Good morning. The war between the United States and Iran escalated over the weekend. Iranian strikes on the Muwaffaq Salti air base in Jordan killed two US service members and left one missing, the first US deaths from Iranian fire since March, and President Trump ordered new airstrikes from late Saturday aimed at Revolutionary Guard forces and at protecting shipping in the Strait of Hormuz. Bahrain, Qatar, Kuwait, Oman and Jordan all reported incoming attacks, and Kuwait said a power and desalination plant was hit. Oil had already moved before the weekend: Brent rose 4.6 per cent on Friday to US$88.10 a barrel and is up 15.9 per cent over five sessions.
The other thread is the AI trade. Wall Street closed the week lower on Friday, the S&P 500 down 1.0 per cent at 7,458 and the Nasdaq down 1.4 per cent at 25,520, taking their falls for the week to 1.6 and 2.9 per cent, after Chinese startup Moonshot released Kimi K3, an open-weight model it says closes much of the gap with the leading US systems. The Philadelphia semiconductor index ended the week in a bear market, down more than 20 per cent from its late-June record, Tokyo's Nikkei fell 4.0 per cent on Friday, Shanghai lost 3.0 per cent and the VIX rose 12.2 per cent to 18.77. Results from Alphabet, Tesla and Intel this week will show whether the earnings behind the AI build-out are holding up, and the Federal Reserve meets on 28 and 29 July after chair Kevin Warsh told Congress the committee has no tolerance for persistently elevated inflation.
Locally, the corporate regulator dominated a weekend that was otherwise quiet for company news ahead of the results season. ASIC's penalty haul for FY26 reached a record $830 million, the Australian Financial Review reported, led by ANZ's $250 million penalty, with Macquarie and Netwealth paying $321 million and $101 million in remediation to investors in collapsed funds. The ASX 200 closed Friday down 0.5 per cent at 8,797, the Australian dollar buys US69.70 cents and the 10-year government bond yields 4.91 per cent. There is no major local data today; the June-quarter CPI lands next Wednesday, 29 July.
The ASX 200 closed the prior session down 0.5 per cent at 8,797, leaving it 0.1 per cent lower over five sessions. The Australian dollar fell 0.4 per cent to US69.70 cents and the 10-year government bond yield sits at 4.91 per cent, up 53 basis points over the past year, with the RBA cash rate at 4.35 per cent. Iron ore was little changed at US$98.88 a tonne, up 0.1 per cent.
Wall Street closed the week lower on Friday. The S&P 500 fell 1.0 per cent to 7,458 and the Nasdaq 1.4 per cent to 25,520, taking their five-session falls to 1.6 per cent and 2.9 per cent, while the Dow lost 0.8 per cent to 52,146. Chipmakers led the selling on concerns AI hyperscalers may slow infrastructure spending, with Nvidia down 2.2 per cent and Intel down 2 per cent, and the VIX rose 12.2 per cent to 18.77. The 10-year Treasury yield eased 3 basis points to 4.54 per cent, the 2-year rose 3 basis points to 4.16 per cent, and the US dollar index was flat at 100.75.
The Stoxx 600 fell 0.3 per cent to 642 and the DAX 0.3 per cent to 24,831, while the FTSE 100 rose 0.3 per cent to 10,600. Chipmakers drove the declines as the global tech selloff spread, with ASML down 3.9 per cent, Infineon down 4.8 per cent and STMicroelectronics down 5.8 per cent, while utilities and consumer staples closed higher.
The Nikkei 225 fell 4.0 per cent to 64,141 on Friday, taking its five-session fall to 6.4 per cent and leaving it more than 11 per cent below its June record. The Shanghai Composite lost 3.0 per cent to 3,764 and the Hang Seng 1.8 per cent to 24,562. China's STAR Market, home to many of the country's chip stocks, has fallen about 25 per cent from its 1 July peak, wiping out more than 4 trillion yuan (about US$590 billion) of value, Reuters reported. The yen sits at 162.41 per US dollar.
In the December half of 2025 alone ASIC secured a record $349.8 million in civil penalties and returned $583 million to consumers; chair Joe Longo said the regulator is 'protecting Australians and safeguarding trust and confidence in Australia's financial system'.
The rejection comes as the Commonwealth pursues its own budget repair; the AFR reported last week that the federal budget position relies on cutting 41,200 public service jobs.
The findings follow the OECD's warning this month that Australian real wages are set to fall further this year after a sharp decline in living standards.
Iron ore is little changed at US$98.88 a tonne and the RBA cash rate remains 4.35 per cent, unchanged over five sessions.
The paper separately reported industry warnings that a green-energy mandate on new data centres could stall construction.
The AFR also carried calls, including on its own commentary pages, for a broader inquiry into how commodity benchmark prices are set.
The escalation follows the United States revoking Iran's oil-sales waiver earlier this month, a move that sent Brent up 5.4 per cent in a single session.
The change was announced Sunday and applies to actions brought in Victorian courts.
US Central Command said the strikes aim to degrade Iran's ability to threaten shipping in the Strait of Hormuz, through which about 20 per cent of the world's oil passes; Bahrain, Qatar, Kuwait, Oman and Jordan reported incoming attacks, and Brent closed Friday up 4.6 per cent at US$88.10, up 15.9 per cent over five sessions.
China's STAR Market has fallen about 25 per cent from its 1 July peak, wiping out more than 4 trillion yuan (about US$590 billion) of value, Reuters reported; the Nasdaq fell 2.9 per cent for the week and the Nikkei 6.4 per cent.
