The RBNZ held the OCR at 2.25%, signalling inflation is returning to target while revising its future rate path slightly higher. Policy remains accommodative for now, but gradual normalisation is expected.Summary:Reserve Bank of New Zealand leaves OCR unchanged at 2.25%.Inflation slightly above 1–3% band at end-2025 but expected back inside target this quarter.Forward OCR track revised higher versus previous projections.Economy in early recovery; labour market stabilising but unemployment elevated.Committee signals policy to remain accommodative “for some time,” with gradual normalisation ahead.The Reserve Bank of New Zealand (RBNZ) left its Official Cash Rate unchanged at 2.25%, striking a cautiously balanced tone as it navigates an early-stage recovery, above-target inflation and a gradually firming policy outlook.Annual CPI was described as “slightly above” the Monetary Policy Committee’s 1–3% target band at the end of 2025, with food, electricity and council rates cited as key contributors. However, the central bank expressed confidence that inflation is most likely returning to within the band in the current quarter and tracking toward the 2% midpoint over the next 12 months, supported by spare capacity, modest wage growth and contained core inflation.The economic backdrop remains mixed. The RBNZ said the economy is at an early stage of recovery, with strength in commodity prices supporting agricultural and regional activity. Manufacturing, construction and some retail sectors are benefiting from earlier OCR cuts. Yet households remain cautious, house price growth is weak and unemployment remains elevated despite signs of labour market stabilisation.The most market-relevant development lies in the updated policy track, which signals a slightly firmer medium-term stance:RBNZ sees Official Cash Rate at 2.26% in June 2026 (PVS 2.2%)RBNZ sees Official Cash Rate at 2.52% in March 2027 (PVS 2.34%)RBNZ sees Official Cash Rate at 2.62% in June 2027 (PVS 2.45%)RBNZ sees Official Cash Rate at 3.0% in March 2029RBNZ sees TWI NZD at around 68.0% in March 2027 (PVS 66.0%)RBNZ sees annual CPI 2.1% by March 2027 (PVS 2.2%)The upward revision to the OCR path suggests that while the near-term stance remains accommodative, the Committee anticipates a gradual removal of stimulus as the recovery firms and inflation settles sustainably near target.Minutes revealed a consensus decision to hold rates, though members acknowledged risks in both directions. Some highlighted the danger of policy remaining accommodative for too long, with inflation potentially more persistent. Others warned against reacting too quickly to firms’ pricing intentions, which could entrench expectations of stronger demand.The Committee reiterated that if the economy evolves as expected, policy will remain accommodative for some time before gradually normalising. However, the subtly higher projected rate path implies that markets may need to price a slightly steeper tightening profile over the medium term.For NZD and rates traders, the message is clear: steady for now, but the direction of travel has shifted marginally upward. This article was written by Eamonn Sheridan at investinglive.com.

This post is just for getting the decision out quickly. Added - MUCH more here, details analysis etc:RBNZ holds OCR at 2.25%, lifts projected rate path modestly higherNZD/USD has been marked a little lower on the announcement. This article was written by Eamonn Sheridan at investinglive.com.

In line data. This article was written by Eamonn Sheridan at investinglive.com.

Westpac’s Leading Index slowed to near-flat in January, signalling growth momentum has slipped back to trend. Consumer and housing weakness offset commodity support, with GDP still seen at 2.5% in 2026.Summary:Westpac–Melbourne Institute Leading Index slows to +0.02% in January (from +0.44%).Growth momentum shifts from slightly above trend to broadly in line with trend.Consumer sentiment and dwelling approvals the main drags.Commodity price gains cushioned weakness, but AUD strength may dilute support.Westpac still sees 2.5% GDP growth in 2026, with next RBA hike likely in May.Australia’s growth pulse has flattened at the start of 2026, with the Westpac–Melbourne Institute Leading Index slowing sharply in January, signalling that momentum has slipped back to trend after a modest lift late last year.The six-month annualised growth rate of the index — which tracks economic activity three to nine months ahead — eased to +0.02% in January from +0.44% in December, effectively stalling. Westpac said the earlier second-half pick-up in 2025 was never especially convincing, and the latest reading suggests that momentum has once again faded.The weakness was centred on the domestic consumer and housing sectors. The Westpac-MI Consumer Expectations Index shaved 0.16 percentage points off the growth rate over the past six months, while dwelling approvals detracted a further 0.23 points. While approvals have been volatile month to month, softer consumer sentiment appears more entrenched, reflecting shifting interest-rate expectations and the impact of February’s Reserve Bank hike.Commodity prices provided some offset, contributing 0.36 percentage points over the past half-year. However, Westpac noted that gains in USD-denominated commodity prices were partly diluted by a firmer Australian dollar, with the recent acceleration in AUD strength likely to dampen future readings if sustained.Despite the softer signal, Westpac continues to forecast GDP growth of 2.5% in 2026, broadly in line with trend. The bank expects the Reserve Bank of Australia to tread cautiously at its March meeting but sees another 25bp rate hike in early May, contingent on a still-elevated quarterly CPI reading due April 29.For now, the Leading Index suggests the tightening cycle is beginning to weigh, reinforcing expectations of an “on again, off again” growth profile this year. This article was written by Eamonn Sheridan at investinglive.com.

Exports to the US -5% y/yto EU +29.6%to China +32% y/y I'll have more to come on this separately. This article was written by Eamonn Sheridan at investinglive.com.

