Fin-X Weekly Update 17th August 2026
- Brett Careedy
- Aug 17
- 5 min read
Global equities made fresh record highs but receded on Friday as benign US inflation was offset by signs of slowing consumer spending. Softer retail sales pared back expectations of a near-term US rate rise, though underlying price pressures persist. Oil prices climbed as US strategic reserves continued to decline and tensions between the US and Iran remain unresolved.
The RBA held rates steady but retained a clear hawkish bias, while financial shares fell on signs of a cooling mortgage market.
Nvidia unveiled a new infrastructure financing package in conjunction with major US institutions.
This week, attention turns to Australian July employment and earnings reports, the FOMC minutes, Chinese activity, and the flash PMIs.
Global equity sentiment remained upbeat last week after US inflation figures appeared relatively benign, despite ongoing upside risks. The S&P 500 and the MSCI AC World index reached new record highs on Thursday before dipping in Friday's session amid signs of slowing consumer activity.
Bond markets reacted positively to US CPI readings in line with forecasts and to producer price data that, on the surface, eased by more than anticipated. Annual consumer price inflation of +3.4% yoy was down from +3.5% in June, while headline producer prices rose +4.7% yoy, down from +5.5% yoy in June and the lowest reading since March. Beneath the surface, however, final demand less food, energy and trade services, the “supercore” PPI measure, rose +0.4% on the month, an acceleration from June's +0.1% that kept the annual rate at a still elevated +4.7%.
Expectations of a September US rate rise receded from a 44% probability a week earlier to roughly 30% by Friday's close after retail sales delivered a significant downside surprise. The miss was due in part to Amazon's Prime Day sales being pulled earlier into June this year. The headline advance estimate showed a -0.6% decline in July, against expectations of a +0.1% increase, though the annual increase held at a relatively healthy +6.0%.
In the BLS CPI report, energy prices fell -1.5% in July. Brent crude nonetheless rose towards US$90 per barrel last week as the Strategic Petroleum Reserve fell below 300 million barrels, according to the Department of Energy. With the minimum needed to operate the reserve safely at roughly 70 million barrels, oil stocks are in danger of becoming very stretched, and prices could rise significantly further if traffic through the Strait of Hormuz continues to be interrupted.
President Trump last week countered Tehran's calls for war reparations with sweeping demands of his own, including compensation for casualties from Iranian-backed conflicts and decades of protest crackdowns. Over the weekend, he remarked in a speech that the Strait of Hormuz would soon be US territory, though it is not clear whether he intended the comment to be taken seriously.
Although the Australian cash rate was kept at 4.35% in a unanimous decision at the RBA's meeting on Tuesday, the Monetary Policy Board discussed a rate increase, and the governor delivered a decidedly hawkish message at the press conference. Updated quarterly forecasts suggested inflation would return to the midpoint of the 2%-3% target range in mid-2028, despite a slightly higher assumed path for rates. With productivity revised sharply lower, the governor stressed that the board remains attentive to upside risks and will not hesitate to raise rates if the data justifies.
The governor also indicated that weakness in the housing market would not be a barrier to raising rates. Last Monday, Westpac revealed that mortgage applications had already fallen by -20% since the May budget, mainly due to a drop in investor demand, prompting a -6.8% fall in its share price over the week. CBA also fell -6.1% after reporting results that beat on profit and dividend but pointed to a slowing mortgage engine. The broader S&P/ASX 200 Banks index was down a more modest -3.8%. The Australian earnings season ramps up this week, with 86 S&P/ASX 300 companies set to report.
Earnings activity is slowing in the US, although Walmart and Target are both due to report this week.
Nvidia will not report until Thursday 27th, but drew attention last week as Chief Executive Jensen Huang revealed the next phase of AI infrastructure financing, backed by Wall Street banks and partly guaranteed by his own firm.
The first three-plus years of the artificial intelligence build-out have been funded through record amounts of equity and debt issued by the world's leading technology companies, some of which have turned cash flow negative. So far this year, Alphabet, Amazon, Meta, Microsoft and Oracle have together raised well over US$150 billion by selling debt and equity to build data centres, fund new AI models and support the rapid growth in AI agents. Intel also announced a US$15 billion stock offering, which it later upsized to US$20 billion.
Mr Huang called his plan a “big concept”, unveiling it on CNBC alongside leaders from Goldman Sachs, BlackRock, Blackstone, KKR, Apollo and Brookfield. Together, those firms say they are willing to raise US$500 billion from their clients, and potentially more, for the construction and build-out of new AI factories, though the details of the arrangements were not yet clear. Their joint press release said the companies had signed memoranda of understanding, but did not refer to any contracts, prompting scepticism from some analysts. Almost 11 months ago, Nvidia announced a partnership to invest up to US$100 billion in OpenAI as part of a plan to build data centres requiring a combined 10 gigawatts of power. That investment never materialised, though Nvidia contributed US$30 billion to the record-breaking funding round that OpenAI closed earlier this year.
Last Monday's announcement struck a different tone, with the companies collectively pushing the message that money will not be the constraint as the AI build-out approaches what McKinsey expects will be US$7 trillion in global outlays by the end of the decade. The announcement arrived just as Bank of America's AI EPS estimates ticked up again, suggesting recent rallies in AI stocks have fuelled by earnings growth.
Besides earnings reports, this week's main events include Chinese activity and Japanese GDP figures later today, the minutes from last month's divided FOMC meeting on Wednesday, and the latest S&P Global flash PMIs on Friday. Thursday's Australian employment report is anticipated to show unemployment holding at 4.4% in July.
Source: Bloomberg, BLS, Census Bureau, NAB, 15th August 2026
Source: Bloomberg, S&P Dow Jones, MSCI, FTSE Russell, 15th August 2026
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