Rudi's View | 6:12 PM
Post midterms surprise, we look forward to corporate Australia's mini-results season in November.
In today's update:
- A Momentous Momentum Shift
- November Results (Previews)
By Rudi Filapek-Vandyck, Editor
A Momentous Momentum Shift
Never, ever underestimate the potential for an unexpected surprise.
That financial markets truism has once again been vindicated by this week's midterm elections in the US.
In hindsight, what was all the worry about?
Indeed, Harry Hindsight is a very wise man for whom conclusions after events are always logical, simple, straightforward and easy to explain.
The political landscape in the US underwent a seismic shift on Tuesday, and I don't think there's any hyperbole in that statement.
FNArena's Overnight Report from earlier this morning already lined up multiple assessments from the likes of T. Rowe Price, MFS, Oxford Economics and RBC Capital, so I won't go through those general assessments again.
Here's a direct link to that story: https://fnarena.com/2026/11/05/the-overnight-report-post-election-rally/
Two things are still worth highlighting. While the political balance has shifted significantly in favour of the Democrats, the opposition won't have the two-thirds majority required in each chamber of Congress to override the President's veto.
As anyone can see from their portfolio on Thursday (I hope), that is being interpreted as a positive by investors across the world.
The second conclusion is that the rollout of the infrastructure needed to accommodate demand for computing power and data centres will probably proceed more slowly as rules and community requirements tighten.
Ironically, this might be a positive for everything else.
This is, to all intents and purposes, not the end of the trend, as also demonstrated by Goodman Group ((GMG)) securing a sizeable equity stake in NextDC ((NXT)) in cooperation with US partner Digital Realty.
Within this context, the power shift in Texas might well become the most significant change from the latest midterms, as a major portion of the country's planned data centre capacity is located in that state.
Long story short: existing infrastructure should increasingly attract a premium. Remember: the world remains short of compute and storage capacity.
The likes of Infratil ((IFT)), DigiCo Infrastructure REIT ((DGT)) and Macquarie Technology Group ((MAQ)) --all of which sold off as the world turned against the sector and NextDC shares were punished for a profit warning-- are, on this reasoning, significantly undervalued.
See also Stock Analysis on the website for more details.
The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE
If you already had your free trial, why not join as a paying subscriber? CLICK HERE