The Monday Report – 03 August 2026

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This story features CREDIT CORP GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: CCP
The company is included in ASX300 and ALL-ORDS

US markets end higher on Friday, led by a rally in Amazon shares, following Microsoft's strong performance the day before.

After a positive closing week of July for the Australian market, ASX200 futures are pointing to a soft start into August. 

Local earnings season will gradually ramp up from later this week onwards.

Good Morning,

The Australian market finished broadly flat on Friday, up 9 points to 8,977, Miners led the gains, with healthcare lagging.

With the start of August reporting season, stay in touch with which companies are due to report with the FNArena Calendar https://fnarena.com/index.php/financial-news/calendar/

This week’s scheduling includes Credit Corp ((CCP)), Light & Wonder ((LNW)), Pinnacle Investment Management ((PNI)), AMP Ltd ((AMP)), Beach Energy ((BPT)), News Corp ((NWS)), REA Group ((REA)), Block ((XYZ)), Nick Scali ((NCK)) and ResMed ((RMD)), among others.

The week that was, Tony Sycamore, IG 

The ASX200 finished 204 points or 2.33% higher last week at 8,976.

Its gains were supported by the cooler Australian inflation report for June and a more measured tone from the RBA Governor on Tuesday, which raised expectations that the cash rate will remain at 4.35% at next week’s Board meeting.

Solid trading updates from two of the major miners added further support.

The best-performing sectors were Information Technology (up 8.52%), Health Care (up 5.12%), Telecommunications and Consumer Discretionary (both up 3.76%). Energy (down -0.80%), Utilities (flat), Industrials (up 1.38%) and Financials (up 1.86%) underperformed the broader market.

The Australian rates market starts the week pricing in just 1 bp of rate hikes for the RBA’s August Board meeting. Looking further out, 14 bp of RBA hikes are priced for the remainder of 2026.

Crude oil has dived- 6.69% lower on IG Weekend Markets. Presuming the move holds between now and Monday morning, it would see WTI crude oil reopen near US$81.00 –- from its US$86.80 close Saturday morning.

Today’s Big Picture, J.L. Bernstein extract

July Looked Calm And Wasn’t

The Dow ends the month about where it started while semiconductors are tracking their worst month since 2008.

The Nasdaq-100 had its steepest monthly drop since March 2025.

Index levels hid a violent rotation out of the chipmakers and into the companies buying the chips.

I think that rotation is the July story, not the headline number.

The Bond Market Pulled The Hike Forward

Wednesday’s selling hit long bonds while short yields fell, which is a bet the Fed waits too long and pays for it later.

Today yields rose across every maturity after two dissenting officials explained why they wanted a hike this week.

Futures now lean toward an increase by September. Stocks closed higher anyway, so equity investors are not taking that seriously yet.

Two Days, Three Records

Apple gave up around -US$470 billion in market value, the second largest one-day loss any US company has ever taken and its worst session since 2020.

Amazon put up its biggest one-day market value gain ever in the same session.

Microsoft’s US$450 billion was the largest one-day gain by any US company on record.

ANZ Bank, Australian Morning Focus extract

Equity markets rose last Friday.

Bond yields rose across the curve, absent a major catalyst. 

The S&P500 closed up 0.7%, while the Nasdaq rose 1.0%. In Europe, the EuroStoxx was up 0.2%, while the FTSE100 was down -0.3%. 

The yield on the US 10yr Treasury note rose 8.6bp to 4.73%, building on higher yields in the European session. 

In commodities, the active WTI oil contract rose 3.6% to US$84.7/bbl. Gold fell -0.7% to US$4,046.2/oz. 

On Sunday, President Trump posted that he would hold off on further attacks against Iran after Iran and other Middle Eastern nations said they were working towards a deal.

President Trump agreed to cancel new strikes “subject to being able to rapidly make a DEAL” including the “Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat.”

The Iranian foreign minister said negotiations between Iran and Oman regarding the Strait are in their final stages. 