The IMF urged Japan to continue gradual rate hikes toward neutral by 2027 and warned against cutting the consumption tax, highlighting fiscal risks as Takaichi’s government pushes ahead with tax relief plans.Summary:International Monetary Fund urges Japan to keep raising rates gradually to neutral by 2027.Warns against cutting the consumption tax, saying it would erode fiscal space and raise debt risks.Calls for near-term fiscal restraint and a credible medium-term anchor.Says Bank of Japan should intervene only if bond market liquidity deteriorates.Political tension: PM Sanae Takaichi and allies continue backing a sales tax pause despite IMF caution.The International Monetary Fund has delivered a pointed message to Japan: continue tightening monetary policy, avoid fresh fiscal loosening, and think carefully before tampering with the consumption tax.In its latest policy assessment, the IMF said the Bank of Japan is “appropriately withdrawing monetary accommodation” and should continue raising interest rates gradually so the policy rate reaches a neutral setting by 2027. With inflation running above the 2% target for nearly four years and the policy rate already lifted to 0.75%, the highest in three decades, the Fund argues that steady normalisation remains justified as long as the baseline outlook holds.The sharper warning, however, was directed at fiscal policy. The IMF cautioned that reducing Japan’s consumption tax would “erode fiscal space and add to fiscal risks,” leaving the country more exposed to future shocks. It urged near-term fiscal restraint and the establishment of a clearly defined medium-term anchor to stabilise public finances.That advice appears unlikely to shift the domestic political calculus. Prime Minister Sanae Takaichi and her allies have continued to advocate suspending the 8% food sales tax for two years following her election victory, framing the move as necessary support for households. Markets have already shown sensitivity to the prospect of looser fiscal settings, with bond yields and the yen reacting sharply late last year amid deficit concerns.The IMF also addressed financial stability. As the BOJ reduces bond purchases and shrinks its balance sheet, it should monitor market liquidity closely. If volatility undermines functioning, the central bank should stand ready to deploy targeted emergency bond-buying operations. At the same time, the Fund welcomed Japan’s commitment to a flexible exchange rate regime, arguing that currency flexibility helps absorb external shocks and preserves monetary policy credibility.For investors, the tension between IMF orthodoxy and Tokyo’s fiscal ambitions remains a central risk theme for 2026.Japan PM Takaichi will probably show the IMF a different finger on their sales tax recommendation. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s manufacturers rebounded in February to +13, but services sentiment eased to +25, highlighting an uneven recovery. Forward indicators point to modest softening into May.Summary:Reuters Tankan: manufacturers index +13 in Feb (vs +7 Jan), highest since November.Non-manufacturers slip to +25 (vs +32 Jan), signalling softer services momentum.Machinery strongest; transport machinery weaker on auto sales and China rare-earth concerns.May outlook: manufacturers seen at +10, non-manufacturers +23.Survey underscores uneven recovery amid tariffs, inflation and fragile domestic demand.Japan’s factory sector regained some composure in February, but the broader economy continues to show signs of uneven momentum, according to the latest Reuters Tankan survey.The manufacturers’ sentiment index rose to +13 in February, up from +7 in January and marking the strongest reading since November. The rebound, the first in three months, was supported by firmer machinery orders and a still-weak yen, which continues to underpin exporters’ earnings when profits are repatriated.Machinery makers led the improvement, with their sub-index jumping to +15 from zero. Respondents cited improved visibility on orders and profits, alongside currency stability. The data suggest pockets of resilience in capital goods and export-linked sectors, even as policymakers remain wary of the inflationary consequences of prolonged yen weakness.However, the underbelly of the survey reveals a more nuanced picture. Sentiment in transport machinery, including automakers and suppliers, slipped to +33 from +40, with managers pointing to soft domestic auto sales and tighter Chinese rare-earth regulations as headwinds. External trade frictions and supply-chain sensitivities remain key watchpoints.Outside manufacturing, confidence cooled. The non-manufacturers’ index fell to +25 from +32, reflecting weaker inbound demand and more cautious consumers. Service-sector firms highlighted slowing Chinese tourism and intensifying competition, while some retailers reported tax-free sales to Chinese visitors still well below year-ago levels.Looking ahead, manufacturers expect sentiment to moderate to +10 in May, while non-manufacturers see a further dip to +23. The forward guidance implies that February’s improvement may not yet signal a sustained acceleration.For policymakers, including Prime Minister Sanae Takaichi, the survey reinforces the challenge of balancing fiscal expansion ambitions with lingering domestic fragility and external risks. This article was written by Eamonn Sheridan at investinglive.com.

Goldman raises its AUD/USD path to 0.72–0.74 over 12 months, citing RBA hawkishness, relative policy divergence and valuation support, while flagging commodity and global risk risks.Summary:Goldman Sachs lifts AUD/USD forecasts to 0.72 (3m), 0.73 (6m), 0.74 (12m).Upgrade driven by a hawkish Reserve Bank of Australia and expectation of another May hike.AUD seen undervalued versus Goldman’s GSBEER fair-value model.Risks: deeper metals selloff, weak US data, global risk-off (AI/software unwind).Goldman Sachs has turned more constructive on the Australian dollar, raising its forecasts for AUD/USD and arguing that relative policy dynamics are shifting in the currency’s favour.The bank now sees AUD/USD at 0.72 in three months (vs. prior forecast of 0.68),0.73 in six months (vs. prior forecast of 0.69)and 0.74 in twelve months (vs. prior forecast of 0.70)a meaningful round of upgrades. Upgrade primarily on the stance of the Reserve Bank of Australia, which Goldman characterises as among the more hawkish developed-market central banks at present.For market participants, the key takeaway is the policy divergence theme. Goldman expects the RBA to deliver one additional rate hike in May, broadly consistent with market pricing of roughly 20bp of tightening by that meeting. The bank notes that policymakers place significant weight on quarterly underlying CPI measures — with the next release due the week before the May decision — making that inflation print a pivotal catalyst for AUD positioning.Notably, Goldman argues that the Australian dollar has held up impressively despite volatility in metals prices and terms-of-trade headwinds. On its GSBEER fair-value framework, AUD remains roughly 2 percentage points undervalued relative to recent fundamentals, suggesting room for catch-up appreciation if the policy signal remains firm.For traders and macro allocators, the implication is clear: as long as the RBA maintains a tightening bias and US data continue to soften at the margin, the balance of risks skews toward a firmer AUD/USD trajectory over the next quarter.Goldman does flag risks. A sharper downturn in metals prices would weigh on Australia’s external balance; materially weaker US consumer data could spark broader growth fears; and renewed equity volatility — particularly in US AI and software names — could pressure AUD against traditional safe havens such as the yen and Swiss franc. This article was written by Eamonn Sheridan at investinglive.com.

