The Monday Report – 01 June 2026

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This story features SUPERLOOP LIMITED, and other companies.
For more info SHARE ANALYSIS: SLC
The company is included in ASX200, ASX300 and ALL-ORDS

The S&P500 posted its ninth consecutive gain last week, up 1.43%,  the longest winning period since 2024 and only the fifth time since 1965.

The Nasdaq Composite rose 2.39%.

The ASX200 rose for a second straight week, up 0.86% despite consumer confidence weighed down by an RBA rate hiking cycle, the war in the Middle East, and the Budget.

Futures are pointing to a slight decline to start the month of June, the final four weeks of FY26.

Good Morning,

The ASX200 finished 74 points or 0.86% higher last week at 8731, locking in a second consecutive weekly and monthly advance.

At a sector level, Consumer Discretionary rose 4.38%, with Materials up 3.34%, Real Estate up 2.57%, and IT up 2.28% . While Energy fell -3.28%, Telcos slipped -2.48%, Utilities lost -1.56%, and Financials retreated by -1.18%. 

Superloop ((SLC)), Treasury Wines Estates ((TWE)) and The Lottery Corporation ((TLC)) are hosting investor presentations this week.

For more details see https://fnarena.com/index.php/financial-news/calendar/

To stay up to date on earnings season, check out the Corporate Results Monitor:

https://fnarena.com/index.php/reporting_season/

Today’s Big Picture, J.L.Bernstein

Dell’s Blowout Says AI Spending Is Real 

Dell had a monster quarter. It raised full-year revenue guidance to US$167 billion from US$140 billion, and US$60 billion of that is AI servers alone.

That tells you companies are actually spending big on AI gear right now, not just talking about it.

The report pulled the whole computer hardware group up with it and helped cap the Nasdaq’s best two-month stretch since 2009.

Oil Heads For Its Worst Month Since 2020

Oil dropped hard in May, its worst month since the pandemic hit in 2020.

The reason is simple. Traders think the US and Iran are about to reopen the Strait of Hormuz, the shipping lane where a fifth of the world’s oil used to pass.

Trump says he is making the final call today. Iran keeps sending mixed signals though, so this is not a done deal yet.

Warm Inflation Meets a New Fed Chair 

Inflation in April came in at its hottest since 2023, right as Kevin Warsh takes over the Fed.

Jamie Dimon called this market exuberant at a conference today, and he has seen this kind of run before.

Record highs and rising inflation are always an awkward mix for the fed.

Warsh’s first move on interest rates is the thing I am watching now.

ANZ Bank, Australian Morning Focus

Comments from Trump indicated a US-Iran deal may be imminent. Equity markets rose and bond yields and oil fell in anticipation.

The S&P500 was up 0.2%. In Europe, the EuroStoxx50 fell -0.1% and FTSE100 fell -0.2%. The yield on the US 10y Treasury note fell -0.8bp to 4.44%.

The active WTI oil future fell -0.7% to US$87.4/bbl. Gold rose 0.6% to US$4,540/oz.

Preliminary HICP inflation data for May across the big four European economies were mixed. In Germany, annual headline HICP inflation slowed from 2.9% to 2.7%, largely reflecting temporary fuel excise tax cuts.

In France, Italy and Spain, annual headline HICP inflation accelerated to 2.8%, 3.3% and 3.6%, respectively. Euro area HICP is due to be released early next week.

The consensus is for a modest acceleration from 3.0% y/y to 3.3% y/y, and for the core measure to lift from 2.2% y/y to 2.4%, reflecting the volatile package holiday and airfare components.

Overall, there remains no sign of the energy shock transmitting to inflation broadly. Nonetheless, guidance from ECB policymakers has all but cemented a hike at the meeting in June, which is near fully priced by the market.

Australian Q1 GDP this week.

March quarter GDP is the local data highlight this week. Ordinarily we’d be looking at upside risk to our GDP estimate off the back of the strong jump in equipment spending reported in last week’s Q1 capex data.

However, the nature of the investment (data centre related server racks and the like) means we expect a considerable offset in Q1 import volumes.

We’re currently forecasting a 0.5% q/q rise, but as always, we’ll wait for all the partials before finalising our GDP pick.

God Bless Ai! Ipek Ozkardeskaya, Swissquote 

Consumer confidence and economic sentiment metrics remained bleak in May, while inflation expectations eased from last month’s peak but remained notably high compared to pre-Iran war levels.

