocks in the ASX top 100 include Dyno Nobel, up more than 10%, followed by Aristocrat Leisure and Sandfire Resources, both up more than 9%.

The worst-performing stocks include CSL Limited, down more than 18%, followed by WiseTech Global, down more than 13% and Xero Limited, down more than 11%.

What's next for the Australian stock market?

The All Ordinaries Index slipped lower again this week, posting a 1.07% decline by Thursday's close.

On paper, that's not a major move, but it's the way the recent price action has unfolded that's starting to raise a few eyebrows. Let me explain.

Earlier this year, the market sold off aggressively into the March 2026 low, falling more than 10% and breaking below the previous 8600 support level before eventually finding a low around 8400.

Since then, we've seen a strong recovery attempt over recent months, but there has been one major issue.

The market failed to reclaim the previous highs and instead found resistance around the 9200 level, which I highlighted in earlier reports as a very difficult level for our market to break through.

Since that rejection, price has started to drift lower in an orderly fashion.

It hasn't been a panic-driven collapse like we've seen during previous sell-offs, but rather a slow grind lower, with each of the past five weeks trading slightly weaker than the last.

Sometimes that kind of price action can be more concerning because it suggests a lack of conviction from buyers rather than outright fear from sellers.

What makes the picture a little more contradicting is that the Materials sector continues to perform strongly.

Normally, when Materials are leading, the broader market tends to hold up better. However, heavy weakness in Commonwealth Bank and other banks has put significant pressure on the index and dragged the broader market lower.

Still, regardless of the reasons behind it, we can't ignore the structure currently developing on the chart.

The key level now becomes 8800.

If buyers can't defend that area, then a retest of 8600 becomes increasingly likely, followed by 8400, the major low established earlier this year.

Those levels should provide support, but with volatility elevated, markets can move between them far quicker than many expect.

Of course, this could still simply be a healthy pullback after the sharp recovery we experienced off the lows.

Markets rarely move up in a straight line, and some consolidation after such a fast rise would be normal.

But if that's the case, then eventually we need to see the market reclaim and break above 9200 to confirm the bullish structure is back in play.

Right now, this feels like one of those critical turning points where the next week or two could tell the story.

Add in the fact that President Trump is currently in China discussing trade, and the market has another major variable to react to.

Depending on how those talks unfold, sentiment could shift very quickly in either direction. For now, it's a market that deserves respect from both sides. Stay nimble, stay disciplined, and buckle up.

If the government cuts the current 50% CGT discount to 33% or even 25%, investors, ETF holders and even crypto investors are likely to be hit too.

This changes the equation for millions of Australians because, unlike property, the sharemarket is often the only realistic entry point for younger Australians trying to build wealth.

Many cannot afford investment properties, so they turn to shares, ETFs and long-term investing to get ahead outside of wages alone.

Now that path may become far less attractive.

Australians already take risks by investing their capital and bearing the losses when markets fall. Yet when they finally make a profit, the government now wants a larger cut of the reward.

The irony of this is hard to ignore.

Years of excessive government spending helped fuel inflation, which pushed interest rates higher and crushed household budgets.

Now, after Australians have already been squeezed by rising living costs, the proposed solution appears to be taxing investment gains even harder.

So, what does the change to CGT mean for investors? If the reward for holding long-term keeps shrinking, Australians may start questioning why they should sit through major downturns just to receive less favourable tax outcomes at the end of it.

The traditional buy-and-hold no matter what approach may become harder to justify.

Instead, this could push more investors toward becoming active risk managers rather than passive holders.

Protecting capital during major market downturns, taking profits when markets become overheated and managing tax outcomes more strategically may become increasingly important.

Because once investing becomes less rewarding, people do not just make fewer trades; they start changing the entire way they invest.

Whether you are young or nearing retirement, Australians who have never thought about actively managing their investments may soon be forced to learn because in this environment, simply holding and hoping may no longer be enough to maximise long-term returns.

What are the best and worst-performing sectors this week?

The best-performing sectors include Materials, up more than 4%, followed by Financials, up more than 2% and Industrials, up more than 1%.

The worst-performing sectors include Energy, down more than 6%, followed by Consumer Staples and Utilities, both down more than 2%.