Goldman upgrades Japan to overweight and lifts its TOPIX target to 4,300, arguing political stability under Takaichi and structural governance reforms can drive further foreign inflows and valuation expansion.Summary:Goldman Sachs upgrades Japanese equities to overweight from neutral.12-month TOPIX target raised to 4,300 (from 3,900).Call anchored in stronger mandate for PM Sanae Takaichi and expected foreign inflows.Structural drivers: governance reform, buybacks, valuation expansion.Favoured themes: defence, critical resources, shipbuilding, power/energy, US re-industrialisation plays.Goldman Sachs has doubled down on its bullish Japan stance, upgrading the market to overweight and lifting its 12-month target for the TOPIX to 4,300 from 3,900. The shift reflects growing conviction that Japan’s post-election momentum can extend beyond a short-term political bounce and translate into sustained foreign capital inflows and broader valuation expansion.The upgrade follows a powerful rally in Japanese equities after Prime Minister Sanae Takaichi secured a decisive election victory, reinforcing expectations of fiscal expansion and policy continuity. Goldman argues that a clearer political mandate reduces uncertainty, strengthens reform momentum and supports renewed overseas investor engagement with Japan’s equity market.Importantly, the bank frames its bullishness as structural rather than tactical. Ongoing improvements in corporate governance, capital efficiency and shareholder returns remain central to the thesis. Japanese companies have continued to lift buybacks and focus on return on equity, helping narrow the long-standing valuation discount versus global peers. Goldman sees further scope for index-level multiple expansion if foreign participation deepens under a more stable policy backdrop.Sector positioning reflects both domestic and global policy currents. The firm highlights defence, critical resources, shipbuilding and power infrastructure as potential beneficiaries of strategic spending priorities. It also points to US re-industrialisation plays and semiconductor-linked names as earnings tailwinds, given Japan’s role in global supply chains.While Japanese equities have already delivered one of their strongest two-week relative outperformance bursts in years, Goldman contends the rally is not exhausted. The key debate now centres on sustainability: whether inflows, earnings resilience and reform momentum can offset crowding risk and any volatility stemming from yen moves or shifts in Bank of Japan expectations.For now, Goldman keeps Japan at the top of its global conviction list, signalling confidence that the combination of political stability and structural corporate change can continue to underpin gains into 2026. This article was written by Eamonn Sheridan at investinglive.com.

PPI Outputs:The PPI Outputs measure the average prices received by New Zealand producers for goods and services they produce and sell. This could be to other businesses (intermediate consumption) or to final consumers.cover various industries such as agriculture, manufacturing, construction, and services, among othersrising PPI Outputs index can indicate increasing inflationary pressure as producers are getting higher prices for their goods and services. However, they might not necessarily pass these increases on to consumersPPI Inputs:The PPI Inputs, on the other hand, measure the average prices paid by New Zealand producers for their inputs — the raw materials, services, and capital goods they use to produce their goods and services.These inputs can be sourced domestically or imported.When the PPI Inputs index is rising, it suggests that producers are facing higher costs, which might eventually lead to higher prices for consumers if the producers pass these costs on through higher output prices.The Reserve Bank of New Zealand (RBNZ) decision and press conference is the focus for the session here. This is the first Reserve Bank of New Zealand meeting since November last year. New Governor Dr. Anna Breman is moving to shorten this gap in future years. Three months is a long time between monetary policy meetings. RBNZ statement due 18 February at 2pm New Zealand time (0100 GMT / 2000 US Eastern time on Tuesday 17 February). Previews:RBNZ expected to hold rates as higher food price inflation adds limited pressureLikely RBNZ on hold decision February 18RBNZ to hold, signal rate hikes ahead, ING. Upside risks for NZ/US toward 0.62 by year-endRBNZ preview: risk of disappointment given the high expectationsAfter the Reserve Bank of New Zealand today attention will quickly switch to the minutes of the Federal Reserve's Federal Open Market Committee (FOMC) meeting, due at 1900 GMT / 1400 US Eastern time. This article was written by Eamonn Sheridan at investinglive.com.

Iran foreign minister: There have been good developments compared to last round of talksUS February NAHB housing market index 36 vs 38 expectedFebruary Empire Fed manufacturing survey +7.1 vs +6.98 expectedCanada January CPI +2.3% y/y vs +2.4% expectedFed's Goolsbee: Servies inflation is not tameFed's Barr: Prudent for Fed to take time before changing policy againMarkets:Gold down $113 to $4878US 10-year yields up 0.6 bps to 4.06%WTI crude up down 64-cents to $62.28S&P 500 up 0.1%NZD leads, GBP lagsThe volatility didn't disappear on Tuesday despite some of the net changes on the day being modest. There was a swing in risk sentiment and some big dollar bids into the London fix that totally unwound afterwards.In terms of news, there weren't any market movers aside from Iran's foreign minister who sounded upbeat on deal talks with the US today. That led to a quick $1 drop in oil and a $60 drop in gold. At one point gold totally bounced back but oil stayed lower on the day (though off the lows).The euro was sold into the fix in a slide down to 1.1800 but it held the big figure and steadily climbed to 1.1850 from there. Cable was beaten up by the central bank talk earlier and fell as low as 1.3495 before bouncing to 1.3563. Similarly, we saw 50 pip swings in the commodity currencies and yen. The kiwi was the top performer as we count down towards the RBNZ meeting and some in the market brace for an RBA-style surprise, or at least some hawkish rhetoric.In equity markets, Apple led a comeback from a 50 point drop in the S&P 500 early in the day. Airlines and banks also bounced in chopping trade that was in a narrower range than most of last week. After hours, Palo Alto Networks initially rallied on earnings but is now 7% lower. That's a repeat of the kind of price action we saw throughout the past three weeks. This article was written by Adam Button at investinglive.com.

