Douglas Orr, CFA

Founder CEO Endeavour Equity Strategy
Macro /Research/ Technicals. Aust Treasury, Strategist ABN-AMRO. Ski, Ocean Swimming & Surf. Sydney Swans

[Douglas Orr, CFA @EquitOrr]

US S&P 500 EPS revisions: the LARGEST continuous mid cycle upgrades in 40years👀⏬

While the outlook remains uncertain (inflation pressures, US deficit funding, CAPEX sustainability) ...there are material reasons for OPTIMISM:

* US Reindustrialization Renaissance * miracle turnaround in US Industrial Economy.

US Industrial Economy has basically spit into & maybe shifting towards:
• Import/ Consumer goods Economy – very weak
• The Domestic Industrials/ Manufacturing Economy -very strong

The US is entering a simultaneous:
i) an AI capex cycle,
ii) an infrastructure cycle,
iii) a defence manufacturing cycle,
iv) energy/ manufacturing reshoring cycle

[Douglas Orr, CFA @EquitOrr]

US S&P 500 EPS revisions: the LARGEST continuous mid cycle upgrades in 40years👀⏬

While the outlook remains uncertain (inflation pressures, US deficit funding, CAPEX sustainability) ...there are material reasons for OPTIMISM:

* US Reindustrialization Renaissance * miracle turnaround in US Industrial Economy.

US Industrial Economy has basically spit into & maybe shifting towards:
• Import/ Consumer goods Economy – very weak
• The Domestic Industrials/ Manufacturing Economy -very strong

The US is entering a simultaneous:
i) an AI capex cycle,
ii) an infrastructure cycle,
iii) a defence manufacturing cycle,
iv) energy/ manufacturing reshoring cycle

[Douglas Orr, CFA @EquitOrr]

@ausstockchick https://t.co/YsLd2br0BT

[Douglas Orr, CFA @EquitOrr]

Australian Government looks set in tonight’s FY26 Budget to “bludgeon” Residential House prices & business generally with:

a) a near doubling of Capital Gains tax likely on all investment
b) removal of overly generous deductibility allowances on -ve gearing in Resi Investment

The changes are being sold on the basis of “intergenerational equity” since housing has been a speculative vehicle especially with overly dovish RBA low rates. There is some merit to this - the tax system has long needed reform - the priority needs to be smart/ comprehensive reform & boosting * developed worlds worst * productivity growth first.

Capital Gains tax rates look set to move the highest in the developed world – making Australia an unattractive investment destination

Below we highlight what the government needs to do to ensure “intergenerational equity” => generate real growth via productivity vs the current high Spend & Tax plus high immigration pathway.

Chart below - Aust Resi Valuations surged in 1999 when CGT rate was reduced...in 2026 it is being returned back to near 46%. 1/

[Douglas Orr, CFA @EquitOrr]

@OzStoic @SamanthaLaDuc @BobEUnlimited @Scutty @AvidCommentator @matt_barrie Proprietary Endeavour Research!

[Douglas Orr, CFA @EquitOrr]

Australian Government looks set in tonight’s FY26 Budget to “bludgeon” Residential House prices & business generally with:

a) a near doubling of Capital Gains tax likely on all investment
b) removal of overly generous deductibility allowances on -ve gearing in Resi Investment

The changes are being sold on the basis of “intergenerational equity” since housing has been a speculative vehicle especially with overly dovish RBA low rates. There is some merit to this - the tax system has long needed reform - the priority needs to be smart/ comprehensive reform & boosting * developed worlds worst * productivity growth first.

Capital Gains tax rates look set to move the highest in the developed world – making Australia an unattractive investment destination

Below we highlight what the government needs to do to ensure “intergenerational equity” => generate real growth via productivity vs the current high Spend & Tax plus high immigration pathway.

Chart below - Aust Resi Valuations surged in 1999 when CGT rate was reduced...in 2026 it is being returned back to near 46%. 1/

[Douglas Orr, CFA @EquitOrr]

2/

What should Government be doing?

Aust Government is referencing “intergenerational equality” to justify their likely tax measures. There is partial merit to the extent the tax system need reform – however implementing what could be the highest CGT rate in the developed world ignore the fact that the other policy settings which have collapsed productivity will still be wrong. In short the government should be boosting productivity before it smashes private enterprise.

