The Monday Report – 31 August 2026

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This story features KIP MCGRATH EDUCATION CENTRES LIMITED, and other companies.
For more info SHARE ANALYSIS: KME

US markets trimmed weekly gains on Friday, with Federal Reserve Chair Kevin Warsh reiterating a commitment to the 2% inflation target.

After a positive week for the Australian market, the August reporting season wraps up today.

ASX200 futures are pointing to a weaker start as spring unfolds.

Good Morning,

The Australian market rallied on Friday, up 54 points or 0.6% to 9,092. Technology led the rally, up 2.3%, with Property the loser down -0.8%.

The ASX200 rose 0.32% last week, bringing the month’s gain to 1.38%, although it might not have been evident in many stock portfolios. 

Last week, the Gold index, Metals & Mining, Materials and Consumer Staples were the stand out sectors.

A-REITs, Real Estate, and Communication Services performed all negatively.

Today is the last day of the August reporting season.

Check out the FNArena Calendar https://fnarena.com/index.php/financial-news/calendar/

Today’s scheduled results releases includes those by Australian Finance Group ((AFG)), Austal ((ASB)) and Mesoblast ((MSB)), among many more smaller cap companies.

Moelis on Intelligent Monitoring Group ((IMB)):

“IMB enters FY27 with strong momentum across its core Australian operations and an expanded platform following the Wormald NZ and Red Wolf acquisitions, while management is focused on accelerating organic growth through conversion of the commercial pipeline, further scaling ADT Guard and remote video monitoring, and improving New Zealand performance.

“The probability-weighted commercial security pipeline increased to $72.4m by 4Q26 from $36.6m in 1Q26, while Video Guard sites rose to 1,029, providing improved visibility into future revenue and supporting continued growth in higher-value security and fire services. Management also expects FY27 and FY28 to be significant headline growth years as the acquired businesses contribute more fully and, subject to completion, ADT UK adds a second major geography and platform for longer-term expansion. 

“The ADT UK acquisition will initially place significant debt obligations onto IMB’s balance sheet, however, we expect the business can generate ~$20m-$25m of FCF in FY28/29, which will reduce gearing over the medium-term. We retain a Buy rating and our Target Price moves to $1.12 p/s (prev: $1.19 p/s).”

RBC Capital on Virgin Australia ((VGN)):

“Virgin (VGN) delivered a solid FY26 result with uPBT of $579m (+5%/+4% to RBCe/Cons) and a maiden ff dividend of 7.6cps. 1H27 guidance was also incrementally positive, with a “broadly in line” uEBIT (yoy) expected, with ‘strong’ demand and forward bookings offsetting higher jet fuel costs.

“While fundamentally a solid result, the overhang of next week’s Bain Capital escrow expiry looms large. Any major selldown is a positive liquidity event, and with the removal of the overhang we would expect the stock to re-rate thereafter. Remain Outperform rated.”

Don’t forget the FNArena corporate results monitor to track the earnings reports.

https://fnarena.com/index.php/reporting_season/

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

Warsh Puts A September Increase In Play

Warsh said this summer’s better inflation numbers don’t convince him prices are really cooling.

He added that borrowing still looks too easy, which is how a Fed chairman says rates aren’t high enough yet.

Traders moved fast, taking the odds of a September hike from about one in three on Thursday to better than a coin flip by midday.

He didn’t promise anything, and he doesn’t plan to.

Marvell Shows How High The AI Bar Is

Marvell Technology $MRVL beat on sales and profit and lifted its 2028 revenue outlook to about US$18 billion from US$16.5 billion.

The stock fell anyway. Its margin forecast landed right where analysts already had it, and the company said almost nothing about the Google deal worth up to US$12.2 billion.

Bank of America, UBS and Citi kept their buy ratings, but beating estimates isn’t enough for an AI name right now.

