26/10/2026
AVANTGARDE WEALTH
WEEKLY CIO BRIEF
26–30 October 2026
Investing with Clarity
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🇿🇦 SOUTH AFRICA
GDP REBASING, PRODUCER INFLATION AND STRUCTURAL REFORM
One of the most important domestic events this week will be Statistics South Africa’s release of its rebased and benchmarked GDP estimates on Thursday.
This exercise takes place approximately every five years and is intended to ensure that South Africa’s national accounts continue to reflect the changing structure of the economy. Rebasing changes the reference year used to calculate constant-price GDP, while benchmarking incorporates updated data, classifications and calculation methods.
The revised figures could change the estimated size and composition of the economy. They may also affect important ratios such as government debt and tax revenue relative to GDP, although they will not alter the underlying economic challenges facing the country.
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📊 INFLATION AND THE BUSINESS CYCLE
September producer inflation will also be released on Thursday. Factory-gate inflation slowed to 5% in August, from 5.7% in July, but economists expect it to rise again to approximately 5.3%.
The increase is expected to be driven mainly by petroleum and related products. Oil prices remain above $100 per barrel as the Middle East conflict continues to disrupt trade through the Strait of Hormuz while global energy inventories remain unusually low.
Higher producer prices can eventually feed through to consumer inflation as businesses attempt to recover rising transport, manufacturing and distribution costs.
The South African Reserve Bank will publish its August composite business-cycle indicators on Tuesday. The leading indicator declined for a second consecutive month in July, suggesting that the economy continues to face weak momentum and a challenging operating environment.
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🏗️ INVESTMENT, TOURISM AND ECONOMIC REFORM
RMB will release its Where to Invest in Africa 2026/27 report on Tuesday. The report assesses macroeconomic conditions, investment attractiveness and growth prospects across African economies.
On Wednesday, Stats SA will publish September international-tourism figures. Visitor numbers rose to just over one million between July and August and were approximately 7.4% higher than a year earlier. Visitors from Southern African Development Community countries continued to account for the largest share.
Business Leadership South Africa will also publish its quarterly Reform Tracker. The update will assess progress in governance, criminal justice and economic reform, as well as the measures still required to translate reform momentum into stronger and more sustainable economic growth.
On Friday, National Treasury will provide its second-quarter update on Operation Vulindlela. The joint initiative between the Presidency and Treasury is focused on structural reforms in areas including electricity, water, transport, digital communications and the visa system.
SARS will end the week by publishing preliminary September trade data. South Africa recorded a trade surplus of approximately R20.5 billion in August.
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🏛️ POLITICAL WEEK AHEAD
The final week before the 4 November local government elections will see political parties intensifying their campaigns and voter-mobilisation efforts.
Campaign activity will take place across several provinces, while Parliament continues scrutinising the Medium-Term Budget Policy Statement, government expenditure and service delivery.
Parliament’s finance and appropriations committees will receive briefings from the Parliamentary Budget Office and the Financial and Fiscal Commission on the MTBPS. Joint public hearings will also give stakeholders an opportunity to comment on the revised fiscal framework and revenue proposals.
The National Treasury will respond to submissions on proposed amendments strengthening South Africa’s anti-money-laundering and counter-terrorist-financing framework.
Other parliamentary matters include provincial interventions in struggling municipalities, land released for reform, the exploitation of mineral resources, succulent poaching and the registration and funding of spaza shops.
The Electoral Commission is completing the final operational preparations ahead of special voting on 2 and 3 November and election day on 4 November.
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📈 SOUTH AFRICAN MARKET SNAPSHOT
Friday’s close:
• JSE All Share Index: 108,020
Early Monday indicators:
• South African rand: R16.60/$
• Gold: $4,011/oz
• Brent crude oil: $114.31/barrel
Elevated oil prices remain a significant risk for South Africa because the country imports most of its crude oil. Sustained prices at these levels could increase fuel costs, place renewed pressure on inflation and limit the scope for interest-rate relief.
