RBA wages warning; uranium stocks tumble; Google’s massive AI spend
News in brief
The inquest into the stabbing deaths of six people at Westfield Bondi Junction by Joel Cauchi has called out a major failing in mental healthcare. The coroner has recommended reform of the mental health system, and referred Cauchi's former psychiatrist to Queensland health authorities for review.
One Nation's Pauline Hanson says she would support the Liberals and Nationals to form government, adding that a three-way Coalition might be the only way to move forward amid Labor’s massive majority in the House of Representatives.
Uranium stocks fell yesterday after AMD - Advanced Micro Devices - warned about lower earnings. The chipmaker's comments sparked fears about the AI boom, which needs a lot of power, potentially from nuclear energy - hence the sell-off in uranium stocks.
Google's parent Alphabet has announced plans to spend up to $185 billion on AI this year. That's double what they spent in 2025.
The Winter Olympics opening ceremony is early tomorrow morning our time, but some events have already kicked off. Australia is sending its largest team ever – most of them now based in the tiny tax-free ski town of Livigno, high in the Italian Alps.
Fear-o-meter
In the latest CommBank View, Commonwealth Bank Chief Economist Luke Yeaman gives his take on the big issues that will shape the economy and markets this year, including AI:
"The AI investment boom will continue to shape economic outcomes in 2026, both at home and abroad. We remain optimistic around AI, despite talk of a potential market bubble.
AI‑adoption is rising fast, with plenty of additional room for growth as use cases spread throughout economies and businesses. This will support ongoing investment in data centres, energy and other complementary capex.
AI‑related market valuations are elevated, but the major AI players are highly profitable and have relatively low levels of debt — especially when compared to their dot‑com counterparts. We are also starting to see some early evidence of a productivity payoff from AI, starting in the US.
Periodic market corrections are inevitable, but we expect AI to support stronger global growth in 2026, with the US harvesting the largest share of the benefits."
Fear & Greed Q+A today
On the steady decline of department stores in the US and Australia, from Saks and Macy's to David Jones and Myer:
“The one thing that can still save department stores is experience. You don’t go there just to buy fashion anymore — you can buy fashion anywhere, including ultra-cheap online platforms.
David Jones Elizabeth Street [in Sydney] is a good example. You walk in and there’s a pianist playing, greeters on each floor, and a sense of occasion. Iconic department stores overseas like Harrods, Selfridges and Galeries Lafayette have champagne bars, oyster bars and cafés. It’s not transactional, it’s experiential.
You can’t do that with 60 or 70 stores, but you can do it with a handful of flagship locations. I think the future is fewer stores, fewer floors, and a much stronger focus on value-added services.”
The Reserve Bank delivered some grim news this week beyond just the rate rise, revealing wages won’t keep pace with inflation until 2027. The RBA's updated forecasts show real wages going backwards until mid-2027. That's bad news for households and it undermines the government's claim that they've been delivering above-inflation pay gains. The maths is simple: even if your boss gives you a 3.5 per cent pay rise, you're going backwards when inflation's running at 3.8 per cent and your mortgage payments just jumped. Tuesday's rate hike adds about $95 a month to a $600,000 mortgage, but the real pain may be in the purchasing power squeeze.
Greed-o-meter
| Company |
Market Cap (USD) |
|
|---|---|---|
| 1 |
Nvidia
|
4.23T |
| 2 |
Apple
|
4.06T |
| 3 |
Alphabet (Google)
|
4.02T |
| 4 |
Microsoft
|
3.08T |
| 5 |
Amazon
|
2.49T |
| 6 |
Meta
|
1.69T |
| 7 |
Tesla
|
1.52T |
| 8 |
Broadcom
|
1.46T |
| 9 |
Berkshire Hathaway
|
1.09T |
| 10 |
Eli Lilly
|
1.05T |
| 11 |
Walmart
|
1.02T |
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And while we're on the topic of retailers - Wall Street has a new trillion dollar company, with Walmart passing the milestone this week. It's largely thanks to the growth of its online business. 11 US companies have now hit a market cap of $US1 trillion or more.
Listen to today's episode 🎧
Source: TradingView.com
Market caps correct at US market close Feb 4.