Morning Wrap: ASX 200 to fall, S&P 500 and Dow dip as bond yields rebound, Oil prices hit US$93

In a nutshell:

• Major US benchmarks trended lower to close at session lows, with the S&P 500 and Nasdaq now down 1.9% and 2.5% for the week 

• US 30-year yield up 6 bps to 5.25%, reversing almost the entirety of yesterday’s fall after the Treasury Department doubled its buyback to surpass long-term yields 

• Brent crude (+1.7%) reached its highest level since July 22 after Trump unveiled a sweeping economic offensive against Iran, adding to the inflation worries already driving the global bond selloff

Let's dive in.

• Major US benchmarks trended lower to close at worst levels

• Dow (-1.3%) was most impacted, after Walmart’s (-9.15%) worst session in more than four years

• Nine of the 11 sectors on the S&P 500 finished in the red, only Energy (+0.3%) and Real Estate (0.1%) eking out gains

• VIX made a 7.6% gain to finish at highest levels since August 5,

• Brent crude up 1.7% to US$93.2 a barrel, adding to a five day winning streak and now up 19.5% since 4-Aug

• Bond yields rebounded across the curve, wiping out the decline that followed Wednesday's buyback announcement (CNBC)

• JPMorgan says  Treasury interventions belie the underlying structural challenges facing the bond market and do nothing to address them (CNBC)

• US government debt neared US$40tn, with fixed income strategists citing deficit concerns, inflation stuck above target and heavy corporate issuance behind the yield run that began in June (CNBC)

• UBS chief strategist Baweja said earnings growth running at 35% to 40% should carry the S&P 500 to new highs this year, with 8,100 points his base case (BBG)

• Baweja flagged 2027 as the less certain year, warning that corporate margins are the key risk once this year's earnings momentum fades (BBG)

• Bitcoin traded above US$72,000, its highest since early June, lifting listed crypto proxies, while ether climbed towards US$2,300 (TE)

• Walmart Q2 FY27 revenue rose 5.9% to $187.9bn and topped ests, but US comp sales grew just 2.6% against the 3.5% expected and Q3 and full-year EPS guidance disappointed, sending shares down 9% (CNBC) 

• Alibaba June-quarter revenue rose 9% to RMB268.95bn with AI cloud and compute revenue up 45% to RMB48.4bn, though net income fell 75% as capex jumped 75% to RMB67.7bn, and US-listed shares fell around 5% (BBG)

• Broadcom is in talks with lenders to raise more than US$60bn of debt for an AU chip financing deal benefiting Anthropic and others (BBG)

• Samsung is preparing a shareholder return worth more than 100 trillion won, or about US$7bn, per a MoneyToday report, with the shares gaining as much as 10.3% (BBG)

• SK Hynix unveiled a 40tn won buyback, with JPMorgan flagging further returns worth at least US$130bn could follow, lifting the shares 12.7% (BBG)

• Meta faces a trial accusing its social media platforms of targeting children, raising questions Bloomberg described as going beyond the market's existing concerns over its AI spending (BBG)

• Trump announced a sweeping package of economic measures against Iran targeting banks, businesses, shipping registries, cash transfers and smuggling networks, seeking to force talks over the Strait of Hormuz (BBG)

  Trump warned on Truth Social that any nation providing a lifeline to Iran would face tremendous economic consequences, framing the campaign as an economic D-Day (Hill)

• Trump said the US has complete control of the Strait of Hormuz outside of nuisance value, adding the waterway would not be as important as it was in the past (CBS)

• Iraq asked Iran to grant special status to Iraqi oil exports through Hormuz, with Baghdad relying on oil revenues for roughly 90% of its budget (CBS)

• Only about two to three very large crude carriers have transited Hormuz daily since 7 July, according to Kpler, against roughly 130 total daily crossings before the war (CNN)

• As many as 15 million barrels a day are still leaving the Gulf on average, via the strait, alternative routes and ship-to-ship transfers, blunting Tehran's energy leverage (CNN)

• Trump paused 50% tariffs on about US$20bn of Canadian imports for three days, less than two hours before they were due to take effect, saying a tentative agreement was in place (BBG)

• Canadian and US negotiators are finalising the text of an agreement that officials on both sides say would lower US tariffs on Canadian steel, aluminium and autos (CBC)

• Prime Minister Carney asked premiers to return US alcohol to provincial shelves, though neither government has released detailed terms of the prospective framework deal (CBC)

• Bessent said the accelerated debt buyback could exceed the US$4bn per issue ceiling announced on Wednesday, describing 30-year liquidity as very poor (CNBC)

• Bessent flagged a new fiscal initiative, saying the administration would announce an increased focus on fiscal consolidation at the end of this week or the start of next (BBG)

• Trump has tasked Bessent and Budget Director Russ Vought with the fiscal consolidation effort, which is aimed at the highest US borrowing costs in years (BBG)

• Bessent said current yields do not reflect underlying fundamentals, adding the Treasury would make a market in longer-dated securities and had a big toolkit available (CNBC)

• China left its loan prime rates unchanged for a 15th straight month, with the one-year rate at 3.00% and the five-year rate at 3.50%, matching all 25 forecasts in a Reuters poll (RT)

• Analysts said the steady LPRs suggest Beijing will lean more on accelerated fiscal implementation than fresh monetary easing, as banks continue to grapple with near-record-low net interest margins (RT)

• US initial jobless claims fell 6,000 to 206,000 in the week ending 15 August, below the 210,000 expected, with the prior week revised up to 212,000 (QZ)

• Economists said the July labour data cut the odds of a Reserve Bank rate rise in September to extremely low, with the Australian dollar and local bond yields easing after the release (ABC)