The US Employment Cost Index rose 0.9% q/q in Q2. The annual rate was unchanged at 3.4% y/y. Taken together with robust labour productivity growth, wage growth is a source of disinflationary pressure. 

Separately, University of Michigan consumer sentiment improved slightly in the final July survey. The headline index rose 0.8pts to 55.2. 1-year-ahead and 5-10 year-ahead inflation expectations were both unchanged at 4.2% and 3.3%, respectively. 

The BoJ held its policy rate at 1.00% in an 8-1 vote and revised its growth forecasts marginally higher, while its inflation forecasts were little changed, after accounting for the effects of government policy measures.

The BoJ’s outlook and guidance from Governor Ueda at the press conference remained consistent with further policy tightening. Governor Ueda did not provide a strong signal on the timing of the next rate hike, though he left the door open for a move at the next meeting in September.

The market now sees around a 40% chance of a hike in September, up from around 20% prior to the decision.

Our base case is that the Bank of Japan will hike next in October, although JPY weakness does tilt the risks towards a hike as soon as September, notwithstanding recent FX intervention, which is unlikely to have an enduring impact.

Is The Correction Over? The 2000 Playbook Says No, Lance Roberts, The Bull Bear Report extract

The question every investor wants answered is: Is it safe to head back into momentum stocks?

BTIG’s Jonathan Krinsky suggested the momentum crash may have run its course, and Thursday’s rebound lends some support to that view. Goldman’s high-minus-low momentum index had fallen -23% below its 200-day moving average after sitting 40% above it in mid-June.

Over the past 25 years, the index has rarely remained more than -20% below its 200-day average for long. Such an extreme dislocation was always likely to produce a relief rally, with Microsoft’s earnings providing the catalyst for buyers to return.

A relief rally, however, should not be confused with a market bottom.

Krinsky’s comparison with the dot-com era is perhaps the more valuable takeaway. One month after the technology bubble peaked in 2000, the Philadelphia Semiconductor Index (SOX) had fallen -35%. It then rallied around 37%, only to later retest its 200-day moving average.

As of Thursday, semiconductor stocks had fallen -23% from their June peak and were trading -11% below the 50-day moving average, yet remained more than 25% above the 200-day average.

That is an important distinction. Even after one of the fastest momentum corrections on record, the sector is still trading well above its long-term trend.

Investors who bought near the highs are unlikely to sell during the initial decline. More often, they use the first meaningful rally to reduce positions as prices recover.

What Should Investors Do Now?

With August and September historically weaker months for equities, the recent rebound should be viewed as an opportunity to reposition portfolios rather than increase risk.

The forced liquidation that drove much of the selling appears to have passed, but that does not eliminate downside risks.

Large institutional investors still hold sizeable positions and may continue to reduce exposure into strength.

Meanwhile, bond markets remain an important variable. If long-term yields continue pushing higher, it would likely place further pressure on AI-related growth stocks and other long-duration assets.

That said, opportunities are emerging.

The recent correction has created a clear distinction between companies already generating tangible returns from AI investment and those still relying on future expectations.

Microsoft and Amazon have both recovered to trade above their momentum highs, reflecting investor confidence in their ability to monetise AI spending.

By contrast, many companies involved in building, supplying or financing AI infrastructure remain between -10% and -47% below recent highs.

This creates two broad investment themes. More highly leveraged companies have already experienced significant selling, meaning the focus shifts from valuation to balance sheet strength and financial resilience.

Meanwhile, infrastructure builders and suppliers may offer attractive opportunities where contracted revenue is being overlooked amid depressed share prices.

The current environment still appears consistent with a tradable rally rather than the beginning of a sustained bull market, particularly if bond yields continue to rise. If that assessment proves too cautious, the cost is simply buying higher-quality companies earlier than necessary.

For now, the strategy remains unchanged: use periods of market strength to upgrade portfolio quality, reduce exposure to companies whose investment case relied primarily on momentum, and retain sufficient cash to take advantage of any retest of support levels.

