Today’s News

The Big Picture

• Government floats budget trial balloons. Over the weekend, the government floated a number of ideas they’re considering for next week’s federal budget. This included scrapping negative gearing for existing properties, removing the capital gains discount in favour of inflation-based deductions and a minimum 30% tax on Trust distributions. These revenue raising ideas come as Treasury warned of $60 billion in new spending pressures and Australian government debt set to cross $1 trillion next financial year. (AFR)
  
  

• House prices fall in Sydney and Melbourne. The national average home price grew 0.3% in April, the slowest rate since January 2025. A key reason was price falls in Australia’s two largest cities which saw falls of 0.5% in Sydney and 0.3% in Melbourne. The RBA meets this week, and with trimmed-mean inflation at 3.3%, another rate rise could be coming. (ABC)
  
  

• Trump declares Iran war “over”. The US President made the declaration in a letter to Congress, largely to avoid a deadline that would require Congress to approve the war. The President then rejected Iran’s latest peace proposal and warned shipping companies of sanctions if they paid tolls to Iran for safe passage as the US continues its blockade of the Strait of Hormuz. (WSJ)
  
  

• US earnings season pushes market to all-time highs. Despite war, inflation and political uncertainty the US stock market just had its sixth consecutive positive week as it reached new all-time highs. April was the best month for US stocks since April 2020 (the COVID rebound). Driving stocks higher are strong company earnings, with LSEG reporting aggregate profit growth for the S&P 500 is at 27.8% year-on-year. (Finimize)
  
  

• Trade tensions rise between US and Europe. President Trump accused Europe of “not complying” with a trade deal struck last year, and announced he would increase tariffs on European cars from 15% to 25%. Separately, the US warned European allies to expect long delays for weapons shipments as it prioritises replenishing its own stockpiles depleted by the Iran war. (FT)
  
  

• Anthropic left out by Department of Defence. The Pentagon reached deals to use the AI models of Amazon, Microsoft and Reflection AI in their classified networks, similar to deals previously struck with Google, OpenAI and SpaceX (Grok). The only major AI company not to make a deal with the Pentagon is Anthropic, which was labelled a ‘supply-chain risk’ in March after refusing to make a deal. (NY Times)

Companies in the news

• Berkshire Hathaway’s half-trillion dollar cash pile. In their first annual general meeting without Warren Buffett, the team at Berkshire Hathaway didn’t have too many surprises for investors. New CEO Greg Abel announced cash-on-hand reached US$397 billion, roughly $551 billion AUD. (CNN)
  
  

• Apple closes Big Tech’s massive week. Big Tech got a lot bigger last week. Apple reported first-quarter revenue of $111 billion, up 17% year-on-year. This followed strong reports from Alphabet (revenue up 22%), Microsoft (revenue up 18%), Meta (revenue up 33%) and Amazon (revenue up 17%). At those growth rates, these companies are doubling revenue every 3-4 years. (BBC)
  
  

• Australia’s supermarkets keep growing. Woolworths reported sales grew 4.5% to $18.1 billion for the quarter. Coles reported revenue up 3.1% to $10.7 billion for the quarter. Coles result came despite a 3.9% fall in alcohol sales. Both supermarkets saw huge jumps in eCommerce sales, up 20.2% and 24.8% respectively. (West Australian)
  
  

• ANZ’s double-digit jump in profit. The Australian bank reported underlying cash profit grew 14% to $3.3 billion for the half-year. Despite the strong result, the bank increased provisions for bad loans as it warned of the risk that the war in Iran causes further inflation and higher interest rates here in Australia. (AFR)
  
  

• Reddit shares up 13% as ad revenue grows. Social media platform Reddit reported 69% revenue growth. Profit also jumped to $204 million from $26 million a year ago. This continues a trend for digital advertising businesses with Meta and Alphabet also reporting their fastest ad growth in years. (CNBC)
  
  

• Resmed keeps sliding despite growing sales. The Australian sleep apnea device maker grew revenue 11% and profit 9% for the first 3 months of 2026. That wasn’t enough for investors with shares dropping 4%, taking it down 16% so far in 2026. (Capital Brief)
  
  

• Spirit Airlines prepares to shut down. The American low-cost airline filed for its second bankruptcy last year and started negotiations with the Trump Administration for a $500 million bailout. Recent higher fuel prices has been the final blow and with no bailout forthcoming, Spirit announced it would stop flying over the weekend. (NY Times)

What the…?

Australians are embracing US-style utes. Data from the Australasian New Car Assessment Program (ANCAP) has found a 270% increase in Australian sales of large, imported, US-style pick-up trucks since 2019.

Separately, data out of the US found that vehicles with bonnet heights above 1 metre (like these pick-up trucks) are 45% more likely to cause pedestrian deaths. (ABC)

A message from Viola Private Wealth

Wealth isn't one-size-fits-all. Your investment strategy needs to work for your life and not just the markets.

Viola Private Wealth manages over $2.5 billion for Australians with significant wealth, crafting tailored portfolios across public and private markets. With deep expertise and a client-first approach, Viola helps you focus on what matters: growing and protecting your capital with clarity and confidence.

Today’s Insight

An expert’s introduction to private credit

On Friday’s episode of Equity Mates Investing, we sat down with Henry Holm from Balmain for an introduction to private credit in Australia. (Spotify | Apple | YouTube)

Why does private credit exist?

Henry: It exists for two reasons in my mind. One is that borrowers need flexible capital. They need capital that can be deployed nimbly, be deployed in ways that's designed to meet their specific strategic business needs. And then it exists because investors are willing to fund that and borrowers are willing to pay a premium for that flexibility. Investors can benefit from that. The role of managers like Balmain is structuring those specific loan structures to meet those needs while protecting investors' capital and making sure it comes back.

Can you give us a bit of an overview of where the big growth areas have been?

Henry: Now we see private credit really specialising in construction finance. And it's a really big part of the market for private credit and what private credit will invest in here in Australia.

Today in Equity Mates