• Australia's unemployment rate rose to 4.5% in July from 4.4%, above the 4.4% consensus and the highest of the post-COVID era in trend terms (ABS)

• Australian employment fell 15,800 in July against expectations for a 12,000 gain, with full-time work up 16,300 and part-time down 32,200 (ABS)

• Credit Corp Group signs binding deal to acquire HSBC Australia's credit card run-off book for ~$150m, subject to regulatory approval and expected to complete early CY27. Revised FY27 NPAT guidance of $112-120m implies 10% earnings growth on FY26 at the midpoint (CCP)

• Fisher & Paykel Healthcare lifts FY27 guidance, now expecting revenue of NZ$2.47-2.57bn and NPAT of NZ$525-565m, up from NZ$500-550m prior. Guides 1H FY27 revenue of ~NZ$1.24bn and NPAT of ~NZ$280m, up ~14% and ~24% respectively, with both periods including NZ$23m in US IEEPA tariff refunds (FPH)

• Guzman y Gomez delivers record FY26 underlying earnings with network sales up 17.9% to $1,378m, underlying EBITDA up 28.7% to $85.0m and underlying NPAT up 29.7% to $53.4m. Completed US exit at lower end of US$30-40m guidance, driving a statutory NPAT loss of $26.7m. Announces a further $100m buyback and declares full-year dividend of 48.0cps including a 14.4c special (GYG)

• Mount Gibson Iron posts a net loss after tax of $30.2m in a transitional FY26, reflecting a $58.9m non-cash Koolan Island impairment, as it pivots from iron ore to gold via the Central Tanami JV. Iron ore sales of 2.68Mwmt generated $204.0m revenue FOB (FY25: $330.5m). Holds $412.1m cash and investments (MGX)

• Perenti agrees to divest equipment rental business BTP to a Cratus Group-led consortium for $100m, comprising $80m upfront and $20m deferred, expected to complete by end-October 2026. Will book a ~$64m non-cash loss in FY26 (PRN)

• QuickFee reports FY26 underlying revenue of $16.8m, down 1% on normalised pcp, with EBTDA up 58% to $3.8m and maiden positive NPAT of $3.7m (both ex profit on sale). Declares final dividend of 0.5cps for total FY26 dividend of 1cps, with a special of up to 1cps expected late 2026. Guides FY27 EBTDA of $4.5-5.5m (QFE)

• Regis Resources delivers record FY26 with NPAT of $715m and EBITDA of $1.345B (up 72%), on gold sales revenue of $2.349B (up 43%). Produced 379,050oz at AISC of $2,945/oz. Cash and bullion rose to a record $1.184B. Declares fully franked final dividend of 20cps (incl. 5c special), taking full-year dividends to a record 35cps (RRL)

• More buybacks are needed to tame the beast: The US 30-year yield has reversed yesterday's declines, while the 10-year is trading at 4.70%, above where it sat when the Treasury announced increased bond buybacks. Gold knows what's up, closing fractionally lower overnight after Wednesday's 4.3% rally, reversing an intraday decline of 1.5%. Bitcoin surged 4.9% to US$72,729, building on yesterday's 7.1% rally. The market's message is pretty clear, own physical or finite assets, or fall behind. Even as spot gold and copper traded slightly lower, the VanEck Gold Miners ETF added another 2.5% and the Global X Copper Miners ETF rose 1.8%. Elsewhere, the US Biotech ETF fell 3.6% after closing at all-time highs yesterday, while rising yields and oil weighed on homebuilders (-2.4%), airlines (-2.1%) and steel (-1.8%). We could see a repeat of Thursday, with materials and energy offsetting broader declines. Financials are getting battered, with the S&P/ASX 200 Financials Index down in nine of the last ten sessions, off 9.2% in total.

Stocks trading ex-dividend: 

• Fri 21 Aug: ASX (ASX) – $1.047, Lendlease Group (LLC) – $0.095

• Mon 24 Aug: Bravura Solutions (BVS) – $0.15, Insurance Australia Group (IAG) – $0.20, QBE Insurance Group (QBE) – $0.33, Regal Asian Investments (RG8) – $0.10

• Tue 25 Aug: AGL Energy (AGL) – $0.26, Amotiv (AOV) – $0.23

• Wed 26 Aug: Bell Financial Group (BFG) – $0.05, Regal Partners Global Investments (RG1) – $0.05, Telstra Group (TLS) – $0.105, The Lottery Corporation (TLC) – $0.085 

Other ASX corporate actions today:       

• Dividends paid: HomeCo Daily Needs REIT (HDN) – $0.02

• Earnings: Accent Group (AX1), Acrux (ACR), AdAlta (1AD), AMA Group (AMA), Arena REIT (ARF), ARN Media (A1N), BrainChip Holdings (BRN), Charter Hall Group (CHC), Coast Entertainment Holdings (CEH), Digico Infrastructure REIT (DGT), Enero Group (EGG), GQG Partners (GQG), Guzman y Gomez (GYG), Inghams Group (ING), Latitude Group Holdings (LFS), LGI (LGI), Lifestyle Communities (LIC), Myeco Group (MCO), Paradigm Biopharmaceuticals (PAR), Peter Warren Automotive Holdings (PWR), Regis Resources (RRL), Rent.com.au (RNT), Rural Funds Group (RFF), TPG Telecom (TPG) 

• IPOs: SCX.ai Holdings (SCX) at 12:00 pm

• AGMs: None

Economic calendar (AEST): 

• 9:30 am: Japan inflation rate 

• 4:00 pm: UK retail sales