Morning Wrap: ASX 200 to slip, S&P 500 closes flat, Oil prices spike to US$86 on Iran uncertainty

In a nutshell:

• Major US benchmarks stalled just under Friday's record, with the S&P 500 finishing flat as an oil-led energy rally offset weakness across AI infrastructure and mega-cap tech

• Nvidia signed agreements with six of the world's largest asset managers to mobilise more than US$500bn of third-party capital for AI infrastructure

• Brent rallied ~6% to US$87 a barrel after Tehran said the Strait of Hormuz will not reopen until Washington meets its conditions, reviving inflation and Fed rate-hike concerns

Let's dive in.

• Major US benchmarks finished mixed and little changed, the S&P 500 closing flat after drifting into modest losses through the session

• Breadth was mixed, with the six sectors trading higher and the Equal-weight S&P 500 (+0.06%) eking out a small gain, closing just 1 pt away from its 4-Aug record high

• Bulled up markets hit a wall of downward drivers, with Brent up ~6% to ~US$87 (now up 11.6% in the last four sessions), US 10-year yield up 5 bps to 4.70% (on the cusp of a fresh 20-month high) and massive debt issuance from Big Tech (historically, banks have dominated the list, but now, Amazon is the 5th largest issuer in the investment-grade index with ~$120bn debt, while Oracle is #6 with ~$115bn)

• FOMO driving Wall Street buying, with S&P 500 options metrics flashing record bullish signals (RT)

• Demand for downside protection on the S&P 500 falls to lowest since Apr-25 (BBG)

• US high-grade bond market sees busiest day for issuers since January (BBG)

• Retail investors turn net sellers of SpaceX shares on Friday for first time since IPO (RT)

• JPMorgan strategists lifted their S&P 500 target to 8,000 from 7,800, a second increase in two months, citing evidence AI capex is being monetised (BBG)

• Goldman Sachs told investors to stay invested, pointing to a dovish rate path, AI disinflation and the likelihood of lower oil (CNBC)

• Emerging market equities fell below half the S&P 500's multiple for the first time in at least two decades, MSCI EM on 9.9x forward earnings against more than 20x (BBG)

• Nvidia signed memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilise more than US$500bn of third-party capital for AI infrastructure (CNBC) 

• Intel plans a US$15bn common stock offering, likely its first public share sale since listing in 1971, citing a strong and sustainable demand environment for AI compute (BBG)

• TSMC's monthly sales surge 45%, driven by continued strong demand for AI chips (BBG)

• GameStop is weighing abandoning its US$56bn bid for eBay and assessing a partnership instead, Bloomberg reported, against a GameStop market value of less than US$9bn (CNBC) 

• Netanyahu formally rejected the 15-point Gaza peace plan at a cabinet meeting, saying forces will not leave the territory until Hamas fully disarms (AJ)

• Trump said Washington is "low-keying" talks and only "semi-negotiating" with Tehran, and will lean on the naval blockade and economic pressure rather than fresh strikes (CNBC)

• Trump said the US will seek compensation from Iran for people it has killed in many conflicts, responding to Tehran's demand for reparations over war damage (AJ)

• Israel-Lebanon talks have stalled with no further meeting dates in the diary, an Israeli official told CNN, after the latest US-mediated round in Rome (CNN)

• Westpac told clients uncertainty remains high in the sixth month of the Iran war, with Hormuz effectively closed and the Houthis now disrupting alternative Red Sea routes (CNBC)

• Satellite data shows Iran's oil terminals have appeared largely idle this month amid US blockade (BBG)

• Strait of Hormuz traffic fell sharply over the weekend, with crossings dropping from 15 Friday to six Sunday (AA)

• House Select Committee on China chairman John Moolenaar pressed Commerce to enforce the January 2025 foundry rule and stop advanced logic chips reaching untrusted Chinese firms (RT)

• At least three of the Bank of Japan's nine board members said rates could rise faster than the current pace of roughly two increases a year, strengthening the case for a September hike (RT)

• BOJ may hike early, but political pressure to support bond markets could blunt tightening as yields rise (RT)

• RBA set to hold rates steady again and signal readiness to tighten further on stubborn inflation (BBG)

• Fed's Hammack says now is the time to act on policy; delaying action will make it harder to return inflation to target (YF)

• Warsh sees urgent need for Fed to more fully embrace AI, both to understand what is happening in economy and help make better policy decisions (AX)

No major economic developments overnight.

