Weekly market wrap up

Global shipping's search for cleaner fuels took an interesting turn this week, with seven Japanese companies announcing plans to develop four ammonia-powered car carriers by 2030. The vessels will transport vehicles for manufacturers including Toyota, potentially reducing reliance on conventional marine fuels. The appeal of ammonia is straightforward - it produces no carbon dioxide when burned. Unfortunately, the practicalities are less straightforward, with production emissions, fuel costs, and safety requirements creating substantial challenges. The development highlights a broader shift across the shipping industry, where reducing emissions requires more than simply building cleaner vessels. Ports, fuel production facilities and distribution networks will also need substantial investment to support the transition.

Artificial intelligence took another step towards Wall Street this week, with Anthropic, the company behind Claude, publicly filing for an initial public offering (IPO). The filing offered investors a rare glimpse into the economics of the AI boom, revealing US$16.3 billion in revenue during the first half of 2026, compared with just US$1.2 billion a year earlier. However, the numbers also highlighted the enormous costs involved, with the company reporting a US$80.7 billion net loss, largely reflecting non-cash accounting adjustments. Its underlying operating loss was considerably smaller at US$693 million. The listing represents an important test of investor appetite for AI companies, particularly as questions grow over whether extraordinary investment in computing infrastructure can deliver sustainable profits. For markets, the IPO highlights the increasingly delicate balance between technological enthusiasm and financial reality. 

The Reserve Bank of New Zealand surprised markets this week by holding the OCR at 2.75%, rather than delivering the widely expected 25 basis point increase. It was hardly a unanimous decision, with the Monetary Policy Committee voting 4-3 to leave rates unchanged. While annual inflation eased to 3.7% in September from 4.1% in June, it remains above the Bank's 1-3% target band, with underlying price pressures becoming more widespread. Rising fuel costs and a weaker New Zealand dollar are adding to the challenge, while the domestic recovery remains uneven, with exporters faring considerably better than households and businesses reliant on local spending. Following two consecutive rate increases, the small majority of policymakers opted to give the economy more time to absorb tighter monetary conditions. However, the narrow vote highlights that concerns around persistent inflation remain firmly on the table. 

Across the Pacific, the US Federal Reserve also left interest rates unchanged this week, holding its target range at 3.75%-4.00%. Unlike the RBNZ's surprise decision, the Fed's announcement was widely expected, although the 10-2 vote revealed some disagreement among policymakers. The economic backdrop also tells a different story. While New Zealand's recovery remains uneven, the US economy continues to show resilience, supported by consumer spending, business investment and a relatively stable labour market. That strength has helped sustain economic activity, but with inflation still above the Fed's 2% target, policymakers have little reason to rush their next move. Two central banks, two different economic stories, and the same decision to wait.