Money and Investing’s Economic Debrief CY26 – What every Oz investor needs to know

This week on Money & Investing, Mitch Olarenshaw and I break down the Economic Debrief 2026, covering everything from RBA rate hikes and Australia’s controversial federal budget to why smart investors are shifting their focus to the U.S. market.

1. The Australian Market Is Underperforming

The ASX has returned just five and a half percent over the past twelve months. With three consecutive RBA rate hikes and inflation still biting, that return is barely keeping pace. The average Australian household is now paying around $414 more per month than at the start of the year, and consumer confidence continues to fall.

2. Australia’s Budget Is Rattling Investors

Changes to negative gearing and capital gains tax are creating real uncertainty. The negative gearing shake-up is likely to push rents higher and reduce rental supply, a pattern already seen in New Zealand when the same policy was trialled and later reversed.

3. The US Market Is Where the Action Is

The NASDAQ is up around forty percent over the same period the ASX has managed five. S&P 500 earnings growth sits at twenty-eight percent year on year. Three sectors stand out for investors: technology and semiconductors, data centres, and utilities powering the AI build-out.

4. ASX Opportunities Still Exist if You Are Selective

Resources, rare earths, and defence technology stocks are outperforming the broader index. Broad index exposure alone is not enough in this environment. Stock selection matters more than ever.

5. Tax Strategy Has Never Been More Important

Following the budget changes, shifting asset growth into the income column rather than relying on capital gains is a strategy worth exploring with a qualified adviser. Staying in US dollars rather than converting back to Australian dollars is also worth considering given the current economic gap between the two countries.

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