Across the Atlantic, the data didn’t look much better – although major indices traded higher on reports the US and Iran had extended a ceasefire and were close to reaching an agreement.

But the most interesting message of the week certainly came from oil prices.

Despite uncertainty and sticky points in the US-Iran peace negotiations –-the two main issues being Iran’s nuclear program and control of the Strait of Hormuz-– oil prices mostly fell this week.

The week started with a -7%-plus drop, and we are now more than -10% below last Friday’s close.

That’s an encouraging sign. It means that markets are starting to:

1.    Get used to the headline volatility and react less violently than in the initial days of the conflict.

2.    Digest the idea that the war could last a few more months.

3.    Price in the possibility that a ceasefire and temporarily restored traffic through the Strait of Hormuz could keep oil prices in a lower and narrower range.

Given the chaotic nature of the negotiations, any unexpected development could send oil prices above US$100 per barrel again. Black swans seem to be everywhere in the Strait of Hormuz…

But below the US$97-US$99 per barrel range –-which includes the major 38.2% Fibonacci retracement of the Iran-led spike and the 50-DMA-– US crude remains in a bearish consolidation zone. 

In the absence of fresh negative catalysts, we should see prices stabilise within the US$85-US$90 per barrel range. Calmer headlines could open the door to a further retreat toward US$80 per barrel.

Anyway, let’s leave the headlines aside, they simply don’t tell us anything worthwhile, and look at the data to understand the impact of this geopolitical mess.

The latest growth and inflation updates suggested US GDP grew more slowly than expected in Q1 at 1.6% versus the 2.0% expected by analysts. Price pressures came in slightly softer than expected.

But when I say softer than expected, price pressures remain notably higher than before the Iran war; they were simply a little better than forecast.

Personal spending increased modestly in April while personal income stagnated, meaning Americans continued spending despite stagnant income growth. Meanwhile, sellers of affordable products such as Dollar Tree are benefiting from squeezed purchasing power. Dollar Tree jumped nearly 18% on better-than-expected earnings, while Best Buy rallied more than 15%.

Overall, however, US corporate profits fell in Q1: down -0.4% versus expectations for a 5.7% increase.

That was the biggest surprise in yesterday’s data, if you ask me, as it appears disconnected from the incredible performance of the S&P500 last quarter and the 28%-plus earnings growth reported by the index in Q1.

It highlights once again the widening gap between the tech-heavy mega-caps benefiting from AI-driven optimism and massive liquidity inflows, and the rest of corporate America.

The non-tech pockets of the market, smaller companies and large parts of the broader corporate landscape are struggling with higher borrowing costs, slower demand, refinancing pressures, and geopolitical and trade uncertainty.

Meanwhile, tech-heavy indices and tech headlines continue to dominate the narrative –-the same narrative that pushed the S&P500 to a fresh record high.

Snowflake jumped 36%,  yes, 36%, after the software company’s results showed that AI had helped improve revenue rather than steal its business.

Dell jumped 39% in the after hours trading on strong and better than expected results.

God Bless AI!

Double-Leveraged Burger & Bubble Tea

Yet, the data served as a reminder that corporate earnings growth, much like the market rally itself,  is not broad-based.

But we already knew that. It is being driven by a handful of giant companies while much of the rest of corporate America lags behind.

And it’s not only about narrowing market breadth; it’s also about rising leverage.

1.    Big Tech leverage: Big Tech is investing enormous sums to build AI infrastructure, increasingly financed by debt.

2.    Investor leverage: US net margin debt exceeded 1.25% of US market capitalisation at the end of April, the highest level on record going back to 1997.

The last time US net margin debt was this high was just before the dot-com bubble burst.

So we keep returning to the same question: Is this a bubble?

As an economist, I will repeat that it isn’t a bubble until it bursts. But a few indicators are flashing red.

Market breadth is one of them. The equal-weighted versions of the major tech-heavy indices are lagging behind their cap-weighted counterparts, and they have good reasons to do so, including rising energy prices, higher inflation expectations, rising global yields and a deteriorating economic outlook.

The gap between the Kospi and its equal-weighted version is especially worth noting.

In the US, the Nasdaq’s PE ratio has climbed to historically uncomfortable levels. The CAPE ratio is approaching 40, the last time that happened was during the dot-com bubble.

And the Buffett Indicator which measures total stock market value as a share of GDP has surged above 230%, the highest level on record by a wide margin.

For perspective, it peaked around 130% during the dot-com bubble.

