On Point

It was a mixed week for global markets, as investors became increasingly concerned about rising oil prices and worries that tech companies were borrowing too much for the AI buildout. US crude rose another 10% finishing at US$101 a barrel, while Brent crude hit $110. The S&P 500 was down 2.0%, while the tech sector slipped 6.4% and the Philadelphia Semiconductor Index slumped 11.4%.

It’s been a strong year so far, with most sharemarkets performing well despite some volatility along the way. With just a few months to go, markets have plenty to contend with. We’ve got the stalemate in the Middle East, more interest hikes on the cards, as well as the New Zealand election and the US midterms. What should we expect, and how are markets positioned to finish the year?

The global reporting season ramps up this week, and it’s expected to be another very strong one. We'll hear from Bank of America, Citigroup, Goldman Sachs, JPMorgan and Wells Fargo, all on Tuesday. Other companies to monitor include Johnson & Johnson and UnitedHealth, as well as ASML and TSMC for clues about the state of AI spending.

In recent weeks and months, the NZ dollar has weakenedagainst many of our trading partners. It’s doing exactly what you’d expect it to against a shifting economic backdrop and widening interest rate differentials between ourselves and other countries. What might this mean for the economy, markets and investors?

With the election just weeks away, Treasury will release the Pre-election Economic and Fiscal Update (PREFU) on Tuesday and we'll get a fresh look at the state of our collective finances. Internationally, it will be a big week of US economic releases with highlights likely to be the PCE inflation report, the ISM manufacturing index and the latest monthly jobs report.