Is Warsh all talk and no walk…?! Mark Dowding, RBC BlueBay Asset Management extract

The outcome of last week’s FOMC meeting, with rates on hold but three dissenters calling for a hike, did not come as much of a surprise to financial market participants, with markets little changed in the wake of the initial policy announcement. 

However, the yield curve subsequently bear steepened as new Fed Chair Kevin Warsh delivered a weak performance at the following press conference, in which he sought to talk tough on inflation, without offering any clear explanation as to why the Fed chose not to hike at this meeting, if growth is as strong as he describes and inflation is something that needs to be decisively addressed. 

Indeed, in suggesting that rising bond yields are doing the Fed’s policy tightening job on its behalf, this gave a sense of abrogation of responsibility and the lack of a clear plan to bring inflation down, in the absence of decisive leadership.  

In eschewing forward guidance, Warsh may thus learn that markets may be more at risk of losing confidence in the Fed. In this respect, the prior forward guidance era under previous Fed Chairs has seen the institution afforded high levels of trust and credibility.

But in more of an information vacuum, doubts may become elevated and trust in the Fed may start to erode.

Of course, Warsh could rebut that the most important task is that the Fed delivers its mandate and is judged on its results, noting how, under prior leadership, inflation has overshot the central bank’s target for the past 64 months.

In this regard, real economy outcomes are more important than pandering to the needs of fickle financial market participants. 

However, at a time when US debt levels are at record levels and continue to grow at an alarming rate, thus being too laissez faire with respect to market outcomes could well be an approach that embeds a high degree of risk, should market confidence be suddenly lost.

Nevertheless, notwithstanding the fact that US long-dated yields are at a 20-year high, we are still a long way from such a bearish situation. Moreover, the fact remains that the FOMC is very likely to hike rates by 25bps at its next meeting in September. 

Following last month’s more benign inflation print, higher oil prices infer that the next couple of months are likely to see a renewed pick-up in price data, and it seems probable that by September, a decision to raise interest rates could well be made on a unanimous basis. 

That said, the fact that there is no forward guidance may well mean that there remains some speculation of a dovish Fed wanting to hold, whereas frustrated hawks could even look to dissent with a vote in favour of a 50bps hike.

We continue to hold no strong view on the outlook for Treasuries at this point, with risks appearing very much two-way in nature. However, we have continued to highlight value in inflation-linked bonds and swaps on the view that realised inflation in the US is likely to stay elevated for longer than is discounted in financial market pricing. 

Recent events in the Middle East remain consistent with ongoing disruption to trade through the Strait of Hormuz for some time yet to come, and with respect to oil products, even if crude oil prices decline, we see no quick reversal in crack spreads and this means that energy prices will remain elevated. 

The AI gold rush is also continuing to drive up prices, as exemplified in the skyrocketing profits and margin growth for the manufacturers of silicon chips. Although these factors may abate in the course of time, it still means that for the foreseeable future, so inflation risks lie more to the upside than the downside. 

In this respect there may be little that the Fed Chair can actually do to deliver on his promise to re-anchor price stability and failure to make any tangible progress in this direction over the next several months could well come to weigh further on his credibility.

Corporate news in Australia:

• HSBC has agreed to sell its $36bn Australian loan portfolio to Blackstone, with acquisition debt financing provided by lenders including ANZ Banking Group ((ANZ)) and National Australia Bank ((NAB))
• Pinnacle Investment Management Group ((PNI)) is exploring a takeover bid for Bennelong Funds Management
• Forrestania Resources’ takeover bid for Zenith Minerals ((ZNC)) is facing scrutiny following a shareholder complaint to the Takeovers Panel
• FIFA has abandoned plans to sell a stake in future FIFA World Cup profits to private equity investors following industry backlash
• One Stop Warehouse has appointed MA Moelis Australia to source a minority investor to help fund its global expansion

On the calendar today:

-NZ June Bldg permits

-AU NSW Public Holiday

-US July ISM Mfg

-PREMIER INVESTMENTS LIMITED ((PMV)) ex-div 45.00c (100%)

-VISTA GROUP INTERNATIONAL LIMITED ((VGL)) FY26 earnings report

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

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