Fin-X Weekly 4th May 2026

Stock markets remained resilient despite higher oil prices, higher bond yields and renewed inflation concerns linked to the Middle East energy shock.

US earnings were strong, but investor focus shifted to the scale and likely returns of AI-related capital expenditure across major technology companies.

Central banks leaned more hawkish as energy prices complicated the inflation outlook. Australia’s inflation data kept pressure on the RBA, with markets expecting a return to the post-pandemic cash rate peak tomorrow.

This week brings more quarterly earnings reports, the RBA meeting and Australian household spending data, US services and labour indicators, and Chinese PMIs and trade figures.

Global markets began to price a “high nominal growth, higher‑for‑longer rates” outlook last week. Global equities hovered near record highs, oil briefly printed new 2026 peaks, and sovereign yields rose again as central banks focused squarely on inflation risks from the Middle East energy shock rather than growth disappointments.

It was the biggest week of the Q1 earnings season with 178 S&P 500 members reporting. Earnings are up +28% yoy, but growth is expected to slow over the coming quarters. Analysts weighed strong earnings growth against enormous AI-related capital expenditures and questions about future payback.

Meta posted turnover of US$56.3 billion, up +33% yoy, with revenue and earnings both ahead of consensus estimates. However, the market's main focus was a raised full-year capex guide to US$125–145 billion (from US$115–135 billion), reflecting higher AI component and memory costs, which saw the share price post a -9.8% weekly decline in US dollar terms.

Alphabet was the standout of the week, with its share price surging by +12.0%. Revenue beat estimates driven by a +63% surge in Google Cloud revenue, which crossed US$20 billion for the first time. EPS was nearly double the market estimate while management raised its full-year capex guidance to US$180–190 billion, up from US$175–185 billion.

Apple (+3.4%) reported its "best March quarter ever" with revenue up +17% yoy and ahead of consensus. The company also announced a US$100 billion share buyback.

Other Mag 7 names that reported and beat estimates included Microsoft (-2.4%) and Amazon (+1.6%), although the market reaction was more restrained.

After Friday’s close, Greg Abel's debut as Berkshire Hathaway CEO saw operating earnings up +18% yoy, just short of consensus, as net income including investment gains, more than doubled. But the headline story was the all-time record cash pile, reflecting continued difficulty finding large-scale investments at Berkshire's standards. Berkshire resumed share buybacks for the first time since May 2024, repurchasing US$234 million, though there were no buybacks in the first two weeks of April.

In the energy sector, BP reported an underlying replacement cost profit of US$3.2 billion — more than double the US$1.38 billion in Q1 2025 and well above the US$2.63 billion consensus — driven by what management called "exceptional" oil trading and improved midstream operations as Iran-war pricing lifted realisations. In contrast, ExxonMobil (+2.6%) reported the lowest profit in five years owing to US$706 million in losses on financial hedges disrupted by the Iran war, plus US$3.9 billion in adverse derivative timing effects. Nevertheless, the share price has risen +27.0% so far in 2026.

Higher oil prices represented the dominant macro theme. Brent futures traded in a wide range and briefly spiked above US$126 dollars per barrel on fears of a prolonged closure of the Strait of Hormuz, before settling back closer to the mid‑110s as illiquid conditions encouraged profit‑taking. The price action reinforced the key question for the coming weeks: whether central banks treat the oil shock as a transient relative‑price event or as a catalyst for a second inflation wave that requires keeping policy restrictive for longer.

Central banks leaned hawkish at the margin. The Federal Reserve left policy rates unchanged but emphasised that inflation is now “elevated” and that the war in the Middle East, via energy prices, is the main upside risk. The Fed meeting was likely Jerome Powell’s final one as chair, as Kevin Warsh’s nomination is all but guaranteed after he passed the Senate Banking Committee. But the FOMC meeting saw four dissents, including Stephen Miran. The 2025 White House appointment preferred a quarter-point cut, but he will likely step down to make room for the new Chair, as Jerome Powell said that he intends to stay on as a governor until all criminal investigations into the Fed are dropped. Mr Warsh may have his work cut out to trim rates quickly, as the three other dissenters all wanted the Fed to drop its easing bias in the communications, preferring an emphasis on the two-way risks to rates. The futures curve also moved to price out any rate movements before at least July 2027.

The Bank of Japan held its policy rate at 0.75% in a rare 6–3 split vote, while sharply lifting its inflation forecast and cutting growth projections. The ECB also held policy rates stable, but both central banks are now expected to raise rates at the next meetings.

The Bank of England held interest rates, but, like the Norges Bank this week, the market is divided on whether a rate rise will come at the next meeting or later. Sweden’s Riksbank is expected to wait until June or August before raising rates.

In Australia, the March CPI release came in at +4.6% yoy, up from +3.7% yoy in February but below consensus estimates. Q1 core CPI inflation of +3.5% yoy remained above the RBA’s target band. The Monetary Policy Board is widely expected to raise the cash rate tomorrow back to the post-pandemic peak of 4.35%, from 4.10%. The Reserve Bank will also update its quarterly forecasts.

Overseas macro data was otherwise mixed. The US advance estimate showed Q1 real GDP growth re-accelerating to a +2.0% annualised pace, roughly in line with but slightly below consensus forecasts of +2.3%, with momentum from investment and exports, while consumption slowed.

The ISM Manufacturing survey held at 52.7. New orders rose slightly from last month to 54.1 but fell short of expectations, while prices paid continued to soar. The employment series declined further to 46.4. The BLS is expected to report on Friday this week that March unemployment held at 4.3%.

China’s official April PMIs pointed to modest manufacturing expansion at 50.3, alongside softer services at 49.4. Industrial profits rose +15.8% year on year, with some sectors benefiting from higher prices for oil, metals and chips, while others faced pressure from rising raw material costs.

Over the weekend, President Trump was reported to be considering the latest peace offer from Iran, having rejected earlier proposals that did not immediately include a block on nuclear weapons development.

Another 128 S&P 500 companies will report this week, including Palantir, AMD, ARM, Uber, McDonald’s and Block.

Alongside the Australian and European central bank meetings, March household spending figures are expected to show that Australian consumers continued to spend despite two rate rises and higher energy costs. The ISM services index and JOLTS survey will come before Friday’s US labour report, while China’s RatingDog services and composite PMIs are due before next weekend’s trade figures.

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