Fed funds futures on Friday implied about a 73 per cent chance of a rate rise by December, up from roughly an even chance at the start of the month, as the oil surge lifted inflation risk.
Bloomberg reported the allegations put the trade truce and a planned Washington summit with Xi Jinping within two months at risk; China's foreign ministry called the accusations 'pure fabrication'.
The report lands as the bloc weighs its next package against a backdrop of higher energy prices, with Brent at US$88.10 a barrel.
The changes arrive ahead of the Fed's 28-29 July meeting, at which policy is expected to stay on hold.
The decision holds the previous government's policy in place even as Brent trades near a 12-month high, up 26.7 per cent over the year.
The survey comes four months before the US midterm elections in November.
Copper eased 0.5 per cent to US$13,812 a tonne, and the VIX rose 12.2 per cent to 18.77, up 24.9 per cent over five sessions.
The rush comes with Bitcoin at US$64,492, down 45.3 per cent over the past 12 months.
The Australian Financial Review put ASIC's full FY26 penalty haul at a record $830 million, after a record $349.8 million in court-ordered civil penalties in the December half of 2025.
The payments were the largest components of $583 million returned to Australians in the December half, which also included $161 million in refunds of excessive bank fees.
Telstra is already before parliament this month: chief executive Vicki Brady and chief financial officer Michael Ackland are due to front a Senate inquiry over the national network outage that disrupted Triple Zero calls.
FY27 copper guidance of 1.65 to 1.8 million tonnes implies a step-down of more than 150,000 tonnes from the 1.95 million tonnes produced in FY26.
The penalty formed part of ASIC's record $349.8 million in civil penalties for the December half of 2025.
The order sits within the FY26 enforcement year the Australian Financial Review reports produced about $830 million in penalties.
ASIC said the failures affected member claims over an extended period; the penalty was among the largest against a super fund in the December-half tally.
The Federal Court split the penalties $156.7 million, $114.1 million and $29.4 million for systemic unconscionable conduct; investors lost about $83 million.
Small-cap and resources strategies dominated the year's performance leaderboards across the major surveys.
Acorn Capital's NextGen Resources Fund returned 31 per cent, following 28.45 per cent in FY25, for a second straight year in the top 10.
Astral's resource base stands at 2.07 million ounces after an April upgrade, with a final investment decision to follow the study and first gold targeted for early 2028.
Spartan's Never Never and Pepper deposits host a combined underground resource of 2.32 million ounces at 9.32 grams a tonne.
Pope said production will step from 47 to 52 a month once the current rate is stable; the company separately told the Financial Times it will be ready to fund an all-new aircraft programme by 2030, and Reuters reported the new Air Force One remains on track for 2028 delivery with costs rising.
The company lifted full-year US-dollar revenue growth guidance to slightly above 40 per cent and capital spending guidance to US$60 billion to US$64 billion; the stock was nonetheless caught in Friday's global chip selloff.
Premium large formats contributed 53 per cent of the domestic result for Comcast-owned Universal, with IMAX screens selling US$51.8 million of tickets, and the debut ranks as the third-largest opening of 2026.
The world's fourth-largest DRAM maker behind Samsung, SK Hynix and Micron is set to list on the STAR Market on 27 July; the retail tranche was about 244 times covered.
It is the largest open-weight model released to date, and its debut set off Friday's global selloff in chip and AI stocks.
Lores, who took over in March, had previously told analysts the company's three businesses were stronger together.
American earned US$111 million last year against Delta's roughly US$5 billion and United's more than US$3 billion.
The company also sold twice as many balls as in Qatar and is targeting a larger US business off the tournament.
The dispute comes after the UK government took British Steel into public ownership earlier this year.
The claim opens a legal front over the takeover, which accompanied May's return to growth for the UK economy at 0.1 per cent.
The paper separately detailed the rivalry between founders Tarek Mansour and Shayne Coplan as the two platforms compete for the US event-contracts market.
The claim centres on Wired's reporting on the use of surveillance technology at MSG venues.
The milestone follows the company's guidance upgrade last week, made after second-quarter orders rose 17 per cent and revenue increased 24 per cent.
“The members of the FOMC have no tolerance for persistently elevated inflation and share a resolute commitment to restoring price stability.”
“Degrade Iran's ability to threaten commercial shipping in the Strait of Hormuz and punish Islamic Revolutionary Guard Corps forces who launched attacks against American service members in Jordan.”
“ASIC has secured record penalties in response to serious misconduct, and is protecting Australians and safeguarding trust and confidence in Australia's financial system.”
“The latest development is the competition from open source models in China, which raised some competitive fears. Supposedly, there are some offerings that are rivaling the performance of Anthropic and OpenAI.”
“I've got the team focused on stabilising at 47. Once we get to 47, we'll go to 52, and then we'll just keep studying that.”
“In the US, our competitor has been much, much, much stronger than us. So the plan is to be more American.”
For wholesale clients only. Prepared by Arc Point OCIO Pty Ltd (ACN 693 569 765), Corporate Authorised Representative (CAR 1319046) of Capella Advisory (AFSL 550125), for wholesale clients within the meaning of the Corporations Act 2001 (Cth); it is not intended for, and should not be relied on by, retail clients. This note is factual market reporting and general information, with any arcpoint view clearly labelled as such. It is not personal advice and does not take into account any person's objectives, financial situation or needs. Information is drawn from sources believed to be reliable but its accuracy and completeness are not guaranteed. Past performance is not a reliable indicator of future performance.
Sources: Yahoo Finance, FRED, RBA, company filings.