MPC Markets Morning Call

Geopolitics, wild policy swings, Tariffs, SaaS-pocolypse,Private credit… you would think there is enough to worry about, but investorsfound something new to worry about, inflation. Stocks Finished down 1%, butthat was a marked improvement from the open where they opened down 2.5% and Europeclosed down 4%

Global markets largely ignored escalating Middle East tensions and rising inflation signals, with US indices finishing flat while the ASX benefits from rotation into value, energy, critical minerals and defence amid ongoing geopolitical instability.

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US equities were broadly unchanged despite heightened geopolitical risk, with Nvidia bouncing and defence and oil names rallying in a counterintuitive move.

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Rising oil and commodity prices plus hotter manufacturing PMIs flag renewed inflation pressure that should in theory weigh on broader equities.

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Defence stocks held by MPC (e.g. RTX, BAE, Lockheed) are up around 4–5%, and the view is you cannot be long enough European defence while instability persists.

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Gold is up about 2% for the week and pullbacks in silver, copper and platinum are framed as potential opportunities given strong industrial demand and supply gaps.

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Rotation from growth into real assets and value continues, favouring the ASX 200 over growth‑heavy markets, while US banks warn of looming pain for equities.

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MPC prefers cash plus high‑conviction real assets and defence, avoiding fringe names, and highlights a 12‑month “software survivors” note as a way to ride out volatility.

Middle East escalation and emerging credit stress set up a rough start to the week, with AI leaders wobbling, stagflation signals building, and the ASX skewed towards defensives, hard commodities and energy as geopolitical risk and supply-chain security come back into focus.

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Key takeaways

US and Israeli strikes on Iran have ignited the conflict, pointing to a very weak risk tone for global equities into the new week.

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UK private credit stress at a mortgage lender, including alleged double-pledging fraud, has hit confidence in financials, with Barclays flagged as heavily exposed.

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The bigger systemic risk now is a potential credit freeze if spreads blow out, which would be a larger drag on the economy than the immediate geopolitical shock.

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AI bellwethers like Nvidia and Apple are under pressure as the AI trade loses momentum, even though Nvidia now trades on a forward PE around 14 that could present a buying opportunity.

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Near-term winners from the conflict are likely to be oil, energy, defence, aerospace, freight/insurance plays and traditional safe havens such as gold miners and gold-linked ETFs.

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Likely losers include airlines, cruiselines, tourism, shipping, UAE‑exposed assets and broader cyclicals as airspace closures, higher risk premia and weaker confidence bite.

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Precious metals had a strong week, with gold firm, silver rallying and platinum up sharply, and there is scope for critical minerals and copper to be better bid as markets rethink supply-chain security.

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US PPI surprised to the upside across headline and core, reinforcing stagflation concerns as growth softens and adding to the list of headwinds for equities.

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The team is staying risk‑off near term, pausing software strategy deployment for a few days as there is no obvious sector leadership to stabilise the tape

Nvidia’s stellar quarter, growing AI backlash, and a historic US military buildup around Iran anchor this MPC Morning Call, as Mark Gardner unpacks why markets are fading AI darlings, where capital is rotating on the heatmap, and how MPC is positioning via its new “software survivors” strategy in an increasingly volatile macro and tech landscape.

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Nvidia’s blockbuster result and upbeat guidance were sold into as markets look for excuses to de‑risk crowded AI winners despite strong fundamentals.

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Big AI-driven job cuts at Block and WiseTech highlight how productivity gains are arriving via layoffs, not just revenue growth, sharpening scrutiny on the real-world costs of AI.

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A surge in AI misuse stories — from alleged CBA mortgage fraud to rogue chatbots and major data theft — is flipping the narrative from AI euphoria to AI risk.

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Mark argues this shift will push investors back toward trusted, domain‑expert software and under‑owned tech names, which underpin MPC’s “software survivors” enhanced growth strategy.

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Elevated US–Iran tensions, the largest recent US troop build‑up, and Trump’s mixed messaging add another layer of macro risk to already jittery equity markets.

