AI Capital Allocation and Market Implications
This week’s Investment Matters examines the topic of AI investment within a historical framework of overinvestment and the misallocation of resources.
A rash of new investment in artificial intelligence in the US, especially by Nvidia, the chipmaker, and OpenAI, the owner of ChatGPT, has been announced in recent months. Investment in data centres and IT helps explain a significant portion of overall US growth in recent years. But markets have begun to concentrate on the financial engineering and cross-company relationships that funded this investment.
September CPI: Implications for Markets and Housing
The September CPI print has shifted the narrative surrounding monetary policy in Australia. While global inflation has shown tentative signs of moderation, the Australian experience highlights the structural persistence of price pressures in non-tradable goods and services.
Critical CPI print reduces risks of policy error
this week’s fascinating Investment Matters as Craig explains the trepidations surrounding Wednesday’s release of the estimate for the Q2 Consumer Price Index.
The market responded positively this week to an encouraging reduction in inflation in Australia. The direction and scale of the response can be readily understood – moving from the risk of higher interest rates to the opportunity of lower rates is a positive for Australian companies.