It was a “risk-off” week for global markets, with most indices slipping as investors became more nervous about extended valuations across parts of the US market. The local NZX 50 bucked the global trend with a small rise, while the NZ dollar continued to drift lower. It fell to US$0.56 against the greenback, the lowest since just after Liberation Day in April. The currency is also the weakest since 2015 against the British pound, the lowest since 2013 against the Australian dollar and at levels we haven’t seen since 2009 against the euro!

Labour's targeted capital gains tax (CGT) announcement last week was interesting. We're yet to see the detail, but has it got some merit? Taxes, property and politics are three topics that lead to robust debate amongst many New Zealanders, so let's roll those into one and talk about this latest proposal!

A busy week looms in New Zealand, with the highlight set to be the September quarter labour force report, due Wednesday. Unemployment is expected to rise to 5.3%, the highest since 2016. The latest Financial Stability Report from the RBNZ will be of interest too. Last but not least, it’s another big week of earnings releases with more than 130 S&P 500 companies scheduled to report results.

Lower interest rates have been a cause for celebration for many people in recent months. However, conservative savers with money on term deposit won’t be quite so enthusiastic. They were sitting pretty 18 months ago, with the six-month term deposit rate offering a yield of six per cent, the highest since 2008. Since then, rates have slumped more than 40 per cent to under 3.5 per cent. That’s a hefty pay cut, if your term deposit nest egg is a key source of income.

US credit markets have delivered strong returns this year. Companies have been issuing record amounts of debt, borrowing costs have remained manageable and bond investors have pocketed solid gains. However, in recent weeks cracks have appeared beneath the surface, and the pace at which the problems have emerged is worth paying attention to.

Investors will be watching US economic releases ahead of next week’s Federal Reserve meeting, with the September consumer price index (CPI) report a likely highlight. Inflation will be front and centre here in New Zealand too. The latest CPI report is due on Monday, with the headline measure likely to hit 3.0% (the highest in more than 12 months).

In recent weeks and months, the NZ dollar has weakened against most trading partners. It's down six per cent against the US dollar since the beginning of July, while it’s at a three year low against the Australian dollar. We’re under 0.50 against the euro, something we haven’t seen since late 2009, more than 15 years ago. It’s doing exactly what you’d expect it to against a challenging economic backdrop, and whether this is good or bad depends on your perspective.

The government shutdown is now into its 12th day and there aren't any signs of a compromise yet. At least we can count on the private sector to remain open, and a slew of corporate earnings releases to fill the gap this week. More than 30 S&P 500 companies are set to announce results, including some of the US banking heavyweights. Here in New Zealand, we should get a fresh housing market report from the Real Estate Institute, while RBNZ Chief Economist Paul Conway is giving a speech on Wednesday in Sydney.

It’s been a fantastic run for the US sharemarket. The S&P 500 index is up 18 per cent in the past 12 months, and 83 per cent over three years. Even Federal Reserve Chair Jerome Powell has commented on this, noting that “equity prices are fairly highly valued” during a recent speech. Are US stocks in a bubble, and how worried should investors be about where valuations have got to?

A big week looms here in New Zealand, with the latest Official Cash Rate decision from the Reserve Bank of New Zealand (RBNZ) the clear highlight on Wednesday. Another cut is assured, but will it be another 0.25% or will the RBNZ opt for a larger 0.50% move?