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Nvidia’s strong earnings have reignited the AI trade and helped drive fresh record highs on the ASX, while markets rotate back into tech, commodities and critical metals amid lingering geopolitical risk and evolving views on the AI threat to SaaS incumbents.

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Nvidia beat on all key metrics with upbeat guidance, supporting the AI narrative and seeing initial 4% aftermarket strength before consolidating and grinding higher.

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The “SaaSpocalypse” blanket selling is being challenged, with MPC’s updated AI threat-to-SaaS model flagging wide moats and defensible niches across ~45 US and ASX names.

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Salesforce earnings and guidance disappointed, with concerns that agentic AI will compress margins in its expensive seat-based model, driving a 6–7% aftermarket drop.

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The ASX hit a record high yesterday and is poised for another, as local tech rebounds, banks stay firm, and the market increasingly shrugs off negative news, including hotter-than-expected CPI.

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US indices (S&P, Nasdaq, Russell) rallied on the back of renewed tech strength, while the Nikkei’s bounce is being viewed cautiously given recent exchange closures distorting technicals.

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Trump’s latest State of the Union delivered more political theatre than policy, adding little to the macro outlook but keeping tariff and geopolitical rhetoric in focus.

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Commodities remain constructive: gold and silver are supported by geopolitical and economic risk, platinum looks attractive with strong upside, and copper stays positive.

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Lithium jumped ~4.5% on news Zimbabwe halted exports, likely underpinning a bid in Australian lithium names such as Liontown, PLS and MinRes, and supporting exposure via US-listed fringe metals ETFs.

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MPC Markets’ Morning Call for 25 February 2026 covers a much‑needed rebound in battered software and tech, growing scepticism around the “Anthropic kills SaaS” narrative, and why AI advances should still fuel data‑centre and chip demand, alongside strong Fortescue numbers, WiseTech’s AI‑driven restructuring, and upcoming MPC AI/structured strategy updates.

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Software and tech finally bounced, led by AMD, dragging the S&P and Nasdaq higher and offering some relief in the most beaten‑up parts of the market.

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The Anthropic “SaaSpocalypse” story is increasingly being challenged, with key “research” shown to be low‑quality and many agentic‑AI claims still unverified.

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MPC’s AI Threat Heat Map highlights likely software winners and practical “buy the dip without bag‑holding” tactics, and will be expanded as a live, updated tool.

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Advances in agentic AI are seen as increasing, not reducing, demand for compute, memory and chips, echoing history where tech demand was consistently underestimated.

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Commodities were mixed: gold, silver and crude eased, while copper, lithium and uranium continued to firm on improving stability and structural demand.

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Fortescue delivered record iron ore shipments and industry‑low costs, beating expectations despite lingering analyst pessimism and a lag versus BHP and Rio.

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WiseTech will cut 2,000 of 7,000 staff as it pivots harder into AI, against a backdrop of surging revenue but weaker headline profit, and MPC is preparing an updated AI Heat Map plus a capital‑protected, leveraged “software survivors” structured strategy and webinar.

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In this episode, Mark Gardner discusses heightened market uncertainty driven by tariff concerns, fears of AI disruption (particularly from Anthropic's agentic AI tools impacting software incumbents like Oracle, IBM, CrowdStrike, Apple, and potentially payment networks like Mastercard and Visa), and private credit jitters (including Blue Owl halting redemptions amid software sector exposure and liquidity worries). While acknowledging overreactions in some areas and strong defensive moats in regulated or high-stakes sectors, he advises caution, selective buying on dips via dollar-cost averaging or staged entries rather than broad ETFs, and a risk-off stance given upcoming events like Nvidia earnings, multiple Fed speakers, Trump's State of the Union, and various company reports.

Key Takeaways:

1. Software sector hammered overnight due to Anthropic's perceived threats in agentic AI, hitting names like Oracle, IBM (-13%), CrowdStrike, and Apple; claims of disruption seen as overstated for many with strong moats.