The Reserve Bank of New Zealand decision and press conference is the focus for the session here.RBNZ statement due 18 February at 2pm New Zealand time (0100 GMT / 2000 US Eastern time on Tuesday 17 February). Previews:RBNZ expected to hold rates as higher food price inflation adds limited pressureLikely RBNZ on hold decision February 18RBNZ to hold, signal rate hikes ahead, ING. Upside risks for NZ/US toward 0.62 by year-endRBNZ preview: risk of disappointment given the high expectationsBefore the RBNZ statement we are getting some data from New Zealand, Q4 2025 New Zealand Q1 PPI inputs and outputs. What are these?The Producer Price Index (PPI) is a measure of the average prices that producers in a country receive for their outputs (PPI Outputs) and the average prices that producers pay for their inputs (PPI Inputs).PPI Outputs:The PPI Outputs measure the average prices received by New Zealand producers for goods and services they produce and sell. This could be to other businesses (intermediate consumption) or to final consumers.cover various industries such as agriculture, manufacturing, construction, and services, among othersrising PPI Outputs index can indicate increasing inflationary pressure as producers are getting higher prices for their goods and services. However, they might not necessarily pass these increases on to consumersPPI Inputs:The PPI Inputs, on the other hand, measure the average prices paid by New Zealand producers for their inputs — the raw materials, services, and capital goods they use to produce their goods and services.These inputs can be sourced domestically or imported.When the PPI Inputs index is rising, it suggests that producers are facing higher costs, which might eventually lead to higher prices for consumers if the producers pass these costs on through higher output prices.Japanese trade data will follow soon after. Exports are expected to show a very solid jump in January. From Australia the wages data is the ost interest. The RBA rasied rates at its first meeting of the year this month. Yesterday we had that meeting's minutes:RBA minutes show inflation risks ‘shifted materially’ behind February rate hikeOh, before I finish, China, Hong Kong and Singapore are all out on holiday today again today. The absence of these major trading hubs will substantially thin out interest and liquidity during the time zone here. This article was written by Eamonn Sheridan at investinglive.com.