Black Sea Attacks Push Grain To Multiyear Highs

Wheat at US$7.72 a bushel and corn at US$5.41 are the highest they’ve been since the summer of 2023.

Soybeans at US$12.79 are the highest since January 2024.

Fighting in the Black Sea has stopped almost all shipping out of the ports that handle most of Russia’s grain, and a bad US summer hurt the corn crop here.

Wheat has gone up by half this year, and food costs take months to show up in the inflation numbers Warsh is watching.

ANZ Bank, Australian Morning Focus

Data and events. Melbourne Institute inflation gauge out at 11am. Q2 business indicators, another set of GDP partials, out at 11:30am.

We expect the contribution of inventories to growth in Q2 to have been flat, while we expect company profits to rise 2.8% q/q. July private sector credit is out at 11:30am, which we expect to have slowed modestly to 0.7% m/m.

Rates. UST yields were higher following Warsh’s comments.

FX. The DXY ended the week higher following Warsh’s Jackson Hole speech.

Commodities. Expectations of a Fed rate hike are likely to weigh on investor demand for gold.

US equity markets were softer after hawkish comments by Warsh led to the market pricing near-term rate hikes more aggressively. The S&P500 closed -0.2% lower, whereas European bourses had been more positive, with the Euro Stoxx50 up 0.9% and the FTSE100 up 0.3%.

The yield on the US 10y Treasury note rose 4bp to 4.72%, with bigger moves higher in short-end yields: the 2y bond yield was up 11bp to 4.34%. In commodities, the active WTI future was up 0.3% to US$83.4/bbl, while gold fell -2.6% to US$4,455.1/oz.

University of Michigan consumer confidence rose from 51.0 to 51.7 in the final survey. Current conditions increased very slightly to 51.9, while expectations rose more strongly from 50.6 to 51.5. 1y-ahead inflation expectations eased slightly from 4.3% to 4.0%, while 5–10y-ahead inflation expectations were steady at 3.3%.

Warsh’s speech at Jackson Hole was interpreted as hawkish by the market, as he repeated his determination to get US inflation back down to the 2% target after five years of sitting persistently above it.

2y Treasury yields rose 11bp, and the market now sees a hike next month as more likely than not. Warsh has shored up his credibility, but markets will now be looking for him to walk the talk after not hiking in July and recently questioning whether the Fed’s preferred price gauge is still the most appropriate one.

As well as inflation concerns, bond markets are eyeing the untamed trajectory higher in US government debt, and Treasury Secretary Bessent’s recent move to buy back more long bonds was seen as addressing the symptom rather than the cause of the bond market’s disquiet.

Global Markets Call: Bull Market In stocks Despite Bear Markets In Bonds, Ed Yardeni & Toby Hearst, Yardeni Quicktakes extract

Bond yields are rising worldwide, but that’s not stopping the global bull market in stocks.

For now, investors are reading higher yields as a sign of economic growth rather than a threat to it, so the “Go Global” trade is still working.

South Korea and Taiwan are back at the top of August’s leaderboard after July’s shakeout. The AI-linked markets that led all year are leading again. The laggards are markets with domestic problems, not those exposed to the global business cycle.

Here’s more:

I. Global Interest Rates

Government bond yields continue to grab headlines. The UK and Australia are both above 5.00%, at 5.15% and 5.09%.

The US, at 4.73%, is toward the upper end of the 4.00%-5.00% range we call the “old normal.” Japan and Germany continue to rise, at 2.92% and 3.27%, respectively, both up steadily since February.

The long end is pricing a policy turn. Official rates are well below market yields across the major economies, with the RBA at 4.35%, the Fed and BoE both at 3.75%, and the ECB deposit rate at 2.25%.

Markets have shifted from pricing central bank rate cuts to pricing hikes in the coming months.

II. Foreign Exchange

Collectively, the three dollar indexes we monitor are showing a slight upward tilt so far this year.