2. Private credit concerns rising from lender exposure to battered software; Blue Owl halting redemptions flagged as a major warning sign ("owl in the mineshaft"), with potential defaults feared up to 8% in worst-case scenarios.

3. AI disruption narrative spreading sector-by-sector via looped AI-generated research and social media; genuine moats (regulatory, secure data, medical, low-error tolerance) remain largely impenetrable.

4. Buying opportunity ahead for select software stocks with multiple defenses, but avoid catching falling knives—prefer staged entries (4-5 clips) waiting for stabilisation rather than broad ETFs.

5. Positive notes include Woodside's strong results (production/cost/FCF beats), gold/silver/copper resilience, and lithium/Bitcoin strength amid broader risk-off tone.

6. Upcoming catalysts to watch — Nvidia earnings, Fed speakers (Goolsbee, Bostic etc.), Trump's State of the Union, plus earnings from WiseTech, Fortescue, Woolworths, Salesforce; expect continued uncertainty and volatility.

The 23 February MPC Morning Call covers a resilient US equity session despite renewed Trump tariffs, slowing growth, sticky inflation and rising Iran-related geopolitical risk, alongside strength in precious metals, emerging private credit stress via Blue Owl, and an improving local earnings tone led by Ampol, ahead of a catalyst-heavy week for AI bellwethers, Fed speakers and key inflation prints.

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US equities closed about 0.8% higher, led by the MAG7, despite the Supreme Court ruling on Trump’s tariff powers and his announcement of new 15% tariffs.

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US data showed slower growth (GDP 1.4% vs 2.8% forecast) but hotter Core PCE (0.4% vs 0.3%), tilting towards a stagflationary backdrop.

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Military build-up around Iran helped lift precious metals, with gold up 1.2% and silver and platinum up around 5%, as China returns from its holiday shutdown.

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Blue Owl’s private credit issues, including frozen redemptions on a US$1.7bn retail fund and concerns over a US$4bn CoreWeave data centre deal, hit CoreWeave by about 12% and raised sector worries.

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Nvidia and Salesforce earnings this week are seen as key tests for AI leadership and monetisation, especially with ongoing pressure on SaaS and cyber from agentic AI fears.

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Ampol posted a solid result, with NPAT slightly ahead, a strong Lytton refinery, improving convenience retail (shop sales up 4.8%, tobacco 16% of sales) and lower leverage, supporting a recovery narrative.

This market update covers geopolitical tensions, market performance, earnings reports, and investment strategies, providing valuable insights for investors and traders.

market update, geopolitical tensions, earnings, investment strategies, market analysis, trading tips

key topics

• Geopolitical tensions and military buildup in the Persian Gulf

• Market performance and technical analysis of US and Australian indices

• Earnings season highlights and company reports

• Commodity price movements including gold, silver, and oil

• Investment strategies and risk management during geopolitical crises

takeaways

• Geopolitical tensions can significantly impact commodity prices and market sentiment.

• Earnings season provides crucial insights into company performance and market direction.

• Technical analysis indicates a potential shift to negative trends in major US indices.

• Investors should monitor geopolitical developments and commodity prices for risk management.

• Diversified investment strategies, including fixed coupons, can help mitigate market volatility.

In this morning's edition of the MPC Markets Morning Call, Mark Gardner discusses the current state of the stock market, the influence of the Federal Reserve, and the performance of various sectors, particularly technology and energy. He emphasizes the importance of discerning which software companies to invest in and provides insights into upcoming economic data that could impact market trends. The conversation also touches on specific company performances and investment strategies for navigating the current market environment.

Takeaways

• The Fed's actions have significantly influenced market dynamics.

• There is a mixed performance across different sectors in the market.

• Investors should focus on companies with a competitive advantage.

• Oil prices have shown signs of recovery amid geopolitical tensions.

• Upcoming economic data will be crucial for market direction.

• Gold and silver markets are experiencing recoveries.

• Bitcoin continues to face downward pressure.

• Hub 24 reported exceptional financial results.

• Overall market sentiment remains cautious but optimistic.

• Investors are encouraged to explore educational resources for better market understanding.