Morning Wrap: ASX 200 to fall, S&P 500 slips on weak retail sales data and Middle East tensions

In a nutshell:

• US benchmarks eased from Thursday's record close after soft retail sales and consumer sentiment data, though the S&P 500 still notched a third consecutive weekly advance, its longest run since May

• Oil pushed higher into the weekend after Washington threatened unprecedented economic measures against Iran and signalled the naval blockade of Iranian ports could run indefinitely

• Broadcom led a wobble in AI credit after Bank of America flagged the scale of debt sitting behind the off-balance-sheet chip financing vehicle it built with Apollo and Blackstone

Let's dive in.

• Major US benchmarks mixed, traded within a relatively narrow range and closed near session lows

• S&P 500 and Nasdaq slipped on Tech softness, Equal-weight S&P 500 (+0.02%) outperformed the cap-weighted benchmark by 19 bps and eked out a fourth-straight all-time high

• S&P 500 still capped a third straight weekly gain, its longest winning run since May, while the Dow closed the week lower and the Nasdaq eked out a slight weekly advance

• Berkshire has added 48.1m Alphabet shares and 17.5m Delta shares, alongside $4.5bn in stock buybacks and a $6.8bn acquisition under new CEO Greg Abel (BBG)

• VIX fell to 14.25, its lowest level since 29 December, underscoring the extended calm in equity volatility even as stocks slipped back from record territory (BBG) 

• US 20-year bond sale slated for Thursday, with new bonds indicating a yield of 5.27%, the highest yield for the tenor since it was reintroduced in 2020 (BBG) 

• Investors in the $886bn EM inflation-linked debt market are turning selective after an 11.3% year-to-date return (BBG)

• Singapore's stock index surged 23% year-to-date amid a "Goldilocks" economy (BBG)

• Applied Materials Q3 FY26: revenue up 25% to $9.12bn, about 1% ahead of ests, adjusted EPS $3.50 beat by roughly 3%, Q4 revenue guided to $10.25bn against $9.55bn ests, shares fell ~5% as flat margin guidance disappointed (RT) 

• Reddit will join the S&P 500 before the open on 18 August, replacing AvalonBay Communities, which is being acquired by Equity Residential, with the shares jumping more than 10% on the news (BBG)

• Sandisk rallied 7.3% after JPMorgan upgraded the stock to Overweight, citing “‘New Business Model’ long-term agreements have structurally reset its margin profile higher and materially reduced cyclicality by converting the majority of its business into long-dated, high-margin, take-or-pay-style revenue” (CNBC)

• Bessent says US is getting ready to squeeze Iran with unprecedented economic pressure, could target China’s ties to Iran or exchange houses that help Iran repatriate funds (BBG)

• US will announce unprecedented ‘economic isolation’ plan for Iran this week (BBG)

• More ships have come under attack in the Strait, with two vessels struck last Friday and one hit on Saturday (BBG)

• Middle Eastern oil producers continue to shuttle large volumes of crude out of the Persian Gulf, helping to keep prices low (BBG)

• Canada says there’s still a significant amount of work to do to reach an agreement to stave off a new wave 50% US tariffs next week (BBG) 

• White House announces drone tariffs to counter China (BBG)

• Trump agrees to consider Australia’s request to “consider full exemption or, at the very least, no increase” (BBG)

• Traders dumped bets on a hike at the Fed's 15-16 September meeting after unexpected job losses and soft inflation, though more than 90% odds of a higher policy rate by year end remain (YF) 

• US retail sales down 0.6% month-on-month in July vs. ests for a 0.1% increase, largest decline in more than a year as consumers pulled back on purchases at online stores and auto dealers (BBG)

• US consumer sentiment fell to 51 in August vs. 55.2 in the prior month and 54.5 ests, the first decline in three months as households worried about worsening business conditions and rising inflation (BBG)

There's an avalanche of earnings and corporate updates this morning. We'll be covering these (plus consensus numbers) on the Live Blog.

• Miner bounce: ASX 200 Materials Index tumbled 2.5% last Friday, and down ~3.7% in the last three sessions. Resource-related sectors traded broadly higher overnight, with overnight ETFs like Rare Earths/Strategic Metals (+3.1%), Nickel Miners (+2.0%), Gold Miners (+1.9%) and Copper Miners (+0.2%). Bloomberg notes that spot copper prices are surging above later-dated futures on the LME (aka backwardation or a sign of a deepening squeeze on supply). 

• Tech breather: iShares Expanded Tech-Software ETF fell 2.0% after rallying to a six-week high. Workday shares down 3.7% after an almost 18% rally prior, after Reuters reported private equity firm Silver Lake was in talks to acquire the company.

• Defence stocks: Possible positive lookthrough after US drone stocks rallied last Friday after Trump imposed import tariffs on foreign-made drones and parts. 

Stocks trading ex-dividend: 

• Mon 17 Aug: Contract Energy (CEN) – $0.194, US Masters Residential Property Fund (URF) – $0.04

• Tue 18 Aug: Bailador Technology Investments (BTI) – $0.035, Computershare (CPU) – $0.65, WAM Income Maximiser (WMX) – $0.006

• Wed 19 Aug: Commonwealth Bank (CBA) – $2.70, ResMed (RMD) – $0.066

• Thu 20 Aug: AMP (AMP) – $0.03, Helia Group (HLI) – $0.43, Solaris Australian Equity Income Plus (SET) – $0.003

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: Growthpoint Properties (GOZ), Audinate (AD8), Aurizon (AZJ), Australian Clinical Labs (ACL), Bluescope (BSL), Fiducian Group (FID), GDI Property Group (GDI), GPT Group (GPT), GWA Group (GWA), Index (IMD), IRESS (IRE), JB Hi-Fi (JBH), Lendlease (LLC), oOhMedia (OML), L1 Group (L1G), Stanmore Resources (SMR)

• IPOs: None 

• AGMs: Infratil (IFT)

Economic calendar (AEST):

• 9:50 am: Japan GDP Growth

• 12:00 pm: China Industrial Production, Retail Sales, Fixed Asset Investment, Unemployment Rate