The best-performing stocks in the ASX top 100 include Capricorn Metals, up more than 15%, followed by IGO Limited and Greatland Resources, both up more than 9%.

The worst-performing stocks include Light & Wonder Inc, down more than 10%, followed by A2 Milk, down more than 9% and Woodside Energy, down more than 7%.

What's next for the Australian stock market?

The All Ordinaries Index bounced back strongly this week with a solid gain of more than 1.5% by Thursday's close.

More importantly, the index once again found support around the 8900 level and refused to trade lower, which is a reassuring sign for the broader trend.

The week actually started off subdued, but momentum built significantly in the latter half as oil prices eased and renewed hopes of a ceasefire in the Middle East lifted investor sentiment.

This is exactly why I have continued to view this pullback as more of a manufactured crisis rather than a fundamentally broken market.

The headlines have certainly created fear, but underneath it all, many Australian companies remain in strong financial shape.

What is also helping our market is the continued strength in commodities, which is providing a much-needed tailwind for the Australian economy and the sharemarket alike.

That was reflected again this week, with the Materials sector leading the charge, while Energy pulled back sharply as oil prices cooled.

Once again, the market now turns its attention toward the key 9200 level.

This has become the major battleground for the All Ords, but there is an interesting characteristic about markets worth remembering, and that is the more times price tests a resistance level, the more likely it is to eventually break through it.

Each test tends to weaken the sellers sitting there, and if momentum continues to build, the market may finally have enough strength to push through.

One thing to be mindful of, however, is seasonality.

May has already significantly outperformed its historical average, and June is typically a softer month for our market, which could slow things down a little.

Right now, this feels like a catch-up rally after the sharp sell-off earlier in the year.

The broader picture remains constructive.

The market appears to be recovering, and this could very well be the turning point many investors have been waiting for, assuming, of course, we do not see a major escalation overseas.

I would also keep a close eye on China, because any stabilisation or recovery there could become another important driver for our miners and resource sector moving forward.

After the volatility we have had this year, it is worth appreciating the small wins.

The market is holding up far better than many expected, and that says quite a lot about its resilience.

Every time pressure builds in the Australian economy, the same solution gets rolled out. The government squeezes the people who are easiest to tax and right now, that's everyday Australians trying to build wealth.

The push to change the capital gains tax rules isn't just a policy tweak, it's a signal.

If you're buying property, investing in shares or trying to get ahead outside of your salary, you're now the target. Not because you're the problem, but because you're visible, domestic and easy to reach. Meanwhile, the biggest pools of wealth in this country remain structurally protected.

Australia is one of the most resource-rich nations in the world, yet we behave like a middleman in our own economy.

We dig it up, ship it out, lock in long-term contracts and then act surprised when domestic prices spike or the domestic tax doesn't match the scale of what's leaving the country.

That's not bad luck, that's a policy choice because here's the uncomfortable truth, it's politically easier to tighten rules on mum and dad investors than it is to redesign how the country monetises its biggest advantage.

So instead, we get the illusion of action by tweaking capital gains, talk about reducing spending and, maybe, clipping a few programs.

It creates the appearance of discipline, without ever touching the core issue, which is Australia doesn't maximise what it already owns and that's where the strategy is broken.

If this budget was about strengthening the economy, the focus wouldn't be on extracting more from individuals, it would be about expanding the base.

That means working out how to capture resource profits, prioritising domestic supply before exports in critical sectors like gas, incentivising investment rather than discouraging it through tax creep and, most importantly, shifting from a tax what's visible mindset to a grow what's valuable strategy.

Sadly, we're taxing ambition while underutilising our resource advantage and that's the real risk.

And it feels like Groundhog Day because the system is broken.

The same people are repeatedly asked to contribute more, while the biggest levers for growth sit untouched.

At some point, that stops being economic management and starts looking like avoidance.

What are the best and worst-performing sectors this week?

The best-performing sectors include Energy, up more than 2%, followed by Real Estate and Industrials, both up under 0.5%.

The worst-performing sectors include Consumer Staples, down more than 6%, followed by Materials, down more than 3% and Healthcare, down more than 2%.