These metrics do not answer the question of whether this is a bubble, nor do they necessarily mean a crash is imminent. But they do suggest that investors are paying significantly more for each dollar of economic output than at any point in modern market history.

What to do?

Watching markets march higher without being involved is frustrating. Diversification and hedging against a potential pullback are necessary to avoid getting caught on the wrong side of a sudden reversal.

The big challenge at the moment is that traditional diversification is becoming less effective.

Rising global yields are putting pressure on bond prices, weakening the classic stock-bond hedge just as equity valuations are stretching to extremes.

Gold, another traditional safe haven, is testing its 200-day moving average to the downside as higher real yields reduce its appeal.

In this environment, focusing on quality companies with strong balance sheets and durable earnings, diversifying across regions and sectors, and selectively using defensive assets or options strategies may offer better protection.

The difficult part is that the market’s momentum remains powerful, but so does the gap between prices and fundamentals.

BoA’s Michael Hartnett’s Playbook for Life After the Bubble, Stephen Innes, SPI Asset Management

Baron Rothschild’s famous line, “Buy on the cannons, sell on the trumpets,” was the quote Michael Hartnett chose to lead his latest Flow Show, and it feels particularly relevant as investors continue marching deeper into what he now openly describes as the largest speculative bubble since the railroad boom of the 19th century.

Only a week ago, Hartnett finally acknowledged what many market veterans have been quietly discussing for months: this is a historic bubble. Yet even then, he argued that investors were not quite ready to head for the exits. His reasoning was straightforward.

Markets rarely abandon risk assets ahead of blockbuster IPO waves, and policymakers are unlikely to tighten financial conditions aggressively until inflation becomes a more obvious political problem.

In his framework, that likely means waiting until CPI pushes toward the 4% to 5% range, the zone that has historically forced policymakers to lean against speculative excess and often marked the beginning of more meaningful market corrections.

Fast forward to today and Hartnett’s attention has shifted from identifying the bubble to preparing for what comes after it.

His starting point is a familiar one. Ultimately, every major speculative cycle is brought to heel by the same forces: central banks and bond markets.

Rising yields increase the cost of capital, tighten financial conditions, and eventually force investors to reassess even the most compelling growth stories.

The problem for bears is that those forces are not yet fully engaged. Global central banks have delivered 31 rate cuts so far this year versus just 12 hikes, and liquidity conditions remain far more supportive than restrictive.

Add in an estimated US$3 trillion pipeline of potential IPO issuance still waiting in the wings, and the fuel feeding the current boom appears far from exhausted.

If the first stage of every bubble is driven by liquidity, the final stage is usually driven by conviction. That is where Hartnett believes markets find themselves today.

Real policy rates remain negative in parts of Asia, particularly in Japan and South Korea, helping to explain why the Nikkei and Kospi continue to climb even as the yen and won struggle under the weight of easy money.

As long as central banks remain reluctant to remove the punch bowl, traders have little incentive to step aside. The game becomes one of front-running the bubble rather than fighting it.

Hartnett argues many of the classic ingredients associated with late-stage bubbles are already in place. Price action has become increasingly exponential. Volatility remains remarkably subdued despite a growing list of macro risks.

Valuations continue to stretch further into the future, with the S&P 500 now trading near 29 times trailing earnings.

Meanwhile, market leadership has narrowed to a tiny group of stocks carrying an ever larger share of the index’s weight. None of these conditions guarantee an imminent reversal, but collectively they paint a picture of a market where expectations are becoming increasingly detached from reality.

This is why Hartnett continues returning to the same historical roadmap. When major bubbles finally begin to deflate, leadership often rotates toward the exact assets investors spent years ignoring.

Long duration government bonds tend to outperform as growth expectations cool and yields fall. Defensive sectors regain relevance. Value replaces momentum.

The trade becomes less about chasing what worked during the boom and more about identifying what was unfairly discarded while investors crowded into the market’s most celebrated winners.

Perhaps most intriguing is the possibility that the end of the Iran conflict could itself become fuel for the rally’s final phase. As geopolitical tensions ease, oil prices decline, and inflation concerns soften, giving investors another reason to embrace risk assets.

Lower energy prices support consumers, improve inflation expectations, and reinforce the belief that policymakers can remain accommodative. Yet that is often how great bubbles mature.

The final advance frequently arrives after the biggest risks appear to have disappeared and investors become convinced that the path ahead is clear.

The result is a market that increasingly resembles the late stages of previous speculative cycles. Liquidity remains abundant. Volatility remains subdued. Investors remain confident. New issuance continues to come to market. The crowd remains fully committed.

