As we touched on earlier, volatility on the index level is almost boring, whereas it’s been a rollercoaster ride on the stock and sector front, with some added spice from the commodities and Bitcoin. Markets are unfolding with greater momentum, with moves/trends that would in the past have taken months or quarters to unfold, starting & finishing in just a few weeks, or less. Is an exciting time for investors, but it doesn’t suit proud investors/traders. We must all be prepared to admit when we are (maybe) wrong and take losses if/when required. At the moment, MM believes it’s a time to err on the side of caution, and we are realigning our portfolios accordingly – no doubt at some stage later in 2026, we will feel more comfortable to move back up the risk curve.
There have been many AI-driven selloffs in the three years since ChatGPT burst into the mainstream. Nothing, though, quite rivals the rout rippling through stock and credit markets this week. For one, there’s the sheer speed and breadth of it. In the span of 2-days, hundreds of billions of dollars were wiped off the value of stocks, bonds and loans of companies big and small across the US. Software stocks were at the epicentre, plunging so much that the value of those tracked in iShares ETFs had dropped almost $US1 trillion over the past seven days. The spark was innocuous on its face: AI startup Anthropic PBC released a new tool for legal work, like reviewing contracts. On its own, the product isn’t seen as a game-changer. But coming after a year in which Anthropic’s coding tools helped transform software development, part of a broader wave of AI innovation, the four-paragraph launch announcement was taken extremely seriously.
- The enormous inflows we’ve witnessed into ETFs, such as those exposed to tech and precious metals, have exaggerated volatility when everyone looks for the exit at the same time.
This morning, we’ve briefly looked at 5 ASX-traded ETF’s that have been in the thick of recent market action.
