The Monday Report – 04 May 2026

Array
(
    [0] => Array
        (
            [0] => ((WOW))
            [1] => ((ORG))
            [2] => ((COH))
            [3] => ((CWY))
            [4] => ((QAN))
            [5] => ((BOQ))
            [6] => ((A2M))
            [7] => ((WBC))
            [8] => ((EBO))
            [9] => ((ANZ))
            [10] => ((NAB))
            [11] => ((NAB))
            [12] => ((WBC))
            [13] => ((MQG))
            [14] => ((MQG))
            [15] => ((QAN))
            [16] => ((COL))
            [17] => ((SXL))
            [18] => ((ANZ))
            [19] => ((BOQ))
            [20] => ((NAB))
            [21] => ((VNT))
        )

    [1] => Array
        (
            [0] => WOW
            [1] => ORG
            [2] => COH
            [3] => CWY
            [4] => QAN
            [5] => BOQ
            [6] => A2M
            [7] => WBC
            [8] => EBO
            [9] => ANZ
            [10] => NAB
            [11] => NAB
            [12] => WBC
            [13] => MQG
            [14] => MQG
            [15] => QAN
            [16] => COL
            [17] => SXL
            [18] => ANZ
            [19] => BOQ
            [20] => NAB
            [21] => VNT
        )

)

This story features WOOLWORTHS GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: WOW
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

The S&P500 and Nasdaq ended higher on Friday as technology stocks continued to outperform.

After a positive day on Friday to start May, ASX200 futures are pointing to a softer start ahead of bank earnings and Tuesday's RBA rate decision.

Good Morning,

The ASX200 finished -56 points or -0.65% lower last week at 8729. The declines were driven by another round of earnings downgrades, ongoing fuel security concerns tied to the Middle East, and mounting caution ahead of this week’s RBA board meeting. 

Last week’s disappointments included Woolworths Group ((WOW)), which flagged margin pressure and trimmed its full-year Australian food earnings (EBIT) growth guidance, and Origin Energy ((ORG)), which downgraded its expected contribution from Octopus Energy. 

These followed a string of earlier warnings in April, including major downgrades from Cochlear ((COH)), Cleanaway Waste Management ((CWY)), Qantas Airways ((QAN)), NAB’s impairment charge shock, Bank of Queensland ((BOQ)), a2 Milk ((A2M)), Westpac ((WBC)), and Ebos Group ((EBO)).

ANZ Bank ((ANZ)) also received a frosty reception after releasing its half-year results on Friday, setting the stage for National Australia Bank’s ((NAB)) half-year results on Monday and Westpac’s on Tuesday. 

On a sector basis, the biggest losers were Consumer Staples, down -5.45%, Healthcare off -2.91%, Utilities down -1.49%, and Materials down -1.25%. The best performers were Energy up 1.96%, Industrials up 1.51%, and Real Estate up 1.22%. Financials were broadly flat.

This week, the key event on the domestic calendar is Tuesday’s RBA board meeting. While we can’t completely rule out a surprise hold, the balance of probabilities still tilts toward a 25bp hike to 4.35% on a 5-4 vote. That would mark the RBA’s third hike this year and fully unwind last year’s -75 basis points of cuts. 

The Australian interest rate market starts the week pricing in 19 basis points of tightening for next Tuesday’s RBA Board meeting. Looking further out, there is now a cumulative 63 basis points of hikes priced into the curve for 2026.

Tony Sycamore, IG extract

It is a big week for earnings with 1H26 earnings for National Australia Bank ((NAB)) today, Westpac ((WBC)) tomorrow and FY26 earnings for Macquarie Group ((MQG)) on Friday.

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Sell in May? Perhaps, but Not Today, Chris Weston extract

We turn the page on what was an incredibly lively month of April for traders and investors, and we refocus on the risks and trading environment that will be presented to participants through May.

Proceedings start on a constructive note, with headlines emerging early as interbank FX markets ramp up, with modest USD selling the initial bias.