None of that means the top is imminent.

But as Hartnett’s roadmap suggests, the ingredients that have historically existed near the end of great market booms are becoming increasingly difficult to ignore.

The Bull/Bear Report by SimpleVisor, Lance Roberts

The S&P 500 closed Friday at 7,580.06, finishing up 1.43% on the week and posting its ninth consecutive weekly gain. 

That’s the longest weekly winning streak since 2024, and only the 5th time since 1965 that has occurred. 

While markets previously saw weakness following such streaks, the 24- and 52-week outcomes were primarily positive, except in 1989.

What investors should watch most is the Broadcom (AVGO) setup as mentioned above. The options markets are pricing an implied move of roughly 7% on the print, well above the historical average and the most asymmetric outcome would be a beat with cautious forward guidance.

AVGO is priced for management to extend its “US$100 billion in AI chip revenue by 2027” line of sight into a hard number, but anything short of that, combined with hyperscaler capex moderation in the commentary, would trigger the kind of broad semiconductor de-risking that the technicals already flag as overdue.

The macro releases matter. However, Broadcom Wednesday is the trade the entire tape is built around right now.

Westpac data reveals rapid uptake of AI subscriptions

New Westpac data has uncovered the acceleration in Australians adopting AI tools with approximately one million payments for AI subscriptions completed over the last year as the technology becomes part of everyday life.

In an analysis of Westpac card transactions, over 150,000 retail customers are paying for at least one AI subscription each month.

This has grown rapidly from 11,000 customers who were paying for AI services three years ago –- a 1284% increase.

By comparison, growth in the most popular online streaming service grew by 35% in the same period.

According to the data, customers are spending a total average of $5.6 million each month on AI tools across learning, productivity, creative services and personal digital assistants.

Carolyn McCann, Westpac Chief Executive of Consumer, says the growth reflects a step change in how Australians are choosing to work, learn and manage their lives.

“This is a rapid shift in behaviour as customers embrace AI to make daily tasks faster, easier and more personalised,” McCann said.

“It’s clear that AI has moved well beyond hype. It’s now becoming more embedded as a practical tool that Australians are increasingly relying on, whether for study, work or managing the household.”

According to the data, strong growth in AI adoption is occurring across all age groups however Millennials are leading the charge with the highest number of users. Gen X is showing the biggest growth up 1680%, followed by Millennials (1205%), Gen Z (1149%) and then Baby Boomers (786%).

“Gen X is leaning in strongly. They’re experimenting, adapting quickly and seeing immediate value,” McCann said.

This trend is also being reflected in workplaces, with Westpac employees now using Microsoft 365 Copilot each day. This follows a recent roll-out of Copilot to the bank’s global workforce, one of the most significant deployments of the tool undertaken by an Australian company.

“Helping teams work more efficiently and access information faster means our people can focus on important tasks like supporting our customers,” McCann added.

In an Australian banking first, Westpac customers are now able to view and cancel subscriptions directly through the Westpac app.

Developed in collaboration with Mastercard, the new feature gives customers a full picture view of all their subscriptions with the ability to view and cancel unused or unwanted services

Corporate news in Australia:

• BGH Capital has increased its bid for Tourism Holdings ((THL)) despite softer earnings and weaker travel demand, signalling confidence in the long term outlook for the tourism operator
• IFM Investors is preparing to challenge Atlas Arteria’s ((ALX)) valuation assumptions as part of the ongoing takeover process
• Morgan Stanley has launched a sale process for retirement living operator Reside Communities, reportedly attracting interest from several major sector participants
• Distressed and private equity investors are assessing Bapcor ((BAP)) amid takeover speculation
• Macquarie Group ((MQG)) is in talks to acquire a minority stake in Optus as Singtel explores bringing in a local strategic partner
• Judo Bank ((JDO)) completed a $750m SME loan securitisation transaction
• SpaceX has reportedly reduced its targeted IPO valuation to US$1.8tn ahead of its IPO
• OpenAI is holding discussions with major banks including Citigroup and JPMorgan about joining its IPO advisory syndicate alongside existing Wall Street advisers
• Barton Gold ((BGD)) is raising $25.5m through a discounted equity placement to fund project development and exploration activities
• Lendlease Group ((LLC)) has denied speculation it is considering an equity raising, while investor focus remains on debt reduction and balance sheet initiatives

On the calendar today:

-AU May ANZ Job Ads

-EZ April Unemployment

-US May ISM manufacturing

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.

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