Morning Wrap: ASX 200 to fall, S&P 500 gives back gains as Warsh's Jackson Hole speech tanks the market

In a nutshell:

• Major US benchmarks gave back early gains to finish broadly lower but all higher for the week, including S&P 500 +0.5%, Nasdaq +0.85% and the Dow +0.5%

• Fed chair Warsh used his Jackson Hole debut to warn inflation is not meaningfully slowing, lifting September rate-hike odds from about 35% to near 60%

• Short-dated Treasuries sold off, with the two-year yield up 12 basis points to 4.36% to its highest since July 24, while gold lost 3% in response to rate hike expectations

• Trump announced a deal handing the US majority control of more than 65 billion barrels of Venezuelan oil reserves

Let's dive in.

• Major US benchmarks post early gains, but tumbled on Fed Chair Warsh's Jackson Hole speech. which clarified that he is focused on delivering 2% PCE inflation

  • Warsh also tricked the algos by mentioning the word 'hike' three times in the first five paragraphs of his speech (hike in the context a long walk, not rate hikes)

• Short-dated Treasuries sold off hardest, with the two-year yield up 12 basis points to 4.36% to its highest since July 24, while the 10-year rose 5 basis points to 4.73% 

• Futures markets moved to price a 60% chance of a September rate increase, up from 35% before the speech

• US dollar index rose 0.55% to 99.6, its highest since August 19, reflecting the same repricing toward higher rates 

• Gold fell 3.2% to trade at US$4,453/oz, after reaching a more than three-month high of $4,697.07 an ounce on Tuesday 25, while silver dipped 4.2% to $66.32 an ounce in its worst trading day since June

• Pimco's Marc Seidner said there is "too much, too fast" AI-related issuance, and that it is "very possible" this helped drag the 10-year yield toward 4.75% earlier in August (BBG)

• Convertible bond buyers chasing AI exposure are surrendering downside protection, with coupons on some new deals falling toward zero and average delta at about 64%, the highest since 2021 (BBG)

• The yen broke past 160 per dollar, its weakest in a month, erasing more than half the gains from July's coordinated US-Japan intervention after Warsh's inflation pledge lifted the greenback (BBG)

• Morningstar's Dave Sekera framed the week as entirely an AI story, saying positioning across AI plays will drive next week's tape alongside Friday's August payrolls print (CNBC)

• BMO US rates strategist Vail Hartman called it a deliberately hawkish speech that should settle any doubt about the Fed's willingness to raise rates to restore price stability (CNBC)

• Marvell Q2 FY27 revenue rose 37% to US$2.74bn against consensus of US$2.72bn, adjusted EPS of US$0.94 topped US$0.93, and data centre revenue hit a record $2.17bn, up 46% year-on-year (CNBC)

• Marvell lifted its FY28 revenue target to about $18bn from $16.5bn and FY27 to about US$12bn, but shares still fell as investors wanted a nearer-term step-up from the Google chip agreement (CNBC)

• PayPal closed down 12.7% at US$53.66 after Bloomberg reported Advent and Stripe had walked away from a bid that valued the payments firm above US$50bn (BBG)

• Nvidia fell 4.5%, giving back part of Thursday's near-9% jump, which had added US$442bn of market value in its second-largest one-day gain on record (CNBC)

• Amazon rose nearly 4% after Evercore ISI's Mark Mahaney raised his target to US$355 from US$315, saying survey evidence shows agentic AI is now additive for Amazon Retail (CNBC)

• Workday jumped 5.7% after Q2 adjusted EPS of US$2.75 and revenue of US$2.65bn beat LSEG consensus of US$2.61 and US$2.64bn (CNBC)

• OpenAI said late Friday it will cut off model access to Cursor from 12 November following SpaceX's $60bn acquisition of parent Anysphere, citing terms-of-service concerns (CNBC)

• Crude traders told Bloomberg the immediate supply impact would be negligible, though a Venezuelan exit following the UAE would strip more than 5m barrels a day of capacity from the group (BBG)

• The IRGC Navy said on Saturday that US statements describing the Strait of Hormuz as open are an obvious lie intended to control the oil price (Fox)

• Iranian deputy foreign minister Kazem Gharibabadi said on Saturday the strait remains closed and any vessel passing does so in coordination with Iran (Fox)

• The International Maritime Organization said on Friday that 19 seafarers have been killed since the conflict began, with at least 70 attacks on shipping recorded and about 6,000 sailors still stranded in the Gulf (Fox)

• The Trump administration is weighing a second round of semiconductor tariffs extending to laptops, data centre servers and gaming hardware, according to eight people cited by Politico (CNBC)

• The measures remain early stage, subject to significant change over coming months, and would be introduced through a staggered rollout, the report said (CNBC)

• China's largest DRAM maker CXMT sued the Pentagon on Friday seeking removal from the Section 1260H list of firms identified as supporting Beijing's military (BBG)

• US Trade Representative Jamieson Greer said midweek the US should consider banning some Canadian goods, and that channels with counterpart Dominic LeBlanc remain suspended (BBG)

