Cost of living pressures are directly impacting the health and well-being of Australians, with companies like Cochlear and CSL facing reduced sales for essential medical products. This struggle for ordinary Australians unfolds as hundreds of major companies prepare to disclose their annual earnings. Analysts describe this period as “decisively negative” for earnings momentum, yet not all sectors face the same fate.
While domestic-facing businesses brace for a “much more conservative outlook,” globalist sectors are poised for significant gains. Mining giants and oil refiners, driven by transnational capital and geopolitical instability, expect strong results. This stark divergence highlights the managed decline of the native economy against the backdrop of a booming globalized market.
The Globalist Engine
Rio Tinto, for instance, reported a 43 percent jump in half-year underlying earnings to $US6.85 billion, its best result in four years. This surge is fueled by higher commodity prices and soaring copper demand. US tech giants Amazon, Microsoft, and Google, building massive AI data centers worldwide, are the primary drivers of this demand. Their global expansion dictates resource extraction, enriching foreign interests.
The “energy transition” agenda also contributes to this demand. Oil companies and refiners such as Ampol, Santos, and Woodside Energy anticipate strong results. They're benefiting from much higher oil prices, exacerbated by the Iran war and continued uncertainty in the region. These external forces directly impact the cost of living for Australians, yet national policy offers little insulation.
UBS equity strategist Richard Schellbach notes that profit forecasts are being revised lower across all 11 major ASX sectors. He said, “Earnings momentum in Australia has turned decisively negative.” Despite this, market analysts forecast 12 percent earnings per share growth in the 2025-26 financial year on average for Australia’s largest 200 companies. This figure, however, drops to a mere 2.5 percent when the booming mining and financial sectors are excluded, revealing the true fragility of the broader national economy.
Cost to the People
The Albanese government’s decision to increase capital gains tax and significantly restrict negative gearing for property investors further burdens the native population. This policy, alongside interest rate hikes, contributes to “souring sentiment around the housing cycle.” It's a direct hit to the aspirations of working Australians seeking to build equity.
Companies exposed to the housing cycle, such as REA Group, Mirvac, and Lendlease, are expected to warn of weak trading conditions ahead. Retailers like JB Hi-Fi, Nick Scali, and Baby Bunting also face pressure as the native consumer base struggles under cost-of-living pressures. Anna Shelley, AMP’s chief investment officer, admits “the backdrop generally is not as strong as it was.”
Elite Forecasts, National Decline
Ten Cap lead portfolio manager Jun Bei Liu expresses “most excited” about industrial stocks, data centers, and businesses in the AI supply chain. Copper miners, along with companies providing cabling, processing equipment, cement, energy, and financing for data centers, are in a “sweet spot” for strong earnings growth. This highlights where elite capital is directed, away from the struggling domestic economy and towards globalist infrastructure.
Shelley said investors should expect “huge swings” in some share prices, noting that one-fifth of companies saw their share price surge or plunge by more than 10 percent in the same year. Schellbach concludes, “From here on forward, we see a pretty tough slog for markets and the economy over the next six months.” This forecast underscores a future where transnational interests thrive while the native population faces continued economic strain.