The best-performing stocks in the ASX top 100 include Atlas Arteria Limited, up more than 10%, followed by Mineral Resources, up more than 7%, and Whitehaven Coal, up more than 6%.

The worst-performing stocks include Westgold Resources, down more than 11%, followed by Ramelius Resources and Woolworths Group, both down more than 9%.

What's next for the Australian stock market?

Another week of selling pressure weighed on the market this week, with the All Ordinaries closing down 1.32% on Thursday.

The move was largely driven by ongoing tensions around the Strait of Hormuz, with no clear resolution in sight. That backdrop pushed oil prices higher, which in turn lifted the Energy sector as the standout performer.

At the other end of the spectrum, Consumer Staples came under heavy pressure, falling more than 6% as rising input costs and margin compression started to bite.

From a technical perspective, the market is now at a genuine inflection point.

This could still be a healthy pullback within the uptrend that began in March, but there are early signs the market may need more time to reset. Resistance at the 9200 level comes as no surprise, as once again it has held firm.

What looks increasingly likely in the short term is a period of consolidation.

Following the strength seen in recent months, the market may need to absorb gains and work through external uncertainties. That opens the door for a more sideways environment, potentially extending into the second half of the year.

On the downside, 8600 remains the key level to watch.

It's the logical area where buyers would be expected to step back in if weakness continues. A move toward that level wouldn't disrupt the broader structure and would still sit comfortably within a constructive trend. From there, another attempt at 9200 would be the natural progression.

A break below the March lows, however, would change the picture.

That would introduce a sequence of lower highs and lower lows, signalling a shift away from upward momentum.

A more constructive outcome would be a bounce from higher levels, around 8800, followed by a renewed push toward and potentially through 9200. That would confirm buyers are still active and willing to step in earlier, which is typically a sign of underlying strength.

In this kind of environment, discipline becomes critical. Bottom-picking can be expensive when volatility is elevated.

A more effective approach is to stay focused on liquidity, stick with relative strength and watch sector rotation closely.

When the index loses direction, that's often where the real opportunities start to emerge.

That's not a typo. It's more than the average Australian annual salary earned in a matter of weeks, and if you're thinking that's just hindsight, here's the key point. Zip Co and Technology One didn't just randomly spike.

They set up in the same way, same pattern, same opportunity, and right now there are plenty of stocks lining up with that exact same setup.

Sharp selloffs, panic and headlines, then a snap back. We saw it again with Mineral Resources back in April 2025. Around the $20 mark, the same pattern showed up.

A $10,000 position with disciplined risk could have turned into more than $200,000 within six months. Not bad, but this isn't about cherry-picking winners, it's about understanding the environment we're in.

Since COVID, market volatility hasn't just increased, it's structurally changed.

Measures like the S&P/ASX 200 VIX have shown repeated spikes well above long-term averages, reflecting faster reactions to macro news, interest rate shifts and geopolitical events. What used to take months now happens in days, and that compression in time is everything because it means fear-driven selloffs are sharper and the rebounds even sharper.

For traders who understand it, this is a dream environment. One clean setup can genuinely equal a year's income, but only if you know what you're looking for.

There's also been a structural shift in participation. Since 2020, retail trading activity surged globally, with millions of new investors entering the market through low-cost platforms.

Broker data and exchange reports across markets have consistently shown elevated account openings and trading volumes compared to pre-COVID levels. More participants mean more emotion, which equates to more volatility and more opportunity.

However, when we turn on the news, everything feels uncertain and it sounds like the world is falling apart. Yet the market keeps pushing toward all-time highs.

That disconnect confuses people, but it shouldn't because markets don't move on headlines. They move on positioning, liquidity and expectation, which is why in the current environment, the edge isn't in predicting the world, it's in focusing on companies.

If volatility is creating these exaggerated selloffs and quality companies are being dragged down by macro noise, are you looking at the next opportunity?

The same setup that created moves in Zip, Technology One and Mineral Resources is forming again. The difference this time is that most people won't act on it because in the moment it feels uncertain and risky, but that's exactly what opportunity looks like if you have the knowledge and skill to take advantage of it.

This market isn't going back to how it was anytime soon. Volatility is higher, moves are faster and opportunities are bigger. But with the right approach, even a relatively small amount of capital can yield massive results.