• Warsh said the Fed must be confident underlying inflation is moving to its objective clearly and at sufficient speed, adding that otherwise "we have work to do" (CNBC)

• He described the 2% PCE goal as a firm, fixed target, said financial conditions are not currently restraining the economy, and called interest rates the Fed's predominant tool (BBG)

• Warsh said he is impressed by the overall performance of the economy, which appears to have strengthened, described the labour market as stable at full employment and said financial conditions are not restraining activity (AP)

• He again refused forward guidance or a stated reaction function, saying markets should not be looking primarily to the Fed for their next trade, while confirming short-term rates remain the Fed's predominant tool (CNBC)

• ECB Governing Council member Primoz Dolenc told Bloomberg there is a good case to raise rates in September, citing euro-area resilience and the Middle East conflict (BBG)

• Austrian central bank governor Martin Kocher said the euro-area economy has more momentum and that on inflation, estimated near 3.3% in August, there is alertness and no complacency (BBG)

• BoE governor Andrew Bailey struck a softer note on Bloomberg TV, pointing to subdued second-round effects and a softening labour market, saying he can watch the situation for the moment (BBG)

• Westpac said in a Friday note that any near-term RBA move would amount to an insurance hike, and flagged the September meeting timing as awkward given August CPI lands the following day (Westpac IQ)

• Commonwealth Bank, ANZ, Goldman Sachs, Citi and UBS now expect an RBA hike to 4.60% in November, while Deutsche Bank and NAB favour September and Westpac remains the outlier (BBG)

• Tokyo core CPI excluding fresh food rose 1.8% year-on-year in August from 1.7% in July, matching the median Bloomberg estimate and marking a third month of acceleration (BBG)

• Japan's national unemployment rate unexpectedly fell in the same Friday data release, adding to the case for a Bank of Japan move in September (FX)

A somewhat busy day for results, with plenty of micro-to-small cap companies reporting on the last day of August. Lots of announcements still rolling in, so check out the Live Blog for a full breakdown of today's results.

• Carma posts FY26 revenue of $113.8m, up 59%, with gross profit more than doubling to $10.5m as margin lifted 196bps to 9.2% and gross profit per retail unit rose 35% to $3,300. Pro forma EBITDA loss widened 8% to $30.2m, though margin improved 1,248bps to -26.5% on total units up 86% to 5,416. Guides FY27 revenue growth of over 80%, with retail deliveries booked 1 July-31 August up 120% pcp and EBITDA breakeven expected before end-CY27 (CMA)

• Liontown Resources delivers maiden NPAT of $93m and underlying NPAT of $14m on record revenue of $639m, with underlying EBITDA of $147m and operating cash flow of $182m as prices recovered in H2. Shipped 381,997dmt at 5.1% Li2O to meet FY26 guidance. Kathleen Valley is now 100% underground with the 2.8Mtpa run-rate on track for end-FY27 and FID on the expansion due next month (LTR)

• Jackson Hole aftermath: Bank of America says Warsh cleared up July's confusion by confirming a 2% PCE target and flagging that 54% of the PCE basket is running above 3% y/y, a firmly hawkish read. This placed upward pressure on short-dated yields and the US dollar, which weighed on commodity prices and risk-assets (uranium, semis, biotech ETFs all down 3-5% overnight). His macro assessment was upbeat, with solid growth, non-restrictive financial conditions and unemployment at 4.1%. Markets took it as a credibility win, with September hike pricing now above 60%, though BofA notes the onus is now on Warsh to actually deliver.

Stocks trading ex-dividend: 

• Mon 31 Aug: Ansell (ANN) – $0.581, Aurizon Holdings (AZJ) – $0.105, Australian Finance Group (AFG) – $0.048, Carlton Investments (CIN) – $0.73, GR Engineering Services (GNG) – $0.13, Iluka Resources (ILU) – $0.03, Mitchell Services (MSV) – $0.02, Pengana International Equities (PIA) – $0.014, Pinnacle Investment Management (PNI) – $0.31, Wagners (WGN) – $0.05

• Tue 1 Sept: Bendigo and Adelaide Bank (BEN) – $0.33, Codan (CDA) – $0.29, Endeavour Group (EDV) – $0.012, Fortescue (FMG) – $0.46, L1 Group (L1G) – $0.02, Pengana Global Private Credit Trust (PCX) – $0.013, Propel Funeral Partners (PFP) – $0.069, Stealth Group Holdings (SGI) – $0.015 

• Wed 2 Sept: Seek (SEK) – $0.25, Origin Energy (ORG) – $0.30, Australian Clinical Labs (ACL) – $0.092, Mercury NZ (MCY) – $0.141, Whitehaven Coal (WHC) – $0.06, Solvar (SVR) – $0.085, Shriro Holdings (SHM) – $0.01, Yancoal Australia (YAL) – $0.07, Universal Store Holdings (UNI) – $0.17, Downer EDI (DOW) – $0.163, Sonic Healthcare (SHL) – $0.63, Medibank Private (MPL) – $0.109, Liberty Financial Group (LFG) – $0.23, PLS Group (PLS) – $0.05, Steadfast Group (SDF) – $0.128, Australian Ethical Investment (AEF) – $0.10, Monadelphous Group (MND) – $0.59, Newmont Corporation (NEM) – $0.26 

