After a bold start to the year, markets moved more deliberately. Growth cooled, central banks turned cautious, and investors focused on clarity and consistency over momentum. It wasn’t a standout finish but it was a steady one. Let’s break it down.
Oct
A gentler gear
October set the tone for a more cautious quarter. After a strong run earlier in the year, global markets began to move with more subtlety. Investors remained engaged, but the focus shifted toward companies with solid earnings and resilient cashflow - not just exciting stories.
Tech remained a big part of the market narrative, but leadership narrowed. High-growth names started to wobble, while companies tied to infrastructure, semiconductors, and digital investment -especiallyin Asia and Europe -found stronger footing.
Closer to home, Australian shares continued to grind higher. Commodity strength supported resource stocks, and income-focused investments benefited from steady yields. While domestic growth stayed sluggish, there were signs of inflation easing - a hopeful signal for the months ahead.
Nov
Selectivity returns
By November, the rally in markets was still ticking along, but investors were becoming more discerning, finding opportunities in the right sectors rather than across the board.
In Australia, attention shifted away from earlier defensive winners and towards smaller companies and real assets. These sectors tend to do well when markets believe conditions are starting to stabilise. Property, infrastructure, and high-quality credit became increasingly appealing, especially as bond yields began to normalise.
Globally, Europe and the UK continued to perform strongly, with undervalued companies benefiting from firm global demand. Japan remained in focus too, with structural reforms and policy support keeping investors interested.
The inflation outlook improved in many major economies, though central banks stayed cautious. Wage pressures and services inflation meant interest rate cuts would likely come slowly - but they were now clearly on the horizon.
Dec
A steady close as markets reset for 2026
December delivered a modest finish to the year, but with plenty happening under the surface. The US Federal Reserve cut rates again, its second cut since mid-year, taking its cash rate into the mid–3% range. The move helped support investor confidence heading into 2026, though the Fed signalled that any further easing would be gradual.
Bond markets ended the year on a high note, rounding out one of their strongest 12-month performances in over a decade. Yield curves began to steepen, restoring a more balanced outlook for investors across short and long-dated bonds.
Credit also finished strong, with tighter spreads and low default expectations creating steady income opportunities. Meanwhile, real assets - including infrastructure, industrial metals, and gold held their value, supported by infrastructure spending and persistent geopolitical risk.
In Australia, the RBA left rates unchanged. Although inflation had fallen from earlier peaks, the central bank remained cautious, citing the need for clearer signs that services inflation and consumer expectations were coming under control.
After a big year in markets, the final quarter offered a sense of consolidation. It was less about chasing returns and more about positioning -with investors favouring stability over speculation.
Looking ahead to 2026, growth is expected to moderate, valuations remain high, and the path to lower rates is now in motion but not guaranteed. This is an environment where quality counts.
Now’s the time to stay diversified, focus on long-term goals, and build around the life you want to live - not the latest headline.