AUDUSD is notably pushing north of 0.7200, all suggestive of a small pop higher in S&P500 and NAS100 futures, which undoes much of the buying fatigue seen in Friday’s price action.

Headlines of “very positive” discussions with Iran have hit the wires, headlines we have become quite accustomed to hearing, but they come with signs of progress.

Reports suggest President Trump will allow select vessels to pass through the Straits of Hormuz today if they have held a neutral bias on the conflict, aiming to frame this as an easing of logistical constraints for vessels that have been stuck in or around the Straits for some time.

Trump will no doubt look for a PR angle as well and suggest a humanitarian perspective, but the market will take kindly to such progression.

We should see crude futures opening around -2% lower, an outcome which would flow through into risk markets, with inflation expectations likely pulling back modestly and some rate cut expectations re-built in US interest rate markets. Asian equities should also benefit and take some tailwinds from this.

A Stock Picker’s Market – The sellers on Friday started to gain more sway, and with the market discounting so much going right, and equity markets already rallying on earnings euphoria, dispersions in performance have become increasingly evident.

The environment is far more attuned to a stock picker’s market. We see that with S&P500 one-month realised correlation falling to 6%, one of the lowest levels of the year, and one-month implied correlation falling back to 11%.

With 63% of S&P500 companies having reported quarterly earnings, the scorecard shows that 81% have beaten expectations on earnings per share by an average of 20%. 72% have beaten on the revenue line, with an average beat of 2.1%.

The average stock has moved plus/minus 4.6% on earnings day, highlighting the sizeable moves seen on the day of reporting as the market digests earnings and operating conditions, but also within sectors, with large dispersions in trends and performance. A rising tide is not lifting all ships in this environment.

Earnings Flow and Technical Levels – In the coming week, we have a more modest 11% of S&P500 market cap due to report earnings. The generals within the S&P500 have largely reported, with Nvidia still to come on 20 May.

This week includes trade favourites such as Palantir, AMD, ARM, Snap, Coinbase, and neoscalers such as CoreWeave.

For those set long in risk positions, S&P500 futures ideally need to build and push through 7,250 to make a move towards recent highs of 7,300. Risk bulls would also like to see the USD index break convincingly through 98, and Brent crude head towards US$100.

US Data and Fed Expectations – On the data side in the US, we get the JOLTS report, ISM services, and the key event on Friday with the non-farm payrolls report. The market is looking for moderation in hiring, following the prior strong 178,000 jobs print in March.

The median estimate from economists is for 62,000 jobs in April, with private sector payrolls at 75k, and the unemployment rate expected to remain at 4.3%.

Forward interest rate swaps pricing shows traders assume the Fed is fully on hold over the next 12 months, but a moderation in crude pricing could bring back a skew in expectations for rate cuts.

By the end of the week, that view on Fed policy and positioning will be shaped not just by crude pricing and inflation markets, but also by labour market data and rhetoric from the many Fed speakers scheduled this week.

Holger Zschaepitz Tweet from X

Morgan Stanley has again raised its capex forecasts for the five hyperscalers Amazon, Alphabet, Meta, Microsoft, and Oracle. It now expects them to spend about US$805bn this year, up from a previous estimate of US$765bn.

For next year, the forecast has been lifted from US$951bn to US$1.1TRILLION.

To put that into perspective, their 2026 spending alone would be roughly equal to what all non-tech companies in the S&P500 spent combined in 2025.

The expected circa US$800bn for 2026 is nearly double 2025 levels and about three times what was spent in 2024.

The Warning From S&P Earnings Blowout, Lance Roberts, The Bull Bear report extract

The numbers look fantastic. With more than 60% of the S&P500 through Q1 results, blended S&P earnings growth is running at 15.1% year-over-year, on pace for the sixth straight quarter of double-digit gains.

