Insights
Market Review for October 2026
Brazilian election result allows the Amazon a reprieve
Meta runs afoul of election influencing laws (again)
Election campaigns were in full swing in US and NZ, with AI in the spotlight
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Against a backdrop of further unsettled market performance in October (thanks to a fierce debate about the profitability of AI technologies and more Gulf tensions driving up energy prices) we review some of the bigger happenings, starting with an environmentally-positive election outcome in Brazil.
Amazon rainforest breathes sigh of relief on Lula’s Brazil Presidential victory
The close fight in Brazil between the incumbent President Lula da Silva and a challenge from the son of Brazil’s former ex-military Conservative leader, Jair Bolsonaro resulted in a surprise win in the second round for Lula. While no angel himself, Lula was very clearly the Amazon’s candidate, because the Bolsonaro clan is closely aligned with some of the more unscrupulous business interests in Latin America and has facilitated the deforestation of the Amazon Basin, as well as reducing protections for indigenous groups who dwell there [2].
In contrast, although Lula carries reputational damage from implication in bribery cases a decade ago, he has been credited with strengthening Forest Code [3] legislation in Brazil. This may well have saved 20,000 square kilometres of rainforest (more than a billion trees) from clear-felling and logging, in the last four years. That compares with the pro-logger and pro-rancher policies of the Jair Bolsonaro period, which would likely have resumed had his son Flávio beaten Lula to the Presidency on 25th October. Biodiversity and Carbon dioxide capture suffer when illegal deforestation goes unchallenged by climate-change skeptical governments so we're generally happy with the outcome of this election [4].
The Brazilian electorate has shown it is possible to protect critical environmental assets – perhaps a new trend in voter red lines?
Meta runs afoul of election influencing laws (again)
In a related story Meta was in the news again amidst concerns it was involved in voter interference in Brazil. Lula claimed his team were unable to boost posts, and his supporters said their pro-Lula content was removed or restricted [5]. Meantime, Meta are aiming to tap the bond markets for another US$20 billion debt issue [6] which, on the back of billion-dollar settlements related to accusations of addictive products and harmful content, is seriously trying Meta's already shaky reputation.
The Pathfinder KiwiSaver Plan has never invested in Meta, on serious ethical concerns, as we discussed last month in this newsletter. In Brazil, several watchdogs and human rights groups said they found evidence of bias in Meta’s algorithm when applied to electoral advertising. Much worse, though, it’s the allegation that Meta posts encouraged employers to coerce their staff to vote in line with their bosses’ preferences. That claim is now under formal lawsuit from the Brazilian Labour Prosecutor’s Office [7].
Election timetable heated up in US and NZ
October and November are often months when elections are favoured, and this year, the other internationally consequential vote (Congressional Mid-Terms) took place on November 3rd. This was the first chance voters had to give a verdict on the Republican-controlled government which has been so controversial. From an ethical point of view, there is not enough space to comment on the many and varied infringements and environmental backslides that ensued. The return to virulence of serious infectious diseases like measles and bacterial whooping cough in the US after Health Service defunding is probably the most objective red flag that a political shift is needed. Costs of living have been rising sharply for Americans too, and pocket-book issues (issues that impact people's ability to pay for everyday goods) alongside an unpopular interventionist war in Iran likely influenced the tidal wave of Democratic preference. After leading by executive order, it remains to be seen how the midterms will influence the remaining years of Trump's term. But certainly, a clear signal has been sent by Americans regarding their tolerance (or lack of) for this administration [8].
In New Zealand pre-election policies were on display in October. For our investors, Solar Energy endorsements from most parities were very welcome, and a happy co-incidence was the successful initial public offering of Lodestone Energy on 22nd October, which attracted around 10,000 new shareholders [9]. Lodestone has been supported by Pathfinder funds through its early growth years, and we will remain a supportive shareholder, with around 1% of the company at our present allocation. We anticipate that the Lodestone investment will attract long-term capital from a range of “switched-on” shareholders who can experience an instance of capital and energy resilient climate benefits coming together, and as an added benefit, see it happening in New Zealand.
Finally, the build-up to the Swiss election also shows the global topicality of issues also being debated in New Zealand. Swiss voters, along with picking their Federal Council, will also get to vote in referenda on whether to increase old age pensions through the equivalent of a GST increase [10]. Most of our questions about Super in NZ remain unanswered: will the Super age be raised? Will it be universal or means-tested? What happens if you’re still working after 65? Will it be linked to consumer price index or wage growth? Leaving KiwiSaver investors less certain of how much that nest egg needs to be.
What this means for your money - solid Half-Year’s returns for Sustainable Funds
October often sees market swings, and sentiment certainly cooled this year, with a continued healthy re-assessment and re-evaluation of risks. The environmental impact of AI data centres has been on the radar, and in certain US Congressional districts, has even risen to be a political flashpoint. Half of Americans now oppose data centres being built within three miles of their home [11]. That attitude is contending against those politicians who point to jobs benefits, economic stimulus, and the potential for designing better, lower-impact data facilities.
All these debates are set against the less-certain tine in the US equity markets, particularly as relates to the Information Technology sector. On the brighter side, new US data from Morgan Stanley shows that Sustainable Funds there delivered a stronger first-half year set of returns than Traditional Funds, despite substantial recent political hostility from States and Federal authorities [12]. The investment bank also established by survey last month that most asset owners and managers view responsible use of AI as part of their sustainable investment strategy, rather than a separate topic. This is good news for us as ethical investors.
The news from Morgan Stanley won’t feature in many Republican TV advertisements, but it is definitely worth publicising. US oil prices surged another 15%, pressuring other industries, and in October, a soft performance from several key US players in the Information Technology sector pushed down their share prices. That being said, many had recently reached their all-time highs and were ripe for some profit-taking. Overall, world markets dipped by slightly less than 2% for the month. That means that while year-to-date returns remain above average from global equities, the best phase for this year’s returns may well have already passed, and the key issue before year-end will be whether the traditional post-election seasonal turnaround will take place, or allow for any “Santa Claus” rally. Because of the complex risk environment presently, there may be a lower probability of major market strength as 2026 draws to a close.
Remaining composed and relying on a careful portfolio selection and active choices can bring longer-term rewards, even when the immediate future remains unsettled.
Sources & further reading
Sources and references
[1] Morgan Stanley Institute for Sustainable Investing “Sustainable Reality” Report H1 2026
https://www.morganstanley.com/content/dam/msdotcom/en/assets/pdfs/SustainableReality1H26MorganStanley.pdf
[2] https://e360.yale.edu/digest/bolsonaro-tweets-amazon
[3] Source: https://www.carbonbrief.org/analysis-lula-presidency-saved-at-least-20000km2-of-brazilian-amazon-since-2022
[5] https://www.theguardian.com/world/2026/oct/21/battle-meta-alleged-bolsonaro-bias-intensifies-days-before-brazil-presidential-runoff
[8] https://www.nytimes.com/interactive/2026/11/03/us/elections/results-senate.html
[9] Source: https://www.nzx.com/announcements/482193
[10] https://www.admin.ch/en/upcoming-federal-popular-votes
[11] https://www.politico.com/news/2026/10/25/poll-data-centers-midterms-political-risk-01132260
Image source: INPE, PRODES, CarbonBrief. Refined using with Microsoft Copilot.