We note a better answer would be to generate real growth via productivity vs the current high immigration pathway. Canberra should be:
i) Cutting Government Spending – back toward historic average
ii) Reforming the tax system more generally (ie less emphasis on Income tax & moving to land tax vs stamp duty)
iii) Generate Growth by Boosting productivity by:
a) Reduce Regulation &
b) Streamline planning approval process on resi & resources CAPEX.

[Douglas Orr, CFA @EquitOrr]

RBA Australia:

+25bps Hike with a Hawkish tone from the press release. RBA focus is on attacking Inflation Expectations against capacity constraints, excess Fiscal/ Immigration & the 2nd Order Effects which are in the pipe & they referenced in para 1.

RBA Hike +25bps to 4.35%, 8 to 9 members voted to hike

Key Points
· Inflation picked up in H2-25 due to capacity pressures (ie too much Fiscal & Immigration)
· Oil Shock is adding to pressures & signs firms experiencing cost pressures & looking to pass them on. ST measures of inflation expectations have also risen
· Plausible scenarios of stagflation as a result of ratcheting inflation expectations
· RBA assessed inflation likely to remain above target for some time

[Douglas Orr, CFA @EquitOrr]

1999 the tax breaks introduced

The P/Income multiple jumped from 4 to 8x

Currently on 10x!

[news.com.au @newscomauHQ]

Younger voters put him in power. Now the PM is preparing to reward them with a tax shake-up that will enrage property barons.

[Douglas Orr, CFA @EquitOrr]

@DominicVillaSC https://t.co/QetO8aJoFb

[Douglas Orr, CFA @EquitOrr]

Why are Australian House prices “Impossibly Unaffordable” based on IMF Measures Median Prices to Median Income?
A. Major tailwinds from:
a) Favourable Tax Treatment (CGT discounts & -ve gearing)
b) High Migration rates
c) very Dovish RBA rates ⬇️👀
d) loose Foreign Investment

We note all of these are tightening/ reversing due to backlash from: May-26 Budget likely reduces favourable tax treatment – reduction in GCT discount & -ve gearings allowances, Migration rates are reducing (marginally), 3 years of very dovish RBA low rates has finally reversed. Foreign Investment restrictions from Jul-26.

[Douglas Orr, CFA @EquitOrr]

@DominicVillaSC Canberra has the worlds # 1 Housing UN-AFFORDABILITY
Policies - they are very effective!

[Douglas Orr, CFA @EquitOrr]

@9NewsAUS @ashleywick9 “We go Woke – you go Broke”

Why does Australia have among world’s most expensive House Prices?

A. The RBA rates very hot for over 10 years

How has the RBA been getting away with that?

A. Underqualified Board offered negligible resistance to Dovish Gov Lowe

[Douglas Orr, CFA @EquitOrr]

RBA went rogue dovish post covid!

RBA Aust Real Rates more than 200bp below NZ & Canada comparator rates! @ausstockchick @southernmacro

[Douglas Orr, CFA @EquitOrr]

Why are Australian House prices “Impossibly Unaffordable” based on IMF Measures Median Prices to Median Income?
A. Major tailwinds from:
a) Favourable Tax Treatment (CGT discounts & -ve gearing)
b) High Migration rates
c) very Dovish RBA rates ⬇️👀
d) loose Foreign Investment

We note all of these are tightening/ reversing due to backlash from: May-26 Budget likely reduces favourable tax treatment – reduction in GCT discount & -ve gearings allowances, Migration rates are reducing (marginally), 3 years of very dovish RBA low rates has finally reversed. Foreign Investment restrictions from Jul-26.

[Douglas Orr, CFA @EquitOrr]

@thetobifaj @MENA_Puls https://t.co/KvzkbDgOXT

[Douglas Orr, CFA @EquitOrr]

Trump/ Hegseth replacing to US Army Commanders/ Generals on eve of escalation of US Iran War may well signal bombing of civilian targets.

*History doesnt repeat, but it sure does like to rhyme*

Trump/ Hegseth replace 4 top US Army commanders including Chief of Staff (Head of the Army). This occurs in the days prior to a likely escalation of the US- Iran War & may well signal bombing of Civilian Targets.

