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G'day! What a week it's been. Nvidia absolutely smashed earnings — $114 billion in revenue, guidance ahead of consensus — and yet the market reaction was oddly muted. That tells you something important: the AI narrative is priced in, and we're now in the phase where execution has to keep stunning us just to hold the line. Worth thinking about as you digest your portfolio over the weekend.

On the homefront, things are looking a bit shakier. Australia's unemployment jumped to 4.5%, and the latest flash PMI hints at contraction brewing. The RBA is expected to pause rate hikes, and economists are quietly whispering about downturn risk. This is the late-cycle playbook playing out: inflation still elevated enough to keep rates higher for longer, but labour market cracks are showing. The AUD holding steady at 0.712 suggests the market hasn't fully priced in the growth headwinds yet.

Offshore, Kevin Warsh is now Fed chair, and the minutes suggest rate hikes are back on the table — a stark contrast to where markets were a few months ago. Meanwhile, geopolitical tensions (Iran, oil stocks depleting with travel season ramping) are adding another layer of uncertainty to energy prices. That's stagflation risk in a nutshell: growth slowing, inflation sticky, and surprises lurking in commodities.

Here's what to sit with over the weekend: we're in a regime where the easy wins from AI are done, labour markets are rolling over, and central banks are juggling inflation and growth with less room for error. For Australian investors, that means quality over momentum and geographic diversification matter more than ever. Watch earnings season closely — consensus is still high, and disappointment could be painful. The next few weeks will tell us a lot about whether this is a soft landing or something messier. Stay sharp.