Net profit margins just hit 13.4%, the highest reading since FactSet started tracking the metric in 2009. Eighty-four percent of reporting companies have beaten EPS estimates, well above the five-year average of 78%. By the time the season closes, growth could push higher still. 

Apple’s Thursday print captured the dynamic perfectly: 17% revenue growth, record 49.3% gross margins, and June-quarter guidance of 14–17% against Street expectations near 9.5%. The largest stock in the index just handed analysts every reason to ratchet 2026 numbers higher, which is precisely the pattern of extrapolation this piece is about.

The problem I have is that this is exactly the kind of headline that makes me cautious. Strong S&P earnings, in isolation, are not a buy signal. They’re a description of what has already occurred, and markets discount what’s coming next. History has a clear lesson about what tends to follow blowout earnings late in an economic cycle.

Going back to the 1920s, the periods of the fastest year-over-year earnings growth that preceded big stock gains were almost always recoveries from sharp recessions, when profits collapsed and then snapped back from a low base. Outside those specific setups, an inverse relationship emerges between trailing earnings growth and the next 12 months of equity returns.

The most rapid earnings growth outside recoveries clustered around July 1929. December 1973. March 2000. Late 2007. Every one of those moments felt like confirmation that the boom was real. Each one was followed by a meaningful drawdown.

Now, this is not a forecast, but it is a pattern. With margins at 15-year highs and the index trading at a forward P/E above 21x, against a 10-year average of 19x, history may be starting to rhyme.

Estimates Have Run Too Hot, Too Fast

Here’s where the rearview mirror becomes a forward problem. Analysts haven’t just left their forecasts alone after a strong start. They’ve ratcheted them higher.

Bottom-up consensus now calls for 2026 S&P Earnings growth of roughly 17%, with 2027 pinned in the mid-teens. For Q4 2026 specifically, the consensus is calling for 19.3% growth.

History says those forecasts almost never survive contact with reality. Going into 2000, the consensus forecast 15% S&P earnings growth, but the actual results came in below 4%.

Going into 2008, the consensus was 16%. Earnings ultimately collapsed by more than -75% during the financial crisis. The crystal ball gets foggiest right when the consensus is most certain

The bigger context becomes clear when you compare the current consensus path to the long-run norm. S&P 500 earnings have grown roughly 6.5% a year since 1950, almost exactly in line with nominal GDP, which is the only growth anchor that holds up in the long run.

The 10-year trailing average sits around 8.4%. Today’s 18.6% estimate for 2026 is more than double that long-run norm, and consensus expects the 2027 number to stay near 16%. 

Corporate news in Australia

-Firmus delays IPO until September

-NY hedge fund Bleeker Street Research questions Sharon AI’s viability ahead of its ASX listing

-Macquarie Capital ((MQG)) is seeking a JV partner for Qld’s $4bn Bungaban wind farm

-Catch Group founders plan to revive Click Frenzy sales event

-Qantas Airways ((QAN)) extends schedule changes due to high fuel costs and alongside  Jetstar have cut capacity due to high fuel costs

-Tesla earns more from batteries than EV sales in Australia

-Coles Group ((COL)) sees rising supplier price increase requests

-Southern Cross Media ((SXL)) faces pressure from activist investors

-Sephora losses deepen despite higher sales

-ANZ bank ((ANZ)) reports strong profit but warns of oil-related risks

-Gina Rinehart rejects royalty restructuring demands

-Craig Laundy plans to expand a new radio network using major brands

On the calendar today:

-AU April ANZ Job Ads

-AU March Building Approvals

-US March Durable Goods

-US March factory orders

-XX Japan, China, UK Public Hol

-XX Japan, China, UK Public Holiday

-BANK OF QUEENSLAND LIMITED ((BOQ)) ex-div 20.00c (100%)

-NATIONAL AUSTRALIA BANK LIMITED ((NAB)) 1H26 earnings report

-VENTIA SERVICES GROUP LIMITED ((VNT)) investor briefing

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms