NEWS + VIEWS – 14/08/2026
MARKETS
Global share markets were mixed over the past week, with investors focused heavily on inflation and the outlook for interest rates. In the US, softer-than-expected July inflation data and a flat PPI reading reduced concerns about another Federal Reserve rate hike, pushing bond yields lower and supporting technology and growth stocks; the S&P 500 and Nasdaq both reached record highs. At the same time, geopolitical tensions and uncertainty around energy supply remained a source of volatility.
Australian equities were more subdued, with the ASX 200 coming under pressure towards the end of the week despite the Reserve Bank leaving interest rates unchanged. Australian banks were in focus following Westpac and ANZ's 3Q updates, particularly commentary around weaker mortgage demand. Resource stocks faced pressure as commodity prices softened, while the stronger Australian dollar and concerns around domestic housing activity also weighed on sentiment.
REPORTING SEASON
The domestic reporting season is now underway with analysts expecting Australia’s largest 200 companies to have grown their earnings by around 12% last financial year. However, when profits from the mining and financial sectors are excluded, that earnings growth rate falls to a meagre 2.5%. In addition to focussing on past profit figures, investors pay close attention to companies’ forward guidance or commentary on how businesses are likely to fare in the next six to 12 months.
UBS equity strategist Richard Schellbach says that earnings momentum in Australia has turned decisively negative. Profit forecasts are now being revised lower across all 11 major ASX sectors, including resources, which had previously provided much of the market’s positive revision support. This broadening downgrade cycle raises the hurdle for companies to outperform during August. Results will need not only to meet expectations, but also to provide sufficient guidance confidence to arrest further reductions to forward estimates.
Higher interest rates, higher oil prices, tax changes and souring sentiment around the housing cycle have changed the landscape. Schellbach expects the trading updates of the companies that are exposed to the housing cycle will mean that they have seen activity levels soften materially. Given property is the biggest asset for most people, falling house prices have a major effect on consumer sentiment, which leads to cutting back on spending and a flow-on impact across many sectors of the ASX.
Last week, ResMed (RMD) delivered a strong full year 2026 result, with revenue rising around 10% to US$5.65 billion, supported by continued demand for its sleep and breathing devices, while profitability and margins remained robust. However, the outlook was more cautious with FY2027 revenue guidance of US$5.75-5.85 billion, which was below market expectations, reflecting the suspension of Astral ventilator sales, higher component and freight costs, and emerging competition from GLP-1 treatments. RMD’s share price fell -8.3% on the day of the announcement.
CAR Group (CAR) this week reported a strong FY2026 result, with revenue rising 6% to $1.25 billion and Net Profit After Tax (NPAT) jumping 14% to $314 million, reflecting solid performance across Australia, North America, Latin America and Asia. The company also increased its full year dividend by 8% to $0.86 per share. CAR provided a positive FY2027 outlook, targeting 11-14% revenue growth and 9-12% adjusted NPAT growth, supported by continued product innovation, AI investment and growth across its global marketplaces. CAR’s share price rose 9.9% following the result.
SGH delivered a mixed full year result, with revenue broadly stable at around $10.6 billion, while underlying NPAT was around $920 million, broadly flat year on year. Boral was a standout, with earnings growth of about 14%, helping offset softer conditions across several other divisions. The company continued to generate strong cash flow, supporting a $500 million share buyback and a modest increase in the dividend. However, the outlook was cautious, with management highlighting macroeconomic pressures and a stronger Australian dollar, which weighed on investor sentiment and saw the shares fall by more than -10%.
Commonwealth Bank (CBA) reported a strong FY2026 result, with cash profit rising 7% to $10.98 billion, ahead of market expectations. The bank’s net interest margin (NIM) eased slightly to 2.05%, while loan impairment expenses increased 9% to $788 million, reflecting a more uncertain economic environment. CBA declared a final dividend of $2.70 per share, taking the full year dividend to $5.05, up from $4.85. The key concern was a -15% decline in home loan applications following recent property tax changes, although management said applications had begun to stabilise and expects mortgage balances to grow around 4-5% in FY2027.
Telstra (TLS) delivered a solid full year result, with underlying NPAT rising 4.9% to $2.5 billion and underlying cash earnings continuing to grow, supported by strong performance in mobile, where revenue increased 3.2% to $11.37 billion on higher customer numbers and average revenue per user. TLS increased its final dividend by 10.5% to $0.105 per share and announced a further $1 billion share buyback, reflecting confidence in its cash generation and balance sheet.
Transurban (TCL) announced a strong FY2026 result, with proportional toll revenue rising 6.7% to $3.98 billion, free cash flow growing 5.1% to $2.11 billion and NPAT up 143% to $432 million, supported by higher traffic, toll increases and disciplined cost control. TCL increased its FY2026 distribution by 6.2% to $0.69 per share and guided to $0.72 for FY2027, indicating continued confidence in cash generation. The key concern is that FY2027 is expected to be a transitional year, with higher financing costs and the slower-than-expected ramp-up of Melbourne’s West Gate Tunnel likely to weigh on free cash coverage.
Also this week, Westpac (WBC) and ANZ both delivered 3Q26 updates. WBC reported quarterly cash earnings of around $1.8 billion, broadly stable year on year, with loans and deposits each growing about 2% and margins holding relatively steady. However, mortgage applications fell -20% since the government scrapped tax concessions to property investors, prompting the bank to forecast a sharp slowdown in housing credit growth. WBC’s share price fell -5.9% following the update. ANZ was stronger, posting a $1.90 billion cash profit, with a slight improvement in NIM to 1.54%, costs down -3% and a lower-than-expected $102 million bad debt charge. However, home loan application values fell -12% since the Federal Budget. ANZ’s share price rose 4.5% on the day of the update.
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