Global markets at all time highs

Global stock markets are trading at all-time highs, prompting many investors to question whether this upward trend can continue or if a correction may be on the horizon. We have summarised below some of the key headwinds (risk factors) and tailwinds (supporting factors) to provide an overview of what could support further market gains, as well as the potential risks and challenges ahead.

• Monetary Policy

  • Headwinds: Sticky inflation limits interest rate cuts, high real yields hurt valuations, policy divergence adds volatility

  • Tailwinds: Rate cuts expected in some regions, central banks may ease if data weakens, lower long-term rates could help

• Macroeconomic Growth

  • Headwinds: Slowing global growth, weaker consumer/business spending, capex slowdown in demand-sensitive sectors

  • Tailwinds: Resilient tech/AI sectors, Emerging Markets (EM) growth (India, SE Asia), fiscal support in some economies

• Valuations

  • Headwinds: High valuations, esp. in US tech, narrow market leadership, risk of re-rating if growth disappoints

  • Tailwinds: Value sectors still attractive, broader market participation, structural growth themes (AI, clean energy)

• Geopolitics

  • Headwinds: Rising global tensions (Middle East, Ukraine, Taiwan), trade fragmentation & tariffs, policy uncertainty in US/EU

  • Tailwinds: Policy reforms could boost markets, trade de-escalation possible, infra & industrial policy support growth

In our view, the answer largely depends on each investor’s risk tolerance, risk capacity, investment timeframe, goals, and objectives. Our Goals-Based Investment approach is designed to help investors navigate these risks and challenges and make the most of the opportunities that arise.

Please contact us if you have any concerns about the markets or would like to discuss how these developments may affect your investment strategy.

Good news for Kiwi home buyers

The Reserve Bank’s unexpected jumbo cut of the Official Cash Rate to 2.50% signals a clear effort to boost confidence among property owners and first-time buyers alike. This larger-than-expected 50 basis point reduction aims to encourage spending and investment amid ongoing economic uncertainty, particularly as signs of a modest recovery in consumption emerge.

Mortgage lending rates in New Zealand have seen a welcome decline, providing relief to Kiwis with mortgages and those looking to buy a home. According to current data from leading lenders, one-year fixed rates range from about 4.49% to 5.09%, while three-year fixed rates generally sit between 4.85% and 5.49%.

Variable floating rates are also competitive, with some lenders quoting rates around 5.7% to 6.3%. These lower rates represent a significant drop from the higher levels seen in the past few years, creating opportunities for borrowers to refinance at better terms or enter the housing market with more affordable financing.

This easing in mortgage costs is positive news for Kiwis managing existing debts or aspiring to buy, as it reduces monthly repayments and enhances affordability in a market where housing costs remain a key concern. It also supports economic confidence by making borrowing less costly amid broader financial pressures.

For those looking to enter the property market or manage mortgage repayments, this move could mean lower borrowing costs and a stronger incentive to act, even though the economy still faces significant spare capacity and risks of cautious consumer behaviour.

If you’d like to speak with Adrian, our in-house mortgage specialist, feel free to get in touch, and he’d be happy to help, no matter which stage of the property journey you’re on.

Getting the most out of ChatGPT

Are you using generative Artificial Intelligence (AI) tools like ChatGPT to their full potential?

AI chatbots, such as ChatGPT, Google Gemini, Microsoft Copilot, Perplexity, Claude, and DeepSeek, are now highly integrated into our digitally dependent world and daily routines, and they serve many purposes, from helping to answer simple questions to generating images based on a prompt.

The above video from business.govt.nz covers some general tips and tricks to use ChatGPT more effectively.

Aside from these tips, here are a few more helpful ways to get the most out of AI chatbots:

• Create a Persona: Give the AI a persona, such as an HR manager or a teacher, and then give it a follow-up prompt to receive a response in a manner and style that match the persona.

• Format the output: You can ask AI to deliver any response in the format you like, such as in a bulleted list, a table, or code.

• Provide examples: You can provide AI examples of your own writing (e.g., an email, social media post, or article) and have it write in your style.

Keep in mind that any data you provide AI may not be private. It’s important to check the privacy policy for any AI chatbot that you use and to avoid inputting sensitive information if data privacy is a concern.

Market update

United States

• Major indices hit record highs fuelled by AI optimism and strong corporate earnings.

• The S&P 500 recently closed at a fresh record high (6,740.28 as of 7 October 2025), driven by gains in technology and artificial intelligence-related stocks, reflecting strong investor optimism despite ongoing macroeconomic uncertainties.

• A US government shutdown delayed key economic data but did not dampen investor sentiment.

• Small-cap stocks set records, supported by tech sector gains like AMD’s 23% rally on AI chip deals.

• Fed rate cut expectations increased due to signs of a cooling labour market.

  
  

New Zealand

• NZX 50 recently posted a 3%+ weekly gain, boosted by expectations of an OCR cut by the Reserve Bank.

• Labour market data showed fewer filled jobs year-over-year, signalling mixed economic conditions.

Australia

• The Australian market fell 0.3% to 8,953 on Tuesday (7 October 2025), extending losses due to weakness in banking and consumer sectors.

• Energy stocks fell due to a drop in oil prices after OPEC comments.

• Inflation data showed a sharper-than-expected rise, raising monetary policy concerns.

Europe

• European indices like the Stoxx 600 and FTSE 100 hit record highs in early October.

• Gains were broad, led by banks, tech, luxury goods, and healthcare sectors.

• Political risks emerged with the French PM’s resignation but did not derail markets.

Asia

• Japan’s ruling party elected Sanae Takaichi as leader, weighing on the yen with stimulus expectations.

• Hong Kong’s Hang Seng rallied nearly 4% on tech stock strength.

  China showed mixed economic signals with manufacturing gains but service sector weakness.

• Gold prices rose to multi-year highs (USD 4,059.05 per ounce as of October 2025, up 53% from the previous year) amid global uncertainty.

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If you would like to discuss your current portfolio, retirement planning needs, goals-based investing approach, or any other financial planning matters please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.

We are always happy to help.

Sincerely,

The Team at Trilogy Financial Solutions