The DXY touched a three-month low last week following the Treasury Department’s intervention in the long end of the Treasury market.

We remain in the constructive camp on the dollar. We aren’t buying the de-dollarisation story.

The dollar has been relatively stable against other developed-market currencies over the past year.

The dollar has been strengthening against emerging-market currencies for several years.

III. Global Stock Markets

South Korea and Taiwan are back at the head of the pack in the global stock market derby.

Korea leads the mtd rankings at 14.7% in dollar terms, and Taiwan is second at 11.8%. EMXC is up 6.5%, versus 4.8% for EEM, 3.1% for ACWX, and 3.0% for SPY (i.e., the US). The three biggest losers were the Philippines (-6.8%), Brazil (-3.0%), and China (-2.7%).

Forward revenues per share have been accelerating worldwide. Those of both the All Country World ex-US MSCI in local currency and the US MSCI have been rising more rapidly since late 2025.

Forward earnings have likewise been accelerating. Overseas earnings have kept pace with the US, both in dollar terms.

IV. Japan Focus

The yen is at 159.86 per dollar and has been drifting back toward its pre-intervention level, while the Nasdaq 100 has been moving sideways.

The inverse relationship between the two can be explained by the yen carry trade, which hasn’t unravelled so far.

Technology leads the FTSE Japan sectors ytd at 42.5%, with Financials second at 40.6%. The index is up 20.9%. Real Estate is the only sector down, at -8.2%.

V. Brazil Focus

Brazil is the clear outlier in terms of long bond yields. Its 10-year government bond yield is 14.70%, well above those of Colombia at 12.45% and Mexico at 9.21%, and roughly three times that of the US.

Brazil’s 14.70% 10-year bond yield is near the top of its range over the past two decades, exceeded only in 2008 and 2015-16. Both of those periods coincided with recessions.

The Brazil MSCI local currency index is near a record high, while the comparable dollar index is well below its 2008 peak.

Foreign investors have not been paid for two decades of local-currency gains.

VI. Sectors

Five sectors have triple-digit ytd gains in local currencies.

Taiwan Basic Materials leads at 169.6%, followed by Hong Kong Technology at 150.5%, Korea Technology at 136.6%, Telecommunications at 113.4%, and Taiwan Health Care at 102.6%.

Telecommunications and Energy are the broadest outperformers globally, up 35.0% and 34.4%, respectively, for the World index.

The Bull Bear Report, Druckenmiller Warning Lance Roberts, extract

If you look at the market headline, the bulls won this week. However, the internals told a different story, with the S&P500 closing Friday at 7,711.76, up 0.5% on the week, while the Nasdaq Composite added 0.9% to 26,402.42.

Yet under that placid surface, the average stock lost ground. The equal-weight S&P slipped -0.4% while the cap-weighted index rose, and the Russell2000 fell roughly -1.4%.

Notably, only three of the eleven sectors finished green.

Nvidia did the heavy lifting. Its blowout Wednesday-night report and a forecast for 70% fiscal-2028 revenue growth sent the stock up nearly 9% on Thursday and dragged the index to a fresh record before Friday’s fade.

The entire tape is now leaning on the AI complex, and the AI complex is now leaning on one earnings call at a time. Communication Services, Technology, and Financials were the only sectors to advance. Health Care, Industrials, and Energy led the laggards.

However, the real story was in Wyoming as Fed Chair Kevin Warsh gave his first Jackson Hole address and refused to blink.

He said this summer’s better inflation prints do not tell him underlying trends have “meaningfully improved”, and he committed, in his words, to a discipline rather than a decision.

In other words, his rock-solid commitment to “no forward guidance” remained intact and provided no cover for a market pricing in cuts.

Beneath the equity calm, the bond market is anything but. The long end refuses to come down, with the 30-year sitting near 5.2%, not far from a 19-year high.

This is even after Treasury doubled its long-dated buyback lots to $4bn to steady the tape, starting September 4.

