Global markets kept rolling in October, up 2.6% for the month. The rally was driven by interest rate cuts, strong corporate earnings out of the US, and a standout performance from Japan. 

*Source: Factset: Kōura returns are pre-tax and post-fees. Returns over 12 months are annualised. Local market returns use the relevant markets indices; NZ Equities uses NZX50 index; US Equities uses S&P500 index; Rest of World uses MSCI EAFE Index; Emerging Markets uses MSCI Emerging Markets Index, Fixed Interest uses Bloomberg Aggregate NZ Composite Bond Index. Bitcoin return is the USD change in price of Bitcoin. The return for an Aggressive Portfolio represents the equivalent of 95% growth and 5% income assets investing in core Kōura Funds. The return for a Growth Portfolio represents the equivalent of 80% growth and 20% income assets by investing in core Kōura Funds. Returns are calculated by Kōura. Past performance is not a reliable indicator of future performance. Returns are not guaranteed, and investment values may fluctuate over time. 

US earnings season delivers the goods 

The US has just wrapped up its Q3 reporting season, and the results were impressive, earnings grew around 10% compared to last year. Growth continues to be fuelled by the AI boom, with strong demand for chips, data centres, and energy. But it’s not just tech companies leading the way — more traditional businesses are also seeing stronger margins as they put AI to work and benefit from the inflationary momentum of recent years. 

Despite ongoing talk of tariffs, there’s still no clear evidence they’re hurting company earnings. Strong profits and a resilient economy continue to give us confidence in the US market, even with valuations sitting on the higher side. 

Adding to the optimism, the US Federal Reserve officially kicked off its long-awaited rate-cutting cycle this month. While the move was widely expected, it’s reassuring to see the central bank confirm that monetary policy is finally shifting toward supporting growth. Markets have taken it as a positive signal that inflation is under control, and the Fed is comfortable easing off the brakes, a welcome step after two years of tightening. 

The Nikkei jumped an incredible 17% in October after Sanae Takaichi was elected Prime Minister on a pro-growth, pro-stimulus platform. Investors are celebrating her commitment to fiscal spending and deregulation, betting she’ll deliver a mix of low interest rates, government support, and steady inflation: the perfect combination for markets. Let’s just hope she’s a bit more successful at driving growth than Chris Luxon! 

Back home, the NZX 50 edged up 1% in October, helped by a hefty 0.5% interest rate cut from the RBNZ. The central bank is clearly prioritising growth, continuing to cut even with inflation sitting at 3%. 

Encouragingly, a few signs suggest the economy might finally be turning a corner. Housing data, car sales, and other indicators are starting to look a little more positive — perhaps some early green shoots after a long winter. 

Gold surged to a new record high of USD 4,113 an ounce, up 6.5% for the month. It’s becoming the safe haven of choice for investors nervous about the ballooning US deficit, the politicisation of the US dollar, and global inflation that remains stubbornly sticky. 

Bitcoin, on the other hand, slipped slightly to around USD 110,000 after hitting highs of 125,000 earlier in the month. Some investors have taken profits after the big rally, but as always, the question remains: what will spark the next move higher? 

Dislciamers:

*Bitcoin is highly volatile and not suitable for all investors. Before investing part of your KiwiSaver balance in the Koura Bitcoin fund, ensure you fully understand the risks associated with cryptocurrencies: https://shorturl.at/U6Mkp, and/or consider seeking financial advice. 

*The views and opinions expressed in this article are those of Rupert Carlyon. This content is for informational purposes and should not be considered financial advice. Before making any financial decisions, consider consulting a financial adviser. 

*Kōura Wealth Limited is the issuer and manager of the Kōura KiwiSaver Scheme. A copy of the Product Disclosure Statement is available at kourawealth.co.nz/documents