Market News

Bank of America's historical analysis supports the case for staying invested through the midterm vote, which could encourage buying on any pre-election weakness in US equities. Strong fourth-quarter seasonality adds to the constructive backdrop just as the S&P 500 trades near records. The bigger risk lies outside politics: with Treasury yields at multi-decade highs and oil supply still fragile, rate and energy shocks could overwhelm any seasonal tailwind. Greater clarity on fiscal policy after the vote may also matter for bond markets, where concern over government borrowing is already lifting yields.

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Midterm years are supposed to be tough for stocks, but 2026 hasn't read the script, and Bank of America says the best part of the cycle…

Morgan Stanley's buy-the-dips approach suggests that any dollar weakness may prove short-lived, especially if energy prices or risk aversion rise again. The bearish yen view keeps USD/JPY near the upper end of its range in focus, where the risk of Japanese intervention rises, particularly with US officials flagging yen weakness. Favouring the krone over the euro and Swedish krona ties FX positioning directly to the oil outlook, making Norwegian currency a beneficiary if Middle East supply concerns flare again. For the euro, the call adds to pressure from widening French spreads and Europe's exposure to energy costs.

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Two weeks after admitting it was wrong on the dollar, Morgan Stanley has dialled its bullish call back to "buy the dips",…

The Treasurer's warning puts fiscal pressure alongside monetary tightening as a theme for Australian markets, with higher interest costs likely to constrain spending in the mid-year update. A rising debt servicing bill could add to supply concerns for Australian government bonds if deficits widen, keeping upward pressure on longer-dated yields. With the RBA in a hiking cycle and global yields at multi-decade highs, the Australian yield curve faces pressure from both ends. Oil-driven inflation remains a key risk, as further energy price gains would push global yields higher and deepen the refinancing problem Chalmers described.

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Yesterday:

• Australia's Chalmers calls Iran war an economic disaster, says rising yields will cost billions

Earlier:

• <a href="https://investinglive.com/news/australian-consumer-sentiment-slumps-after-rba-hike-as-westpac-tips-another-in-november" target="_blank"…

The longer equities hold near records while yields stay elevated, the more exposed the largest growth stocks become to a repricing, because higher real yields weigh most on valuations that depend on distant earnings. Concentration adds to the risk, since a handful of megacaps are carrying the headline indices. If the gap closes through a risk-off move, Deutsche Bank sees the US dollar benefiting and the euro and high-beta currencies coming under pressure. Oil remains the wildcard: a fresh supply shock with inventories this thin would push inflation expectations and yields higher just as equities are least prepared for it.

--- Bonds are bracing for a storm while Nvidia sunbathes near $6 trillion, and Deutsche Bank says only one of them can…

The waiver lowers the tax cost for some users but adds no new supply, so its effect on diesel futures and crack spreads should be limited. Wider use of dyed fuel could shift demand between distribution channels and add to strain on already low inventories if it encourages extra buying. The bigger drivers of distillate prices remain crude supply from the Middle East, emergency stock releases and whether Washington restricts exports, a risk that would hit global diesel markets hardest. For oil traders, the move signals political pressure over fuel costs ahead of the elections, raising the odds of further intervention.

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Trump has handed every driver a red-diesel pass, but with prices above $6 a gallon, the tax break is a drop in a very…

Westpac's call for a November follow-up hike, despite the sentiment slump, signals that inflation risk still outweighs demand weakness for the RBA. That keeps support under Australian short-end yields and should limit downside for the Australian dollar on soft domestic data. Fuel is the key transmission channel, so further gains in crude prices would sharpen both the inflation pressure and the squeeze on consumers. The risk for markets is that a rate-hiking central bank meets a household sector already at recession-level gloom, raising the odds of a sharper slowdown in consumer spending into 2027.

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Australian households took one look at the RBA's latest hike and sent sentiment to recession-era lows, yet Westpac reckons the central bank…

Key takeaways:

• The AI chip industry has three layers: general-purpose chips, custom chips and manufacturing.
• General-purpose chipmakers like Nvidia benefit most from broad AI demand.
• Custom chip designers like Broadcom gain as big AI developers seek alternatives, but carry concentration and financing risks.
• Foundries need anchor customers to fill costly plants, which is why customer news moves Intel so sharply.
• Power supply, supplier diversification and concentrated manufacturing are shaping all three layers.

GPUs, ASICs and foundries: a reader's guide to the AI chip race

Why can one AI headline lift Nvidia to a record while knocking Intel lower on the same day? The answer is that "AI chips" is not a single business. Companies compete in…

Bitcoin's direction now looks tied more to US rates and the dollar than to crypto-specific news, which makes Wednesday's Fed minutes and this week's US data key catalysts. Slowing ETF inflows point to cooling institutional demand, leaving the rally reliant on macro relief rather than fresh buying. Light leverage and normal funding rates reduce the risk of a forced-selling cascade, but they also suggest limited conviction behind the move. Oil is a swing factor too: another leg higher in crude would revive inflation and rate-hike fears, historically a headwind for the token.

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A year after its peak, bitcoin has learned the hard way that it answers to the bond market, and the Fed still holds the key to its recovery.

Summary:

• Bitcoin hit a…

Nvidia's record adds weight to the AI trade at a time when much of the chip sector has already run far ahead, raising the question of whether the leader is now catching up or the sector is getting stretched. The buyback provides a steady source of demand for the shares, which may help cushion pullbacks. As the largest stock in the major US indices, Nvidia's moves carry outsized influence over the S&P 500 and Nasdaq, so its strength is helping keep broader equity benchmarks firm despite elevated bond yields. A shift in the AI bottleneck towards power and land would also put utilities and data centre infrastructure more firmly in focus.

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Nvidia is closing in on $6 trillion, yet the strangest part of its record run is that it has spent…

Oil prices dipped slightly on Monday, suggesting traders are weighing improving Hormuz shipping and near-prewar output more heavily than Nasser's inventory warning. That reaction may understate the risk: with usable stocks this thin, any fresh disruption would land on a market with almost no buffer, raising the odds of sharp upside price spikes. The case for a tighter-for-longer market also challenges futures curves that price a return to normal next year. Refined products look the more acute pressure point, with fuel prices outpacing crude, regional refining capacity impaired and Chinese fuel exports halted, keeping diesel and gasoline cracks supported.

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Earlier:

• Crude oil technicals: Middle east tension has crude oil futures moving…

Key takeaways:

• Musk confirmed TSMC is in talks about Terafab, describing them as just discussions. He suggested TSMC chips would likely supplement Intel's rather than replace them.
• Intel is the only named manufacturing partner at Terafab, which makes the project its most visible outside foundry win.
• A TSMC-owned and -operated plant at Terafab would turn that exclusive role into a shared one.
• Intel's foundry division earns little from outside customers, so its high valuation leans on future wins.
• Watch for a formal TSMC deal and Intel's 14A design kit release this month.

Why a few words from Musk can move a $600 billion chipmaker: Intel and the Terafab test

Intel shares fell on Monday after Elon Musk confirmed that Taiwan Semiconductor…

Closer supervisory attention could make banks more cautious about lending against private credit collateral, tightening funding for nonbank lenders and possibly raising borrowing costs for the mid-sized companies that rely on them. Bank stocks with large lending to nonbank financial firms may face more questions on disclosure and collateral valuations during the upcoming earnings season. The link to AI disruption risk in software loans adds a new channel through which tech-sector weakness could reach credit markets. The review also lands as broader risk assets look complacent compared with stress in sovereign bonds, so any sign of trouble in private credit could add to pressure on credit spreads.

The Fed is knocking on Wall Street's door…