US equities pulled back overnight as a powerful early-session rally caused by Nvidia’s blockbuster earnings unwound amid renewed doubts over a December Fed rate cut. Major benchmarks swung sharply, with the Dow reversing a 700-point gain to close down 0.84%, while the S&P 500 and Nasdaq gave up strong intraday advances to finish 1.5% and 2.1% lower. 

Nvidia’s initial surge faded despite demand for its Blackwell chips, pulling broader AI names like Oracle and AMD into the red. The catalyst? A shutdown-delayed jobs report showed 119,000 new positions which was better than expected. Following this data, the odds of another rate cut fell to below 40% and reignited concerns over sticky economic momentum. 

Questions persist about whether AI-driven revenues can justify the massive capital being deployed.

Commentary from Industry Leaders

This week I’ve deconstructed part of Australia’s Future Fund’s (Australia’s Sovereign Wealth Fund) Position Paper - Portfolio Resilience Part 1. 

The Future Fund’s latest paper on portfolio resilience is one of the clearest signals yet that the investment environment Australians have known over the past 30 to 40 years has shifted. The central message is straightforward. The old rules of portfolio construction are no longer reliable and portfolios built on a narrow set of exposures will struggle to stay resilient in the decade ahead.

For context, the Future Fund’s mandate is to generate CPI plus four to five percent a year over the long term. That is a high hurdle. They cannot rely on blind faith in equities or assume that property and bonds will behave the way they used to. They have had to rethink how they allocate capital, manage risk and prepare for shocks. That is the core of this paper and it is highly relevant for everyday investors who are predominantly invested in ASX shares and residential property.

Below are practical, actionable steps drawn directly from the Future Fund’s thinking.

Step 1: Reduce reliance on one economic script.

If most of your wealth depends on low inflation, low rates and rising valuations, you need exposures that function outside that scenario. That means incorporating assets that benefit from or withstand inflation rather than suffer from it.

Step 2: Build a genuine income sleeve outside the ASX.

Franked dividends are strong but cyclical. Consider adding high-quality private credit, senior secured floating-rate exposures and income assets with contractual cash flows. This reduces the need for equity markets to carry your entire return profile.

Step 3: Introduce inflation-linked cash flow assets.

This includes infrastructure, logistics, healthcare property and contracted revenue assets. These protect purchasing power when inflation surprises.

Step 4: Diversify across return drivers, not just asset classes.

Most Australian portfolios look diversified on paper but are tied to the same two risks: the Australian economy and Australian interest rates. A more resilient mix includes exposures that respond differently when inflation rises, policy shifts or markets stress.

Step 5: Reassess residential property’s role.

Property is not a bad investment, but it is illiquid, slow-moving and increasingly sensitive to regulation and borrowing capacity. It should be a component of wealth, not the foundation.

Step 6: Stress test your portfolio against more than one future.

This is the Future Fund’s most important lesson. Build a portfolio that can function across multiple regimes, not just the perfect one.

Economic News 

This week’s key economic developments centred on the delayed U.S. jobs report, which showed 119,000 new jobs, stronger than expected, while the unemployment rate rose to 4.4%, its highest since 2021.

Jobless claims remained steady despite the 43-day government shutdown, but ongoing layoffs in major companies highlight a labour market that is resilient on the surface yet softening underneath. With key data distorted by the shutdown, the economic picture is less clear, adding uncertainty around whether the Federal Reserve will cut rates again in December.

For portfolios, this mixed backdrop means greater volatility and less clarity on policy direction. Stronger labour data reduces the likelihood of further rate cuts, pressuring growth stocks, while underlying weakness and data disruptions elevate risk across markets. A diversified approach across asset classes, rather than concentrated exposure, remains the best defence in a market where sentiment can shift quickly.

Market Snapshot 

• Australia: The ASX has fallen to a six-month low.

• United States: Dow -0.84%, S&P 500 -1.56%, Nasdaq -2.15%. 

• Bonds: US 10-year yield at 4.10% and Australian 10-year yield at 4.46%.  

• Gold: Increased overnight.

Key Events Coming Up

• No major events coming up over the next week

Investment Update

I am pleased to share a high-level summary of an institutional-grade federal government headquarters with long-dated income, future-proofed sustainability credentials and a compelling entry valuation in the current market.

 We have been told by the product distributor that demand is high for the asset and there is a limited allocation available.

The building is the National Headquarters for the Department of Health, Disability & Aging, a Top-10 Federal Department. The building comprises 46,029 sqm of purpose-built accommodation with 374 car parks, completed in 2010 and significantly upgraded between 2019–2025. It is one of only five 6-Star NABERS-rated assets in the ACT, positioning it at the forefront of energy and water efficiency. A further $64 million tenant-funded fit-out is being completed in 2025, supporting the Federal Government’s “New Way of Working” program, highlighting the Commonwealth’s long-term commitment to the location. 

Investment Thesis

 Secure, Long-Dated Government Income

• 99.6% leased to the Commonwealth until 2035 with fixed 3.25% annual rent increases.

• 9.2-year WALE at acquisition (Nov 2025). 

Defensive Yield Profile

• 9.3% Year 1 cash yield and 10% average annual yield over the fund life.

• Targeting 1.9x equity multiple and 16%+ IRR over 5 years (pre-tax, post-fees). 

• 8.00% cap rate acquisition, representing:

  • 271 bps above peak 2022 valuations

  • 138 bps above the ACT 10-year A-Grade average

  • 40%+ discount to replacement cost

  • Rents currently 26% below economic levels
    These factors suggest an attractive entry point and potential valuation upside.

This investment offers exposure to high-quality government income, inflation-protected rental growth, premium ESG credentials and a highly defensible tenancy, wrapped into a core-plus return profile in a market where prime government-leased assets remain tightly held.