Weekend Wrap: Bulls jump, another BHP blowout and my two cents on SpaceX

Hi there!

The market's swapped one worry for another, from US-Iran to a hawkish Fed, rising 2-year yields and a soaring US dollar. It's still hard not to feel constructive on equities (ex-Australia, because, well, you know), but boy does that conviction keep getting tested.

The US dollar is the one to watch now, breaking out to its highest since May 2025 after the Fed signalled it's leaning towards hikes rather than cuts. We haven't had to think about a strong dollar in a long time, but it may be back on the agenda. Worth keeping an eye on, since a firm dollar tends to weigh on miners.

Let’s dive in.

Bulls jumped to 35.3% last week, and the bull-bear spread tipped into positive territory (+2.0pp) for the first time in eight weeks. Sentiment readings are now very in-line with historical averages.

A reader asked for some analysis about this survey vs. ASX 200 performance, so here are some of my takeaways:

• Bearishness peaked at its 61% high (8 Mar) within a week of the ASX low, not the top, so sentiment bottomed with price.

• Sentiment still shows no usable forward signal. High-fear weeks are actually followed by weaker 4-week returns (+0.3%), than low-fear weeks (+1.3%).

• The June round-trip is the clearest example of the pattern: Peak bearishness (7-Jun) coincided with a −1.2% week and the ASX low, the +2.1% bounce and the sentiment flip to bullish both came the week after.

Over the next three months, do you expect the Australian stock market to be:

• Bullish

• Neutral

• Bearish

When it comes to BHP's Jansen Potash Project, only two things seem as certain as eventual production: Delays and cost blowouts.

On Friday, BHP lifted total investment for Jansen Stage 2 to US$6.9bn including contingencies, up 41% from the US$4.9bn sanctioned in October 2023. Soaring costs eroded the initial economics:

• IRR (the project's annual rate of return) cut to 11% from the original 15-18%

• Payback extended to 8 years from around 6

The Stage 2 revision lands just six months after BHP flagged a blowout on Stage 1:

• Capex revised to US$8.4bn, against the US$7.0-7.4bn range guided in Jul-25 and an initial US$5.7bn in Aug-21

• That puts capex up 14-20% in eight months, and 47% above the original estimate

• IRR cut to 7.9-9.1%, down from 2021 estimates of 12-14%

• Payback stretched to 11-15 years from first production, against an initial ~7 years

This leaves me bullish on the broader commodity complex. Supply can barely respond to demand from megatrends like data centres, defence and electrification, and getting a project online, at any scale, has become genuinely hard. The flip side is that it makes miners a tricky place to invest, since they are the ones wearing those setbacks.

This is one of my favourite setups to watch in recent times: Game-changing announcements from industrial companies.

Southern Cross Electrical Engineering (SCEE) has won so much work that it needed to raise $150 million this week to fund capex and working capital for jobs with NextDC, Rio Tinto and another major data centre operator.

The raise carried a $3.85-4.00 bookbuild range (a ~4% to 0.5% discount) and landed right at the top, a clear sign of very strong demand.

Alongside the new awards, SCEE nudged FY26 EBITDA to "at least $75 million" from March guidance of "at least $72 million", so nothing major. But issued a maiden FY27 guidance of "at least $100 million", topping Bell Potter's (Feb-26) estimate of $79.1 million by 26%.

When SCEE resumed trading on Tuesday, it opened 11.4% higher and finished up 19.9% at all-time highs. Truly extraordinary, bullish price action.

A long list of industrials has run this playbook, most often through M&A, acquiring a local peer at a low-to-mid single digit multiple that proves highly EPS accretive. Symal and Tasmea are two names worth studying.

Where to from here? Large gap ups aren't new to SCEE, it rallied 14.6% on its February 1H26 result. The thing to watch now is a constructive, low volatility pullback. As the chart shows, SCEE traded sideways for about two months before its last breakout.

There's a bottomless pit of opinions on SpaceX, but here's my two cents.

• A pretty big financial engineering feat. Folded xAI into a rocket company, priced the IPO at a flat $135 (no book-building, no range, just take it or leave it), floated only ~5% of the company, raised ~$75bn at a ~$1.75tn valuation or 94x revenue, lobbied into major indices in ~15 trading days, and handed a large slice of that tiny float to retail (tiny supply, army of buyers). Around 46% of the entire float changed hands in a single day.

• Funny valuation commentary. You've got a loss-making company (2025 net loss of US$4.94bn) trading near a 100x revenue multiple. How do you justify it? Well, Bill Ackman said "one of the things that makes SpaceX so valuable is how valuable it is." Great analysis.

• Debt obligations. On Thursday, SpaceX was reportedly preparing a bond sale of at least $20bn to refinance a $20bn bridge loan maturing in 2027.

• More liquidity to come. The below table shows what's to come, waves and waves of new sellers, many of which are insiders that got in at far lower prices.

Speaking of SpaceX, from Tuesday's high it needed only another 20% or so to tip Elon's net worth above US$2 trillion.

You know what they say, your first trillion is always the hardest.

And on that note, we're all closer to being billionaires than Elon.