What are the best and worst-performing sectors this week?

The best-performing sectors include Consumer Staples, up more than 2%, followed by Real Estate and Industrials, both up under 0.5%.

The worst-performing sectors include Healthcare, down more than 6%, followed by Financials, down more than 3% and Energy, down more than 1%.

The best-performing stocks in the ASX top 100 include Treasury Wines Estate, up more than 13%, followed by James Hardie Industries, up more than 8%, and NEXTDC Limited, up more than 4%.

The worst-performing stocks include Cochlear Limited, down more than 43%, followed by Lynas Rare Earths, down more than 11% and HUB24 Limited, down more than 10%.

What's next for the Australian stock market?

Sellers took control of the All Ordinaries Index this week, pushing the market down 1.59% by Thursday's close. If that's starting to trigger flashbacks of previous selloffs, take a step back. The bigger picture tells a very different story.

Over the past four weeks, the All Ords has surged nearly 9% with no selling pressure. That kind of one-sided move doesn't last forever, which makes this week's pullback less of a warning sign and more of a reset. In many ways, it was overdue. Now comes the real test, the 9000 level. If the index can hold above this zone, the path towards new all-time highs remains firmly intact.

If 9000 gives way, the next key support sits between 8800 and 8600. Given the strength of the recent rally, even a move into that range would still fall within the bounds of a healthy pullback. In fact, considering how sharp the run-up has been, a fast, aggressive drop wouldn't be unusual. The critical point is this, the 8600 to 8800 region must hold.

A break below 8600 shifts the conversation entirely and opens the door to a more serious downturn. This becomes even more relevant when you factor in seasonality. Historically, May and June tend to be weaker months for the market, suggesting we could see increased selling pressure in the near term. The hope is that April's strength provides enough buffer to absorb that.

Looking ahead, the next directional clue is likely to come from sector rotation. Technology appears to be building momentum. Financials, on the other hand, have underperformed throughout April, but any rebound in May could help stabilise the index during a typically softer period. Materials have carried the market higher recently, which also makes them the most vulnerable to short-term profit-taking.

Put it all together, and the most likely outcome may not be a sharp move in either direction, but rather a period of choppy, sideways price action. If the Materials sector cools off while Financials pick up the slack, the index could grind rather than trend.

For now, it's simple, stay focused on the key levels. They'll tell you everything you need to know about what comes next.

The possible class action relates to its 1Q FY26 results and downgraded FY26 guidance released on August 20, 2025.

After releasing its Q1 results, the James Hardie share price declined by around 34%, wiping billions of dollars from its market capitalisation.

Slater and Gordon said that on the basis of its investigations to date, the proposed proceeding is likely to allege that James Hardie engaged in misleading or deceptive conduct and/or breached its continuous disclosure obligations, in relation to its FY26 earnings guidance, first provided to the ASX on May 21, 2025; and failure to update market consensus on its 1Q FY26 performance until August 20, 2025.

The claim proposes to represent shareholders who purchased James Hardie shares on the ASX between May 21, 2025 and August 19, 2025.

"Our financial markets rely on companies providing prompt disclosure of all material information relevant to investment decision making," says Slater and Gordon head of class actions Emma Pelka-Caven.

"It is vital that listed companies are held accountable in circumstances that shareholders are misled, or material information is withheld."

This is not the first time James Hardie shareholders have encountered issues with its governance.

In October last year the ASX launched a review into listing rules related to shareholder approval requirements, particularly when it comes to mergers and acquisitions.

The ASX says due to "heightened investor interest" around James Hardie's proposed acquisition of US-based Azek, it decided to launch the review into shareholder approval requirements for mergers and takeovers of listed companies undertaking a significant transaction.

The ASX allowed James Hardie to proceed with a $14 billion transaction without an investor vote, which led to backlash from major investors including AustralianSuper, UniSuper, Aware Super and HESTA.

Following that three US pension funds lodged proxy votes to remove Anne Lloyd as James Hardie chair at the company's AGM, also in October 2025.

CalPERS, CalSTRS and the Florida State Board of Administration lodged proxy votes with Glass Lewis, calling for Lloyd to be removed as chair.

This article first appeared on FS Sustainability