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🌍 GLOBAL MARKETS
AMERICA’S EARNINGS BOOM IS BECOMING INCREASINGLY CONCENTRATED
Wall Street’s confidence in the equity market continues to rest heavily on strong corporate earnings. However, much of the recent profit growth is being generated by a relatively small group of companies linked to artificial intelligence.
Analysts expect S&P 500 companies to report third-quarter earnings approximately 30% higher than a year ago. Nvidia and Micron alone are expected to account for roughly 34% of that growth, while only ten companies—including Broadcom and Meta Platforms—are responsible for about two-thirds of the total increase.
Energy companies have also contributed meaningfully to earnings growth after benefiting from the sharp increase in oil and gas prices caused by the conflict in the Middle East.
The concentration of earnings creates a vulnerability. The market has become increasingly dependent on continued demand for AI chips, memory, data centres and the infrastructure required to support them.
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🤖 AI PROFITS: STRONG, BUT CONCENTRATED
Demand for AI chips has given semiconductor suppliers considerable pricing power. Micron’s most recent quarterly profit was reportedly more than ten times higher than a year earlier, while analysts expect Nvidia’s earnings to increase by approximately 90%.
The broader market is still growing, however. Excluding the ten largest contributors, the remaining S&P 500 companies are expected to produce earnings growth of around 10%. This suggests that the market is not entirely dependent on AI, although the headline growth rate would be considerably lower without the leading technology companies.
Share prices have also risen more slowly than earnings forecasts, causing some forward valuation multiples to decline. This indicates that investors may already be anticipating that the current pace of profit growth cannot continue indefinitely.
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⚠️ THE RISK BEHIND THE AI INVESTMENT BOOM
The central question is whether AI will ultimately generate sufficient commercial returns to justify the enormous amounts being spent on chips, data centres and supporting infrastructure.
Investor concerns resurfaced after Meta outlined plans to raise additional capital, contributing to one of the Nasdaq’s more significant sell-offs of the year.
Market sentiment remains sensitive to concerns about access to funding, higher interest rates and whether all the planned data centres will ultimately be completed and used profitably.
Some investment managers are beginning to shift away from the semiconductor companies supplying the initial “picks and shovels” of the AI boom and towards electricity providers. The reasoning is that power demand could continue rising as data-centre construction progresses, even if chip shortages and exceptional semiconductor profit margins eventually ease.
The current cycle is frequently compared with the dot-com boom of the late 1990s. One important distinction is that today’s leading AI companies are already generating substantial profits. Nevertheless, history shows that even genuine technological breakthroughs can produce disappointing investment returns when expectations and capital spending become excessive.
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📊 GLOBAL MARKET SNAPSHOT
Friday’s close:
• Dow Jones: 52,215
• S&P 500: 7,624
• Nasdaq Composite: 25,955
• US 10-year Treasury yield: 4.971%
• US 30-year Treasury yield: 5.300%
• Bitcoin: $79,800
• Ethereum: $2,313
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🔎 OUR VIEW
This week, investors will continue balancing strong corporate earnings against several significant risks: concentrated US profit growth, elevated interest rates, higher oil prices and continuing geopolitical uncertainty.
The AI theme remains an important long-term investment opportunity, but the market’s dependence on a small number of companies increases the potential for volatility. Strong current earnings do not remove the need to assess valuations, balance-sheet strength and the sustainability of future cash flows.
In South Africa, the rebased GDP figures could improve the appearance of certain fiscal ratios, but they will not change the need for stronger economic growth, disciplined public finances and faster implementation of structural reforms.
We continue to favour diversified portfolios, high-quality businesses, sustainable earnings and a disciplined approach to valuation. Diversification remains particularly important when market returns and profit growth are concentrated in a narrow group of shares.
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Avantgarde Wealth (Pty) Ltd
🌐 https://www.agwealth.co.za
Investing with Clarity
FSP 53978
Independently owned private wealth advice across public and private markets in South Africa and globally.