• Accent Group independent board committee continues to recommend shareholders reject Frasers Group's $0.65/sh cash offer (AX1)

• Amotiv reports FY underlying EBITA $195.1m, 11% ahead of $176.5m ests, with underlying NPAT $120.3m broadly flat on year-ago $119.1m and revenue $1.02bn. Final DPS $0.23 fully franked. Guides FY27 modest EBITA and revenue growth y/y (AOV)

• Janus Henderson reportedly weighing a tilt at Perpetual, having hired a bank and spoken with the board, though it hasn't lodged even an informal bid and its seriousness is unclear (AFR)

• Life360 reports Q2 adjusted EBITDA US$31.1m, up 53% y/y and 22% ahead of US$25.5m ests, on revenue US$159m (+38% y/y) vs US$156.5m ests. MAU 102.4m, up 16% y/y. Reaffirms FY26 EBITDA US$130-140m and revenue US$650-685m (360)

• Macmahon Holdings awarded a $406m, 5-year underground mining contract at the Snowy River project by Endura Mining, covering development, production and backfill, commencing Oct-2026 (MAH)

• Newmont settles all NGM joint venture disputes with Barrick, contributing excluded properties including Barrick's Fourmile and Newmont's Fiberline and Mike into the JV for US$1.95bn consideration to Barrick. Consents to Barrick's proposed North American gold IPO under a modernised JV agreement (NEM)

• Southern Cross Media Group reports FY reported NPAT $42.8m ex-items, 19% short of $53.0m ests, on gross revenue $1.87bn in line and EBITDA $191.9m ex-items 2% ahead. Q1 TV revenue flat y/y, audio up low single digits. Outlook stays subdued (SXL)

• SGH Limited reports FY underlying NPAT $920m, 3% below $949.4m ests, on revenue $10.56bn and EBITDA $2.08bn. Final DPS $0.32 fully franked. Guides FY27 EBIT flat to low-single-digit growth vs +3.7% ests (SGH)

• Energy: Oil prices up ~6% overnight with no end in sight for US-Iran negotiations. The S&P 500 energy sector gained 4.6%, its best single session of the year, taking it to a roughly 10 week high. US diesel refinery margins also jumped about 7.3% overnight to near record highs, which likely explains why the pullback in Ampol and Viva Energy has been so shallow.

• Software: The iShares Expanded Tech-Software ETF rose 2.2% overnight to its highest since 1 June. REA and CAR Group have both seen strong results reactions despite FY26 numbers and guidance landing broadly in line to slightly ahead. I'll have a deep dive on both today.

• Arena REIT downgraded to Underweight from Equal-weight; target cut to $2.65 from $3.75 (Morgan Stanley)

• Arena REIT downgraded to Neutral from Buy; target cut to $2.71 from $3.92 (UBS)

• Tabcorp upgraded to Equal-weight from Underweight; target unchanged at $0.96 (Morgan Stanley)

Stocks trading ex-dividend: 

• Tue 11 Aug: None

• Wed 12 Aug: Sandon Capital (SNC) – $0.005

• Thu 13 Aug: Reckon (RKN) – $0.025, Rio Tinto (RIO) – $3.029

• Fri 14 Aug: Argo Investments (ARG) – $0.20, BKI Investment Company (BKI) – $0.04, Plato Income Maximiser (PL8) – $0.006, Spheria Emerging Companies (SEC) – $0.011

Other ASX corporate actions today:       

• Dividends paid: Collins Foods (CKF)

• Earnings: Amotiva (AOV), Helia (HLI), Centuria Industrial REIT (CIP), Chrysos (C79), Life360 (360), SGH (SGH), Southern Cross Media (SXL) 

• IPOs: None 

• AGMs: None

Economic calendar (AEST):

• 11:30 am: NAB Business Confidence

• 2:30 pm: RBA Interest Rate Decision (Ests: Hold at 4.35%)