As we discuss more below, Stanley Druckenmiller used the pages of The Wall Street Journal this week to call that intervention “price management” and to remind Washington that the long bond is the only fiscal disciplinarian we have left.

Cross-asset performance told the same cautious tale. On Friday, gold fell -2.9% to roughly US$4,530 after its strongest month in decades, WTI held near US$83, and bitcoin slipped towards US$77,700 as its mid-month squeeze unwound.

This is a story about uncertainty over whether the Fed can successfully transmit its interest-rate signal back to the bond markets.

As I flagged two weeks ago in Record Highs: Should You Chase The Rally?, our money-flow breadth model had already pushed into extreme overbought territory and was signalling profit-taking, not chasing.

Nothing this week changed that message. Watch participation, not the index, as we head into next week’s jobs data.

TECHNICAL BACKDROP – MOMENTUM ROLLS OVER, WHAT NEXT?

As noted above, the market remains within a stone’s throw of previous highs, but underlying momentum is quietly rolling over.

The S&P500 finished the week at 7,711.76, about -1.1% below the record close of 7,796 set on August 13. The index sits 2.0% above its rising 50-DMA near 7,556 and a healthy 8.4% above its 200-DMA near 7,114, and the golden cross remains firmly intact.

When looking solely at the trend, it remains a bull market. However, a look at the underlying momentum shows cracks are appearing.

Specifically, the 14-day RSI closed at 56.6, down from 58.6 a week ago and well off the overbought readings that accompanied the mid-August record. That reading suggests a more neutral condition, not stretched, and it leaves room in either direction.

More telling is the MACD, where the signal line has rolled over; the MACD line at 41 is now sitting below its 51 signal, with a negative histogram.

Furthermore, the histogram is narrowing rather than widening, so this is a loss of upside thrust, not the start of a breakdown. Price at the highs on fading momentum is how most short pauses begin, and occasionally how larger ones do.

Overall, participation is the most important tell. As we detailed in Breadth Is Lacking: Is The Rally Sustainable?, a rally led by a shrinking group of names is weaker. This week proved it again.

The equal-weight index fell while the cap-weighted index rose, and small caps dropped -1.4%. When the generals advance without the troops, the advance is on borrowed time.

Heading into next week, this is how we would suggest approaching the market. The record close at 7,796 and the round 7,800 level are the resistance barriers.

If the markets can muster a decisive close above those levels, on strong breadth, that would reopen 7,900 and then 8,000.

Absent that, we will continue to treat rallies into 7,800 as a place to trim winners back to target weight, not to add.

On the downside, the first support is the recent swing low near 7,643, then the 50-DMA at 7,556.

Any break of the 50-DMA is the level that begins to turn the recent pause into something worth hedging with index puts or a raised cash buffer.

Our money-flow model already trimmed equity exposure towards target weight at the August highs, and we see no reason to reverse that currently.

Corporate news in Australia:

• MUFG has agreed to acquire superannuation administration platform Grow Inc from shareholders including HESTA, Five V Capital and AirTree Ventures
• Dental Boutique has hired Morgan Stanley to find a significant minority growth investor, with the 16-clinic dental chain valued at more than $500m
• Partners Group and Quadrant Private Equity are in early-stage talks to merge their Australian childcare businesses Guardian and Affinity
• Anchorage Capital Partners has reportedly agreed terms to acquire NRMA’s SIXT Australia car rental business
• Harvest Lane has lifted its stake in Kip McGrath Education Centres ((KME)) to almost 20% as Crimson Education pursues its takeover bid
• Rio Tinto ((RIO)) is seeking bids for its $300m Mt Cattlin lithium mine in Western Australia, with Develop Global ((DVP)), Delta Lithium ((DLI)) and Core Lithium ((CXO)) among potential buyers
• PDI Gold could face competition from B2Gold and Perseus Mining ((PRU)) in its pursuit of Turaco Gold ((TCG)) and the Afema gold project in Cote d’Ivoire, with Turaco valued at around $840m
• EQT and Bain Capital are competing to acquire Blackstone-owned Nucleus Networks in a Goldman Sachs-run auction valuing the business at more than $1bn
• Blue Owl and PIMCO are leading a US$2.4bn financing package for IREN ((IREN)) to fund Nvidia GPU purchases for its Canadian data centre project
• Firmus is renewing efforts to recruit retail brokers ahead of a potential October IPO, following a $2.9bn private placement that valued the Australian AI infrastructure company at $15.5bn
• Excelsior Capital ((ECL)) has delayed its planned ASX delisting while it considers a third-party recapitalisation proposal

