Global equities advanced overnight as investors reacted positively to news that former U.S. President Donald Trump plans to meet Chinese President Xi Jinping next Thursday, a development that rekindled hopes of improved U.S.–China relations and trade cooperation. Gold bounced amid renewed geopolitical uncertainty, while oil prices climbed after the U.S. imposed fresh sanctions on Russia, tightening supply expectations. In equities, Tesla and Amazon led gains in the U.S. session, reflecting improving sentiment toward large-cap growth names.

Commentary from Industry Leaders

There’s been a lot of talk about high valuations, AI bubbles and worries about how far stocks can rise, so I thought it would be fitting to deconstruct some insights from Goldman Sachs on the issue. 

The key take-aways from the article are below:

• Goldman Sachs argues that despite elevated valuations, global equities have not yet entered full bubble territory. 

• Unlike prior speculative episodes (e.g., the late 1990’s tech bubble), the current rally is underpinned by companies with strong fundamentals: robust balance sheets, high profitability and cash-flow generation. 

• Some warning signs are present: high market concentration (particularly among technology/AI leaders), rising valuations and increasing competition in the AI space. 

• The argument hinges on the fact that many of the dominant companies are incumbents with proven business models, unlike speculative cohorts in past bubbles. This gives the firm reason to treat the current phase are growth driven rather than pure mania. 

That said, diversification is emphasised, because of the narrow leadership and concentrated gains, investors are advised to broaden exposure across sectors and geographies rather than simply buy more of the big winners. 

The conclusion is that there is room for further upside, as fundamentals support the rally but it’s not without risk. The parts of the market showing signs of over-stretch are the highly concentrated, AI-driven segments. Therefore, remain selective and identify companies with strong earnings growth and solid business models. Building a more balanced portfolio, including non-tech sectors or companies outside the Magnificent 7 may help mitigate future shocks. 

Economic News 

Oil prices jumped overnight after the US imposed sanctions on two of Russia’s largest oil producers, Rosneft and Lukoil, prompting concerns about tighter global supply. 

• Energy exposure may benefit: With oil rising, energy companies and commodity-linked assets may gain. Investors overweighting energy or related resources could see upside.

• Geopolitical / supply-shock risk premium: This event underscores how geopolitics can quickly alter commodity supply and global flow assumptions, implying elevated “risk premium” on portfolios exposed to commodities, emerging markets, or energy-intensive industries.

• Diversification benefit: Portfolios that are heavily skewed to growth tech or consumer discretionary may face headwinds if commodity inflation creeps in. Holding some allocation to inflation-hedged assets, commodities or broader cyclicals may help buffer.

Market Snapshot 

• Australia: Markets are up today, tracking Wall Street's recovery. 

• United States: Dow +0.31%, S&P 500 +0.58%, Nasdaq +0.89%. 

• Bonds: US 10-year yield at 4.1% and Australian 10-year yield at 4.12%.  

• Gold: Increased overnight.

Key Events Coming Up

• Tuesday, October 28, 2025: US CB Consumer Confidence Report

• Wednesday, October 29, 2025: FOMC Statement

• Wednesday, October 29, 2025: US Fed Interest Rate Decision

• Thursday, October 30, 2025: Trump & Xi Jinping Meet

Investment Update

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