A new CIBC equity research note caught my eye this week. It's about the waste industry -- not exactly the sexiest corner of the market -- but it lays out a framework that I think applies to a much broader set of companies. The core idea: AI can add 130 to 270 basis points of EBITDA margin over the next five years to companies that haul garbage. And if it can do that for waste, it can do it across a huge swath of old economy businesses.This connects directly to the HALO trade I've been writing about -- Heavy Assets, Low Obsolescence -- or RAMP - -Real Assets, Margin Potential -- But I want to sharpen it further. There is an opportunity in owning things AI can't replace but also benefit from AI optimization -- the fatter the cost structure, the more there is to optimize.The math that mattersHere's the thing about margins that the market is slow to appreciate: a 200 basis point improvement means completely different things depending on where you start.A SaaS company running 40% EBITDA margins that squeezes out another 200 bps? That's nice -- a 5% improvement to the bottom line. But a pipeline operator or waste hauler running 5% margins that picks up 200 bps? That's a 40% improvement in profitability. Same basis points, wildly different impact on earnings, cash flow and multiples.The CIBC frameworkWhat I like about the CIBC note is that it doesn't just wave its hands about "AI efficiency." It breaks down the specific cost lines and estimates how much each one contributes. Here's their framework applied to waste companies, but think of it as a template:Fuel and route optimization (12-45 bps): AI-assisted route planning, load consolidation, and driver coaching can cut fuel costs by 12-15% in the medium term. For waste companies, fuel runs 1-3% of revenue after surcharges. The savings are modest per line item but they're real and immediate. This applies to any fleet-heavy business.Labour and scheduling (42-60 bps): This is the big one. AI-driven routing and labour planning can reduce driver hours, overtime and idle time. CIBC conservatively estimates 5% savings on driver labour costs, which run 8.5-12% of revenue. They note that research from UPS and McKinsey suggests 10-20% is achievable longer term but discount that because warehouse automation gains don't fully translate to field operations. Fair enough -- but even the conservative estimate is meaningful.Predictive maintenance (20-50 bps): Instead of scheduled maintenance or waiting for something to break, AI monitors equipment and predicts failures before they happen. This alone can cut maintenance costs by 2.5-5%. Maintenance often costs 8-10% of revenue so it's meaningful.Customer service automation (14-17 bps): AI chatbots and voice bots can reduce call centre staffing by 20-25%. This is already happening everywhere. Small line item for waste (~0.7% of revenue) but essentially free margin.Back office / SG&A (9-55 bps): Billing, document processing, accounting workflows -- the boring stuff that employs a lot of people. CIBC suggests 1-5% savings in the medium term on SG&A that runs 9-11% of revenue. The range is wide because it depends on how aggressively companies deploy automation.Dynamic pricing (18-30 bps): AI can optimize pricing at the customer or route level using real-time data. For waste companies, the upside is modest because much of their revenue is locked into municipal contracts. But in more competitive industries like airlines, this could be significantly larger.Customer retention (15 bps): AI identifies customers at risk of churning and enables proactive outreach. Another small but additive line item.Add it all up: 130-272 bps of EBITDA margin expansion over five years. And CIBC explicitly says this isn't exhaustive -- landfill energy optimization and other opportunities aren't even included.Now apply this framework across the old economyThe waste industry is a great case study, but let me walk through where I think this framework hits hardest.Airlines (net margins: 2-5%)This is maybe the single best application. Airlines are massive, complex operations running on razor-thin margins where fuel (20-25% of costs) and labour (30-35% of costs) dominate the expense structure. The global airline industry generated about $1 trillion in revenue in 2025 on net margins of roughly 3%.The AI opportunity map:Fuel optimization through better route planning, altitude management, and weight distribution. Even 2% fuel savings on an airline spending $10 billion annually on jet fuel (that's how much DAL spent last year) is $200 million straight to the bottom line.Crew scheduling and labour optimization -- airlines employ tens of thousands of pilots, cabin crew, and ground staff with incredibly complex scheduling constraints. AI can optimize this better than any human plannerPredictive maintenance on engines and airframes, reducing AOG (aircraft on ground) events that cost $150,000+ per dayDynamic pricing -- airlines already do this but AI takes it to another level, pricing not just seats but ancillary revenue in real timeOperations management -- gate assignments, turnaround optimization, disruption recoveryI'd estimate 150-300 bps of margin opportunity here. On a $50 billion revenue airline, that's $750 million to $1.5 billion in additional EBITDA. Look at Delta, United, and AIG as potential beneficiaries.Railways (operating ratio: 60-65%)North American Class I railroads are already incredibly efficient operators -- they measure themselves by operating ratio (lower is better) and the industry has converged around 60-65%. But there's still runway on the railway.Union Pacific and Norfolk Southern just announced an $85 billion merger to create the first coast-to-coast railroad. The combined entity would have about $36 billion in revenue and $18 billion in EBITDA. They're targeting $2.75 billion in annual synergies, but AI-driven optimization on top of that could be substantial:Train scheduling and network optimization -- moving more freight with fewer trainsPredictive maintenance on track, rolling stock and signalsFuel efficiency through better speed management and consist optimizationYard operations -- automating classification and reducing dwell timesDemand forecasting to better allocate resourcesRailroads already invest heavily in technology but the AI layer could push operating ratios toward the mid-50s over time. Every 100 bps of OR improvement on $36 billion of revenue is $360 million. Look at Union Pacific, CSX, and Canadian National.Utilities (EBITDA margins: 30-40%, but net margins: 8-12%)Utilities are interesting because while EBITDA margins look healthy, the net margins are thin after you account for massive depreciation on their asset bases and interest on the debt that financed them. The opportunity:Grid optimization -- AI can predict demand patterns and manage distributed energy resources far better than traditional SCADA systemsOutage prediction and prevention -- reducing truck rolls and emergency repair costsVegetation management -- using satellite imagery and AI to prioritize tree trimming (this is actually a massive cost for utilities)Customer service automation -- utilities handle millions of customer interactions per yearEnergy trading and procurement -- better forecasting of generation needsCompanies like NextEra Energy, Duke Energy, and Southern Company are already investing here. A 100-200 bps improvement on net margins would be highly meaningful for stocks that are valued on dividend growth.Shipping and logistics (EBITDA margins: 5-15%)Container shipping, bulk carriers, and freight logistics companies are perfect candidates:Voyage optimization -- speed, route, and fuel managementPort and terminal operations -- container stacking, crane scheduling, yard managementFleet maintenance -- predictive models for engines and hullsDemand forecasting and capacity managementDocumentation and customs processing -- massive back-office cost that's ripe for automationLook at Maersk, Hapag-Lloyd, and XPO Logistics. These are companies moving physical stuff around the world with enormous operational complexity and relatively thin margins.Mining and commodity production (margins vary wildly with commodity prices)When copper is at $5/lb, everyone looks like a shrewd operator. When it's at $3, the margin pressure is brutal. AI can help smooth the cycle:Ore grade optimization -- AI can identify the highest-value extraction pathsEquipment maintenance -- mining trucks and processing equipment are enormously expensive to repairEnergy management -- mining is incredibly energy intensive. The business is essentially 'crushing rock'Safety improvements -- which directly reduces costs from incidents and downtimeProcessing optimization -- improving recovery rates even marginally is worth millionsCompanies like BHP, Rio Tinto, Freeport-McMoRan, and Barrick Gold all have massive operational surface area for AI to improve.Construction and building materials (EBITDA margins: 10-20%)Companies like Vulcan Materials, Martin Marietta, CRH, and Caterpillar operate in industries where logistics, equipment utilization, and project planning drive profitability:Equipment fleet optimization and predictive maintenanceProject planning and resource allocationSupply chain and logistics for moving heavy materialsSafety managementEstimating and bidding -- AI can dramatically improve the accuracy of project bids, which is where a lot of money is made or lostHere's another point CIBC makes that I think is underappreciated: AI adoption further widens the competitive moat for large operators.In waste, the big four (Waste Management, Republic Services, GFL Environmental, Waste Connections) can afford to invest in AI platforms that smaller operators can't. The same is true in every industry I've listed above. The largest airlines, railroads, miners and utilities will capture these efficiency gains first, and that will make it even harder for smaller competitors to compete.CIBC argues this will accelerate M&A activity as smaller operators sell rather than try to keep up. I think this is exactly right, and it applies far beyond waste. This is AI as a consolidation accelerant.The VC desert is the new moatOne more point worth repeating: venture capital has spent the last 15 years funding software and tech startups. There's no money and no expertise flowing into building new railroads, airlines, refineries, or waste companies. Nobody is starting a new Class I railroad. The barriers to entry in these industries were already enormous -- massive capital requirements, regulatory approvals, decades of relationship-building. AI doesn't lower those barriers; it raises them by giving incumbents another advantage.The bottom lineThe market is spending all its energy figuring out which software companies will be disrupted by AI. I think the bigger trade is in companies that won't be disrupted by AI but will be made dramatically-to-marginally more profitable by it. There is no need to wade into the software battleground, especially when it's so volatile.The CIBC waste framework gives us a roadmap: identify the cost lines, estimate the AI-driven savings, and add up the margin impact. When you do that exercise across airlines, railroads, utilities, shipping, mining and construction, you find 100-300 bps of potential margin improvement in businesses where that kind of uplift is transformational.These are HALO stocks. Heavy Assets, Low Obsolescence. Or if you prefer, RAMP stocks: Real Assets, Margin Potential. Or TANK stocks: Tangible Assets, Not Killable.Whatever you call them, I think this is the most underappreciated AI trade in the market right now. This article was written by Adam Button at investinglive.com.