On the calendar today:

-NZ ANZ business confidence

-AU 2Q Company profits, inventories

-AU July Private Sector Credit

-JP July Industrial prod’n

-JP July Retail sales

-CH Aug PMI

-UK Public Holiday

-US Aug Dallas Fed mfg

-GE Aug CPI (prelim)

-GE Aug CPI (prelim)

-GE Aug CPI (prelim)

-GE Aug CPI (prelim)

-GE Aug CPI (prelim)

-GE Aug CPI prelim

-AUSTRALIAN FINANCE GROUP LIMITED ((AFG)) ex-div 4.80c (100%)

-ANSELL LIMITED ((ANN)) ex-div 58.08c

-AUSTAL LIMITED ((ASB)) FY26 earnings report

-ATLAS PEARLS LIMITED ((ATP)) ex-div 0.45c (100%)

-AURIZON HOLDINGS LIMITED ((AZJ)) ex-div 10.50c (90%)

-CARLTON INVESTMENTS LIMITED ((CIN)) ex-div 2.00c (100%)

-CARLTON INVESTMENTS LIMITED ((CIN)) ex-div 71.00c (100%)

-COG FINANCIAL SERVICES LIMITED ((COG)) ex-div 3.50c (100%)

-COUNT LIMITED ((CUP)) ex-div 3.00c (100%)

-ELEVRA LITHIUM LIMITED ((ELV)) FY26 earnings report

-EMERALD RESOURCES NL ((EMR)) FY26 earnings report

-EVT LIMITED ((EVT)) FY26 earnings report

-GENESIS MINERALS LIMITED ((GMD)) FY26 earnings report

-GR ENGINEERING SERVICES LIMITED ((GNG)) ex-div 13.00c (100%)

-HUMM GROUP LIMITED ((HUM)) ex-div 0.50c (100%)

-ILUKA RESOURCES LIMITED ((ILU)) ex-div 3.00c (100%)

-LIONTOWN LIMITED ((LTR)) FY26 earnings report

-MA CREDIT INCOME TRUST ((MA1)) ex-div 1.49c

-METRICS INCOME OPPORTUNITIES TRUST ((MOT)) ex-div 1.14c

-METRICS REAL ESTATE MULTI-STRATEGY FUND ((MRE)) ex-div 0.92c

-MESOBLAST LIMITED ((MSB)) FY26 earnings report

-MITCHELL SERVICES LIMITED ((MSV)) ex-div 2.00c (100%)

-METRICS MASTER INCOME TRUST ((MXT)) ex-div 1.46c

-PENGANA INTERNATIONAL EQUITIES LIMITED REGISTERED ((PIA)) ex-div 1.40c (100%)

-PINNACLE INVESTMENT MANAGEMENT GROUP LIMITED ((PNI)) ex-div 31.00c (65%)

-TABCORP HOLDINGS LIMITED ((TAH)) ex-div 1.50c

-VAULT MINERALS LIMITED ((VAU)) FY26 earnings report

-WAGNERS HOLDING CO. LIMITED ((WGN)) ex-div 5.00c (100%)

-WAYPOINT REIT LIMITED ((WPR)) 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…

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