• Thu 3 Sept: Korvest (KOV) – $0.40, Acumentis Group (ACU) – $0.005, Amcor (AMC) – $0.92, BHP Group (BHP) – $1.392, Ironbark Balanced Income (IBC) – $0.006, Schaffer Corporation (SFC) – $0.45, Qualitas (QAL) – $0.077, Finbar Group (FRI) – $0.03, Laserbond (LBL) – $0.008, Peter Warren Automotive Holdings (PWR) – $0.006, Cash Converters International (CCV) – $0.01, National Australia Bank (NABPJ) – $1.282, National Australia Bank (NABPK) – $1.247, National Australia Bank (NABPI) – $1.344, Nib Holdings (NHF) – $0.21, GTN (GTN) – $0.052, Symal Group (SYL) – $0.049, Woodside Energy Group (WDS) – $0.795, Coles Group (COL) – $0.37, Wotso (WOT) – $0.014, Euroz Hartleys Group (EZL) – $0.05, Macquarie Bank (MBLPC) – $1.987, Resimac Group (RMC) – $0.06, Fenix Resources (FEX) – $0.01, Meridian Energy (MEZ) – $0.132, Beacon Lighting Group (BLX) – $0.034, Ramsay Health Care (RHC) – $0.485, Pacific Current Group (PAC) – $0.28, Sigma Healthcare (SIG) – $0.02, Jumbo Interactive (JIN) – $0.15, Mayfield Group Holdings (MYG) – $0.024, Clinuvel Pharmaceuticals (CUV) – $0.05

Other ASX corporate actions today:       

• Dividends paid:  Reckon (RKN) – $0.025, Abacus Group (ABG) – $0.042, Carindale Property Trust (CDP) – $0.14, Stockland (SGP) – $0.16, Charter Hall Group (CHC) – $0.25, GPT Group (GPT) – $0.12, Mirvac Group (MGR) – $0.048, Scentre Group (SCG) – $0.092, GDI Property Group (GDI) – $0.025, Waypoint REIT (WPR) – $0.042, US Masters Residential Property Fund (URF) – $0.04, LDR Capital Property Fund (LED) – $0.016, Storage King Group (SKG) – $0.031

• Earnings: Kina Securities (KSL), Ceryvyn Therapeutics (CYV), Group 6 Metals (G6M), 1414 Degrees (14D), 5G Networks (5GN), Adheris Health (AHE), Adherium (ADR), Adisyn (AI1), Alpha HPA (A4N), AML3D (AL3), Arafura Rare Earths (ARU), archTIS (AR9), Atomo Diagnostics (AT1), Atomos (AMS), AUCyber (CYB), Austal (ASB), Betmakers Technology Group (BET), BluGlass (BLG), Cann Group (CAN), Carbonxt Group (CG1), Carma (CMA), Chimeric Therapeutics (CHM), Conneqt Health (CQT), Coventry Group (CYG), Curvebeam AI (CVB), Cynata Therapeutics (CYP), Decidr AI Industries (DAI), Delorean Corporation (DEL), DGL Group (DGL), Elixinol Wellness (EXL), Felix Group Holdings (FLX), FirstWave Cloud Technology (FCT), Gold Hydrogen (GHY), Golden Horse Minerals (GHM), Income Asset Management Group (IAM), Infotrust (ITS), Invex Therapeutics (IXC), Jindalee Lithium (JLL), Joyce Corporation (JYC), Liontown (LTR), Macarthur Minerals (MIO), Maggie Beer Holdings (MBH), Metal Powder Works (MPW), Argent Biopharma (RGT), Monash IVF Group (MVF), Murray Cod Australia (MCA), Myeco Group (MCO), Novonix (NVX), Orbital Corporation (OEC), Orthocell (OCC), Peak Processing (PKP), Pentanet (5GG), PeopleIN (PPE), PointsBet Holdings (PBH), Praemium (PPS), Recce Pharmaceuticals (RCE), RMA Global (RMY), Spenda (SPX), Sunrise Energy Metals (SRL), Synertec Corporation (SOP), Calmer Co International (CCO), Tissue Repair (TRP), Toubani Resources (TRE), Unith (UNT), Vection Technologies (VR1), Verbrec (VBC), Wellnex Life (WNX), West African Resources (WAF), WhiteHawk (WHK), WIN Metals (WIN), xReality Group (XRG), Yojee (YOJ)

• IPOs: Almasar Minerals Limited (AMK) – 11:00 am

• AGMs: None

Economic calendar (AEDT):

• 3:00 pm: Japan Consumer Confidence

• 8:30 pm: India GDP Growth Rate

• 10:00 pm: German Inflation Rate