The S&P 500 looked like it would continue its malaise this week but after a poor start, it's turned around nicely.The index is now at a session high, up 20 points, or 0.3% to 6858. That's 70 points above the session low from the mid-morning.Lately we've seen some late selloffs so I don't think this one is over yet but there have been some notable turnarounds. Leading the way is Apple, which is up 3.7%.This chart has been doing the rounds for a few days and highlights how Apple is sitting out the AI capex race. That's attractive to investors who think that Apple will ultimately benefit from AI as phones become more indispensable personal assistants. Apple isn't exactly cheap though at 30-31x forward earnings and the company hasn't had much in the way of growth. Revenues fell in 2023 before growing 2% in 2024 and 6.4% in 2025.Another winner today is the airline sector:AAL +4.0%UAL +4.3%DAL +2.9%LUV +7.2%There is a big rethink ongoing in the sector around the importance of loyalty, airline economics and secular tailwinds behind travel. Most of all, they're capitalizing on premium travel which is booming and now comprises more than half of United's revenue. I also think airlines could see some improvement on margins from AI around scheduling and maintenance without facing any risk of disruption. In short, AI is all upside for airlines with no risk of disruption. That's something the market is looking for right now.Thirdly, we're seeing some lift in banks with Citi up 2.8% after some heavy selling last week. I'm not sure if this is any more than a typical bounce but there were some major worries in almost everything last week and banks also stand to be an AI winner in almost any scenario short of mass unemployment and defaults. Finally, cruise ships are benefitting from some of the same dynamics as airlines but Norwegian (NCLH) is leading the entire S&P 500 with a 12% gain after Elliott took an activist stake.On the worrisome side, software is continuing to slide with Intuit down another 5% while some of the recently-bid consumer staples give some back.On the S&P 500 chart, the break below the recent lows early today was worrisome but so far that's been rejected. This article was written by Adam Button at investinglive.com.

The GBPUSD has now made two clear downside runs beginning from yesterday’s session high at 1.3661 — and that sequencing matters.The first leg lower took the pair from 1.3661 down to 1.3550 during the late Asian / early European session. That move had momentum behind it. Sellers were in control, pushing price through intraday support without much hesitation. When the bounce came, it was corrective — not impulsive. The recovery stalled precisely near 1.3606, which marked the 50% retracement of that initial drop. That was your first technical clue that sellers were defending levels.From there, the second leg unfolded.Price rotated back down from 1.3606 and extended to a new low at 1.3494. That break took the pair below the prior 1.3550 low and reinforced the idea that rallies were being sold. Two legs lower. Lower highs. Lower lows. That’s the anatomy of short-term control shifting to the downside.Since printing the 1.3494 low, we have seen a rebound. However, that rebound has only managed to push back toward 1.3550 — the prior low from the first leg down. That level now carries added technical weight:It represents former support turned potential resistance.It aligns with the 50% retracement of the move down from 1.3606 to 1.3494.It sits just above the 61.8% retracement of the broader 2026 trading range, which comes in near 1.3549.That clustering makes the 1.3549–1.3550 area a key short-term bias-defining zone.Stay below it, and the sellers maintain the edge. A failure here would keep the “lower highs” structure intact and open the door for another probe toward 1.3494 — and potentially an extension lower if momentum builds.On the flip side, if buyers can reclaim and hold above 1.3550, it would signal that the immediate downside pressure is easing. In that case, traders would start looking back toward 1.3606 — the prior corrective high — as the next upside hurdle. But until that happens, rallies are suspect.Right now, the market has defined its battlefield.Two legs down. A corrective bounce. A key retracement ceiling overhead.And here’s how I see it: As long as price stays below that 1.3550 area, the sellers deserve the benefit of the doubt. The market already showed you twice where supply stepped in. Until buyers prove otherwise, you trade what you see — not what you hope.Watch that level. Let the market tip its hand. This article was written by Greg Michalowski at investinglive.com.