* Watch the Feet not the Lips*

Replacement of key commanders before a major battle
has a parallel at the end of WW2 in 1944 where Curtis Le May replaced Hansell as head of 21st US Bomber Command before the extensive & horrific napalm fire bombing of the majority of large Japanese cities. The majority of Japanese cities were 20-50% fire bombed in the following campaign.

Hansell objected strongly to the campaign preferring industrial/ military targets only. Le May was less wedded to precision bombing doctrine & more focused on achieving practical results quickly ie that "green lighted" extrensive fire bombing of towns in Japan

Reference excellent book "The Bombing Mafia" by @Gladwell Malcom Gladwell.

https://t.co/FzGqdFMPs6

[Douglas Orr, CFA @EquitOrr]

https://t.co/KvzkbDgOXT

[Tobi Faj @thetobifaj]

A four-star dropping “a madman will lead the great US military to ruin” an hour after his resignation is about as blunt a warning as you’ll ever hear from the top ranks.

It suggests the internal pushback on how this Iran campaign is being run finally reached its limit.

When experienced leadership starts speaking out publicly amid active operations and mounting losses, it’s the kind of fracture that makes you wonder how steady the command structure actually is right now.

[Douglas Orr, CFA @EquitOrr]

@ausstockchick ATM with another Trump 48hr ultimatum to allow free passage in the SOH or be bombed to stoneage

Its looking like 3, 4 & 5 are the key focus in coming days...

That suggests higher short term oil - before breaking "good" (1, 5) or "bad" (2, 3, 4)

[Douglas Orr, CFA @EquitOrr]

ATM with another Trump 48hr ultimatum to allow free passage in the SOH or be bombed to stoneage

It's looking like 3, 4 & 5 are the key focus in coming days... That suggests higher short term oil - before breaking "good" (1, 5) or "bad" (2, 3, 4)

[Jim Bianco @biancoresearch]

Iran's answer?
(posted 30 minutes ago)

*KUWAIT PETROLEUM CORP CONFIRMS HQ HIT BY DRONE STRIKE

*KUWAIT PETROLEUM CORP: OIL SECTOR LEADERSHIP ASSESSING DAMAGES

*KUWAIT PETROLEUM: CONFIRMS FIRE AT SITE OF DRONE STRIKE

*KUWAIT PETROLEUM CORP: TAKING SAFETY MEASURES, SECURING SITE

[Douglas Orr, CFA @EquitOrr]

@biancoresearch ATM with another Trump 48hr ultimatum to allow free passage in the SOH or be bombed to stoneage

Its looking like 3, 4 & 5 are the key focus in coming days...

That suggests higher short term oil - before breaking "good" (1, 5) or "bad" (2, 3, 4)

[Douglas Orr, CFA @EquitOrr]

ATM with another Trump 48hr ultimatum to allow free passage in the SOH or be bombed to stoneage

Its looking like 3, 4 & 5 are the key focus in coming days...

That suggests higher short term oil - before breaking "good" (1, 5) or "bad" (2, 3, 4)

[Douglas Orr, CFA @EquitOrr]

Trump/ Hegseth replacing to US Army Commanders/ Generals on eve of escalation of US Iran War may well signal bombing of civilian targets.

*History doesnt repeat, but it sure does like to rhyme*

Trump/ Hegseth replace 4 top US Army commanders including Chief of Staff (Head of the Army). This occurs in the days prior to a likely escalation of the US- Iran War & may well signal bombing of Civilian Targets.

* Watch the Feet not the Lips*

Replacement of key commanders before a major battle
has a parallel at the end of WW2 in 1944 where Curtis Le May replaced Hansell as head of 21st US Bomber Command before the extensive & horrific napalm fire bombing of the majority of large Japanese cities. The majority of Japanese cities were 20-50% fire bombed in the following campaign.

Hansell objected strongly to the campaign preferring industrial/ military targets only. Le May was less wedded to precision bombing doctrine & more focused on achieving practical results quickly ie that "green lighted" extrensive fire bombing of towns in Japan

Reference excellent book "The Bombing Mafia" by @Gladwell Malcom Gladwell.

https://t.co/FzGqdFMPs6