18 May 2026 | Weekly Snapshot

Saward Dawson > Wealth Advisory Insights > Weekly Snapshot > 18 May 2026

Did you know?

More spending and more taxes. Australia’s government spending currently sits at roughly 37.5% of GDP — almost exactly the G20 average of 38%. Last week’s federal budget nudges this toward 39% as defence spending ramps toward 3% of GDP alongside spending growth in multiple areas. It shows that the size of our government keeps getting bigger.

Market Movements

The ASX gave back 0.8% for the week and is now underwater for 2026 at -1.6% CYTD. The S&P 500 edged to another record (+8.2% CYTD) and the Nasdaq continues to lead (+12.8%).

Treasurer Chalmers handed down the 2026/27 federal budget last week that included limits on negative gearing for residential property to new builds only, and replacement of the 50% CGT discount with inflation indexation plus a 30% minimum tax rate. The market reaction was notable with CBA falling 10.4% on Wednesday for its worst single day on record, wiping nearly $30 billion in market cap. NAB, Westpac and ANZ were also lower on the news. The new CGT rules apply only to gains arising after 1 July 2027 and exclude the main residence exemption. CBA economists now forecast house price growth at 3% to December 2026, down from 5% previously.

China’s Shenzhen A-shares rallied 2.4%, now +13.1% for the year — quietly one of the best performing markets globally.

At the sector level, the ASX story remains energy and resources versus everything else. Energy is up 24.5% CYTD and resources +18.5%, driven by oil above $109/bbl, By contrast, healthcare has been decimated at -32.8% CYTD, technology -18.0%, and consumer discretionary -15.4%.

In the single names, US cybersecurity names (Palo Alto +13.7%, CrowdStrike +9.6%) had a strong week, reflecting rising enterprise spend on AI-adjacent security infrastructure. Intel’s +194.8% CYTD remains one of the more remarkable turnarounds on the board, but shares were lower by 16% last week.

In the USA, annual headline CPI increased more than expected to an uncomfortable 3.8% in April – a 3-year high – from 3.3% in March as the energy price shock from the war on Iran moves through the economy. Bond yields continue to rise, reflecting the market’s ongoing adjustment to a period of higher inflation. Ceasefire negotiations with Iran remain fragile. Hormuz transit volumes are the lead indicator — no meaningful reopening yet. Oil staying above $100/bbl keeps the inflationary impulse alive globally.

Portfolio Movements

CSL falls again as Interim CEO provides frank assessment

CSL’s interim CEO Gordon Naylor delivered a frank and honest review of the issues facing CSL
FY26 guidance was cut further: Revenue now expected around $15.2bn (constant currency) vs $15.79B consensus. NPATA now around $3.1bn (CC, excluding restructuring and impairments) vs $3.34B consensus.
Additional impairments: A large ~$5bn non-cash pre-tax impairments expected across FY26/FY27, on top of the $1.5bn already taken at 1H FY26 primarily on the CSL Vifor acquisition.
We are reviewing CSL’s position in the portfolio and acknowledge the poor investment returns CSL shares have delivered over the past 2 years.

Xero FY26 result: revenue beats but profit hit by Melio integration costs

Leading accounting software provider Xero reported FY26 with revenue up 31% to NZ$2.75 billion (in line) and adjusted EBITDA up 18% to NZ$757.4m (a 2% beat), driven by 506,000 net customer additions and US revenue up 240% on a headline basis (30% organic) following the Melio acquisition.
Statutory NPAT fell 27% to NZ$167.4m, a 28% miss on consensus, reflecting NZ$50.6m in Melio transaction costs and ongoing Melio operating losses. Free cash flow rose 9% to NZ$554m.
FY27 guidance was ahead of expectations, with operating revenue of NZ$3.62 to 3.73 billion (3% beat) and adjusted EBITDA of NZ$860 to 920m (2% beat), and the board approved up to A$550m in on market share buybacks to offset Share Based Compensation dilution.

Sony reports strong FY result – ¥500B buyback, FY26 operating income guided to record

Entertainment and tech conglomerate Sony reported strong FY25 results last week with continuing operations sales up 4% to a record ¥12.48 trillion and operating income up 13% to a record ¥1.45 trillion. The result was below consensus around ¥1.56 trillion due to one-off impairments at Bungie (¥120B) and Pixomondo (¥27B), with Q4 sales of ¥3.04 trillion beating estimates but EPS missing.
The standouts were Music (sales +15%, operating income +25% to ¥447B) and Imaging & Sensing Solutions (sales +20%, operating income +37% to ¥357B), with Music lifted by streaming royalties and I&SS by smartphone sensor demand. Game & Network Services operating income also rose 12% to a record despite the Bungie write-down.
Sony also announced a ¥500 billion (~US$3.2 billion) share buyback running to May 2027 and lifted the FY27 dividend forecast to ¥35 from ¥25. FY27 operating income is guided to a record ¥1.6 trillion (+11%) on flat sales.

The Week Ahead

Monday 19 May: RBA meeting minutes from the May decision (cash rate hiked 30bp to 4.10%). Markets will parse the board’s reasoning and any forward guidance signals. This time last year: RBA on hold at 3.85%, with a dovish tilt
Tuesday 20 May: Australia Wage Price Index (Q1) — released 13 May: actual +0.8% QoQ / +3.3% YoY, in line with consensus. Prior year (Q1 2025): +0.9% QoQ / +3.4% YoY. The deceleration from 3.4% to 3.3% suggests wage pressures are easing modestly, though still above the RBA’s comfort zone. Private sector wages +3.2% (vs +3.3% a year ago); public sector +3.3% (vs +3.6%).
Thursday 22 May: US Initial Jobless Claims — consensus ~230K. Prior week: 229K. Prior year: 227K.
Friday 23 May: Japan CPI (Apr) — consensus ~3.5% YoY. Prior month: 3.6%. Prior year (Apr 2025): 3.6%. The Bank of Japan remains the only major central bank still normalising from ultra-loose policy. US New Home Sales (Apr) — consensus ~680K annualised. Prior month: 670K. Prior year (Apr 2025): 683K.

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Saward Dawson Wealth Advisors Pty Ltd, a Corporate Authorised Representative of Akambo Pty Ltd t/a Accountants Private Advice

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