The Scotiabank Global Equity Research team dropped a meaty note this morning breaking down six major gold bull cycles over the past 50 years, and the conclusion is pretty straightforward: this one isn't over.Gold is sitting around $5,025/oz right now, up 209% from the October 2022 low of $1,628. That's a heck of a move, and naturally the number one question is whether it's time to take profits. Scotia's answer? Not yet.The playbook keeps repeatingThe team — led by Tanya Jakusconek and Hugo Ste-Marie — mapped out every major gold cycle going back to 1970 and found a consistent pattern. Each one was triggered by some combination of an economic/financial shock, elevated geopolitical tension, and a sustained USD downtrend. And each one ended the same way: the economy healed, real rates moved higher, and the dollar caught a bid.Here's how the current cycle stacks up against history:1970-1974: +422% over 52 months (oil embargo, end of Bretton Woods, inflation shock)1976-1980: +721% over 40 months (Iran revolution, Volcker hadn't tightened yet)1985-1987: +76% over 33 months (Plaza Accord dollar devaluation, '87 crash)2001-2008: +292% over 83 months (dot-com bust, 9/11, housing bubble)2008-2011: +167% over 33 months (GFC aftermath, QE, European crisis)2022-present: +209% over 39 months (pandemic stimulus hangover, tariffs, geopolitical chaos)The average cycle ran 48 months with a 336% gain. At 39 months and 209%, the current cycle has room on both duration and magnitude if history is any guide.What's different this time (in a good way for bulls)Scotia highlights three structural differences that could extend this cycle beyond what we've seen before:1. Central banks are buying, not selling. Emerging market central banks have been aggressively adding gold to diversify away from the dollar. This is a secular shift, not a cyclical one. Gold is under 30% of foreign reserves globally — it was over 50% in the late 1970s.2. New demand channels. Gold ETFs like GLD were game-changers in the mid-2000s. Now we're seeing the tokenization of gold and stablecoin issuers like Tether entering the physical market in 2025, creating entirely new non-traditional buying pressure.3. Investors are still underweight. In the 2000s cycles, generalists moved to market weight in gold. Today, despite the TSX Gold Index sitting at ~15% of the TSX, institutional positioning remains below average. A separate survey from BofA recently showed clients allocating just 0.8% to gold. That's dry powder.What could go wrongScotia's regression model puts gold's "fair value" at roughly $3,400/oz. The current spot of ~$5,000/oz implies a risk premium of about $1,600/oz — far above the historical average of ~10% over fair value.Scotia lays out four risks to watch:Dollar reversal. Every gold cycle ended with a stronger dollar. If something triggers sustained USD strength, this is over.US midterm elections. A Democratic sweep in November 2026 could be read as a return to institutional normalcy, eroding the risk premium. They note the Kevin Warsh Fed Chair nomination had a similar effect — just signaling Fed independence was enough to knock gold's safe-haven bid.Supply shock. If central banks slow purchases, ETF holders liquidate, or producers start hedging again in size, that's a lot of supply hitting the market.Geopolitical détente. If tensions actually cool, that $1,600/oz risk premium starts shrinking in a hurry.Gold equities: the leverage playGold equities have historically moved 1-2 months ahead of bullion on the way up and offer average leverage of about 1.5x to the gold price. The current cycle is tracking that pattern, with TSX Gold index up 346% versus gold's 209%.Scotia's top picks: AEM, AGI, AU, B, DPM, EDV, KGC, NEM, OGC, PAAS.The bottom lineThe macro setup that's been driving gold higher — fiscal excess, geopolitical uncertainty, dollar weakness, negative real rates — isn't going away anytime soon. Scotia sticks with their overweight recommendation and says if you have no or low gold exposure, buy the dips. This article was written by Adam Button at investinglive.com.

Comments from Fed Governor Michael Barr in a speech:Prudent for Fed to take time, look at data, before changing policy again.Wants to see more evidence inflation ebbing to 2% target.Still sees ‘significant risk’ inflation will stay over 2%.Reasonable to think price pressures will further cool.Job market in balance but vulnerable to shocks.Recent data points to stabilizing job market.In long run AI should boost productivity and living standards.AI boom unlikely to lead to lower Fed interest rates.Should be prepared for AI to disrupt labor markets.Little evidence so far AI is driving up unemployment.Outlook suggests Fed will hold rates steady for some time.I'm more interested in the comments on AI than monetary policy as it's revealing about how the Fed is thinking about it. Most people see it as dovish but he's saying the opposite here as he argues it's unlikely to lower rates.AI may become an "invention in the method of invention" for R&D.Adoption of generative AI in the workplace has been as fast as the PC in the 1980s.Speed of AI adoption allows less time for workers and businesses to adapt.Early career workers in AI-exposed fields face higher employment risks.Higher productivity and capital demand from AI may push up the long-run neutral interest rate On the Dual Nature of the AI Transition"While AI’s long-run effects are likely to be profoundly positive for productivity and living standards, the speed of adoption may allow less time for the economy to adapt, deeply disrupting labor markets and harming some workers in the short term."On the Implications for Interest Rates"The AI boom is unlikely to be a reason for lowering policy rates; instead, the resulting surge in capital demand and productivity could put upward pressure on the long-run equilibrium interest rate." This article was written by Adam Button at investinglive.com.

