May was actually a record month for American company profits. Earnings grew at the fastest rate since 2021, margins hit an all-time high, and for a moment the case for holding shares felt almost undeniable. But strip out five or six technology companies and the whole picture changes. Remove Nvidia and Micron from the technology sector and earnings growth nearly halves. Remove Alphabet and Meta from communications and growth flips from fifty percent positive to a four percent decline. A rally this concentrated is a bit like playing the basketball game with a five player team with no subs. When one of them got injured, the whole game falls apart.

Screenshot 2026 06 11 114935

Source: Landmark Wealth Management LLC

That stumble arrived in the first week of June. Cautious guidance from chip designer Broadcom sent chip stocks down ten percent in a single day. Australian shares followed global markets lower and are sitting about two percent below where the month started. Then on Monday, most of those losses recovered almost as quickly as they appeared. The explanation matters more than the numbers here. Institutions were already raising cash ahead of the SpaceX IPO by trimming their most profitable positions, which happened to be the same chip and technology stocks that had led markets higher all year. The sell-off wasn't a signal that something fundamental broke... It was a signal that someone else was playing a different game to the one most people were watching.

Screenshot 2026 06 11 120457

SpaceX listed on the Nasdaq this week at $135 a share, valuing the company at 1.75 trillion dollars. The largest IPO in stock market history. Clients forwarding the CommSec subscription invitation email, asking me the same two questions. Is it a good investment? Is it overvalued? My honest answer is that it depends entirely on which game you're in.

There's a quote from Morgan Housel this had reminded of, "Don't take financial cues from people who are playing a different game to you." The flip traders want a quick opening pop and they're out, the institutions treat it as one position among hundreds and rebalance if it halves, the true believers are buying because they think this is the next Apple and they have a decade of patience to match, and then there's the retail investor who opened the CommSec email, felt the excitement, and hasn't clearly thought through which of those games they're actually playing. I watched something near our office on Pitt Street when gold was trading at its peak above $5000 US dollars an ounce. There was a queue around the block outside ABC Bullion. Everyday people lining up knowing they'd pay a 10% premium just to walk out with a coin. The excitement was real... Gold is now about 20% below that peak. History rhymes. Know your game.

For clients invested through us, how we've built your investments in relation to the AI trade is deliberate, not impulsive. We've always believed that building something resilient matters more than chasing the headline, which means your investments are spread across areas not just chips, memory storage or AI applications, but also the infrastructures that support all these, the energy and material.

The Reserve Bank meets this month and is widely expected to hold its rate at 4.35%. After three increases already this year, that's a welcome pause for anyone carrying a mortgage, and based on the data below, Australia is very dependent on debt and therefore what the RBA does.

Screenshot 2026 06 11 133601

But a pause and a turning point are very different things. The normal logic of rate rises goes like this. When an economy is growing too quickly, making borrowing more expensive slows spending, cools things down, and extends the growth cycle for longer. It's a sensible tool for a specific problem. The issue is that Australia doesn't quite have that problem right now. Growth is weak. Households are already under genuine pressure. Unemployment has edged up to 4.5%. What we have instead is prices rising not because the economy is running hot, but because of what's happening outside our borders and a government whose spending is pushing in exactly the opposite direction to what the Reserve Bank is trying to achieve. It's a bit like the Reserve Bank putting the economy on a diet, then watching the government hand it a packet of Tim Tams.

When you apply a blunt tool to the wrong problem, you risk damaging things you didn't mean to touch. Rate rises designed to slow a booming economy do something quite different when applied to one that's already struggling. They add pressure to a household sector that is already stretched, without fixing the supply issues actually driving prices up. The honest picture is that the economy probably has further to slow before it finds its footing. That's not a prediction of crisis. But the rebound most people are waiting for is still some way off. This is an important concept to understand and is a fundamental reason out investments are positioned to take advantage of global movements so that these local issues don't have a lasting impact on your financial future.

The SpaceX IPO will dominate the financial headlines, but it's not the debut price I'm watching. It's what happens to market liquidity in the weeks that follow. A record scale IPO pulls capital out of existing positions because the money has to come from somewhere. History is consistent on this. The bigger the IPO, the higher the probability of a market correction shortly after. Worth keeping in mind.

Closer to home, the budget legislation is still working its way through, and the treatment of discretionary trusts, family trusts and testamentary trusts in particular, hasn't settled into its final form yet. Markets aren't afraid of change. They're afraid of not knowing what's coming. Once the legislation lands, planning conversations become much cleaner. Until then, we watch.

The Middle East remains the wild card underneath all of it. A genuine de-escalation brings fuel costs down, eases domestic price pressures, and gives the Reserve Bank real room to move. It's the one development that could change the shape of the second half of 2026 more than any rate decision.

Lastly, know your game. Don't take cues from people who are playing a different one to yours.