The price of Bitcoin has been in a consolidation phase since rebounding from the February 6th low near $59,930. After the sharp decline from the January 28th high near $90,352, the market managed to recover approximately 38.2% of that prior drop — a key Fibonacci retracement level that often acts as resistance in corrective bounces. That retracement level comes in at $71,551, has proven to be formidable resistance target. Stay below keeps the sellers in firm control.Since the February 6th low, there have been six separate attempts to push above that retracement level, and each rally has stalled. There was one brief exception during Sunday’s trade on February 8th, when price extended to $72,174. However, that breakout attempt was quickly rejected, and the market failed to build momentum above the retracement ceiling. Subsequent rallies once again fell short. In essence, buyers had multiple opportunities to seize control — and they were unable to sustain a breakout. That failure keeps the broader corrective tone intact.From a technical standpoint, another important development is the behavior of the 100-hour and 200-hour moving averages (the blue and green lines). Both moving averages have flattened out. A flattening 100- and 200-hour moving average is a classic sign of a non-trending market — a market lacking directional conviction. Consolidations like this do not last forever. Non-trending markets eventually transition into trending markets, and when they do, the move can be decisive.Adding to that non-trending dynamic, the price action today saw the 100- and 200-hour moving averages converge with each other and with the price itself — what I often refer to as “Three’s a Crowd.” When price and key moving averages compress together, it reflects balance between buyers and sellers. That balance rarely persists for long. The market typically resolves such compression with a directional expansion — either sharply higher or sharply lower.For now, with price holding below both the 100- and 200-hour moving averages, the short-term bias tilts to the downside. While there has been some downside momentum, it has not yet accelerated aggressively. Still, sellers maintain the technical edge beneath those moving averages.If traders begin to anticipate a trend-like break lower, the first downside trigger would come on a move below today’s low at $66,557. A sustained break below last Thursday’s low at $65,156 would further strengthen the bearish case. Below that, attention would turn toward the cycle low near $59,930 reached earlier this month — and potentially even lower if downside momentum accelerates.On the other hand, consolidation does not eliminate the possibility of an upside breakout. If selling pressure fades, buyers would first need to reclaim the 100-hour moving average at $60,916 (as referenced in your framework). The would have traders looking toward the 38.2% retracement at $71,551 in the high that $72,174. Breaking above those levels would be a more meaningful bullish signal and could open the door toward the 50% retracement midpoint at $75,141.For now, however, the technical posture favors the sellers while price remains below the 100- and 200-hour moving averages. The compression between price and those key averages suggests the market is building energy. Traders should anticipate a move away from this tightening range soon — and when it comes, it is likely to be more directional /trend-like than what we have seen over the past several sessions. Be aware. Be prepared.-------------------------------------------------------------------------------------------Key Points38.2% retracement at $71,551 remains firm resistance. After rebounding from the February 6 low near $59,930, Bitcoin recovered 38.2% of the drop from the January 28 high at $90,352 — but that retracement has capped gains repeatedly. Staying below keeps sellers in control.Six failed breakout attempts. Since the February 6 low, price has tried six times to push above $71,551. One brief move to $72,174 on February 8 was quickly rejected. Buyers had opportunities — and failed to sustain momentum.100- and 200-hour MAs are flat → Non-trending market. The flattening of both moving averages signals a market lacking directional conviction. Consolidations like this typically transition into a stronger trend move.“Three’s a Crowd” compression. Price and the 100- and 200-hour MAs have converged. This balance between buyers and sellers rarely lasts. Compression often precedes expansion — either sharply higher or lower.Short-term bias favors the downside. With price below both moving averages, sellers maintain the technical edge.Bearish TriggersBreak below $66,557 (today’s low)Sustained move under $65,156 (last Thursday’s low)Opens path toward $59,930 cycle low — and potentially lowerBullish RequirementsReclaim the 100-hour MA at $60,916Break above $71,551 (38.2% retracement)Clear $72,174 highTargets the 50% retracement at $75,141Bottom LineThe market is coiling. Compression between price and the key moving averages suggests energy is building.Bias: Modestly bearish below the 100- and 200-hour MAs. But consolidation does not last forever.A trend-like move is likely coming. This article was written by Greg Michalowski at investinglive.com.

The USDJPY has spent the last four trading days rotating in a defined up-and-down range, reflecting a market that is consolidating rather than trending. The low for the move was established last Thursday, and since that time the pair has carved out a pattern of progressively higher lows. That subtle shift in structure suggests that buyers, while not yet dominant, are beginning to lean against the downside.In today’s trading, price briefly dipped below a rising trend line on the hourly chart — a level that had been guiding the short-term recovery. However, the break lacked follow-through. Sellers were unable to generate sustained momentum below the line, and the failure quickly attracted buyers back into the market. That failed breakdown became a short-term catalyst. Once price reclaimed the 100-hour moving average at 153.127, upside momentum accelerated.The pair is now pressing against the upper boundary of the four-day range at 153.734, a level that has repeatedly capped gains. Earlier today, price stalled against that ceiling. Notably, last Thursday saw two separate hourly highs rejected near that area, and Friday’s rally also topped out just beneath it at 153.66. The level is clearly defined and technically significant.A decisive break and sustained move above 153.734 would shift the short-term bias more firmly in favor of buyers. Such a move would open the door for a run toward the 38.2% retracement of the broader February trading range at 154.32. Beyond that, additional resistance comes in near the falling 200-hour moving average at 154.506, followed closely by the 100-day moving average at 154.628.The 100-day moving average carries particular weight. Last week, USDJPY fell below that level for the first time since January 30 — a meaningful technical development that shifted the broader tone more neutral to slightly bearish. It remains an important barometer for both institutional and shorter-term traders.In short, while the pair remains near its February lows in the bigger picture, buyers are attempting to build short-term momentum. A sustained break above 153.734 would confirm that effort and increase the probability of a broader corrective recovery. Until that happens, the market remains range-bound, but upside pressure is beginning to build.Summary / BiasShort-term bias: Modestly bullishRisk: A break back below the 100-hour moving average at 153.127 would tilt the bias back to neutral-to-bearish.Upside targets:154.32 (38.2% retracement of the February range)154.506 (200-hour moving average)154.628 (100-day moving average)A move above 153.734 strengthens the bullish case. A move back below 153.127 weakens it. This article was written by Greg Michalowski at investinglive.com.

Sentiment is one of the best market indicators out there. In fact, I'd argue that the only reason to be on the stock market internet is to get news and -- perhaps more importantly -- to gauge sentiment.I don't think I've ever felt it was so tough to figure out where sentiment really lies. Part of that is because the internet is now a bot-filled mess of AI slop and manipulative algos that reinforce your beliefs but I think the part of it is also that the effects of AI are so tough to pin down. People are simultaneously worried about disruption but optimistic that something economically good will come of this technology.In any case, the confusion doesn't appear to be limited to me as a couple of surveys out this week point to a vastly different view of where sentiment stands.Yesterday I highlighted a chart from Goldman Sachs and its broadest tracker of various sentiment measures. That's compiled into a single view and looks like this:If anything, that's bullish.Meanwhile, Bank of American is out today with its latest fund manger survey and here is its broadest measure of fund manager sentiment, based on cash levels, equity allocation, and global growth.It's downright scary:Some details: expectations highest since Jun 21 investors most overweight commodities since May 22most overweight stocks since Dec 24 most underweight bonds since Sep 22Now normally the battle between Goldman Sachs and Bank of America is an easy decision but the BofA Fund Manager survey is one of the gold standards in markets and has a long, predictive history. If you look at that chart, it's been a very useful gauge of sentiment.That it's so high despite the rough start to the year for tech tells me we could be in for a rough ride. This article was written by Adam Button at investinglive.com.