Equity markets were mixed last week as investors weighed sticky inflation, fresh tariff shocks and artificial intelligence (AI) momentum. In Australia, the ASX 200 rose modestly, supported by strength in materials, energy and real estate. Globally, US Federal Reserve Chair Jerome Powell’s comments on potential rate cuts balanced geopolitical and trade concerns, while NVIDIA’s (NASDAQ: NVDA) earnings reassured investors on AI-driven growth. With inflation pressures persisting and policy risks elevated, we continue to emphasise structural growth, disciplined capital allocation and exposure to companies positioned for long-term resilience.
Market Updates
The S&P/ASX 200 Accumulation Index rose 0.2% last week, lifted by gains in materials (+2.6%), energy (+1.3%) and REITs (+0.4%). The Small Ordinaries Index was up 3.2%.
Australia’s inflation rebounded in July, rising 2.8% annually from 1.9% in June and above the expected 2.3%. The increase was driven by higher electricity prices following the expiry of government rebates. With inflation at the top of the RBA’s 2-3% target range, expectations of a September rate cut were diminished. The government also announced first-home buyers will gain earlier access to the 5% deposit scheme, now starting in October 2025 instead of January 2026.
Australia Post suspended parcel deliveries to the US after new tariff rules removed the duty-free threshold for packages under US$800.
In the US, the S&P 500 and the Small Cap 600 declined 0.1% and 0.3% respectively on light trading volumes ahead of the Labor Day holiday (today, 1 September). Concerns over the independence of the US Federal Reserve, tariff uncertainty, the sustainability of France’s national debt and the Russia-Ukraine conflict weighed on sentiment, with the MSCI World Index (AUD) declining 1.2%.
NVIDIA’s anticipated earnings exceeded forecasts, though the stock eased in subsequent days. The result reassured investors about the AI-driven rally that has lifted markets this year. Meanwhile, Chinese chipmakers announced plans to triple AI chip output by 2026.
US President Donald Trump fired Fed Governor Lisa Cook over alleged mortgage fraud. Cook has launched legal action to block the move. Trump also imposed a 50% tariff on most goods imported from India, whose economy grew 7.8% over the past year. The tariffs are expected to subtract up to 0.9% off India’s future growth. Trump further warned of 200% tariffs on Chinese goods if Beijing restricts exports of rare earth magnets, critical inputs for electronics and semiconductors.
This week, Australia will release Q2 GDP (forecast +0.5%), along with July trade, building approvals and household spending data. August jobs figures will be closely watched for signs of ongoing weakness. In China, PMI results will show the impact of recent economic support measures.
Stock Watch
NextDC (ASX: NXT)
Last week, data centre operator NextDC reported a solid FY2025 result with revenue and EBITDA growing 6% year on year. The company eased funding concerns by outlining its debt capacity and a shift to a more capital-light model. The bigger story is the outlook: billing utilisation is ramping faster than expected, suggesting potential upgrades to consensus forecasts. We built our position in NextDC earlier in the year when the stock was oversold on AI and equity raise concerns. With new joint ventures and debt funding reducing equity raise risks and demand for AI and cloud driving strong growth, we see NextDC well positioned as a critical enabler with further opportunities for major contract wins.
Held in: WAM Leaders (ASX: WLE), WAM Income Maximiser (ASX: WMX) and Wilson Asset Management Leaders Fund
Autosports Group (ASX: ASG)
Autosports Group is a leading Australian luxury automotive retailer, operating dealerships across premium brands and expanding into emerging electric vehicle (EV) brands. The company recently reported its FY2025 result, showing improving second-half profit margins that delivered a 36% sequential uplift in underlying profit before tax half on half. Management highlighted favourable new vehicle market conditions and higher revenues through existing dealerships, led by stronger luxury demand. We expect this trend to continue as declining interest rates leave consumers with more disposable income and increase vehicle financing uptake. Three strategic acquisitions have added further scale, while greenfield investments in EV brands Polestar and Zeekr provide additional upside. Autosports Group is well positioned with the right brand mix and a leaner cost base to benefit from more resilient industry conditions.
Held in: WAM Capital (ASX: WAM), WAM Microcap (ASX: WMI), WAM Research (ASX: WAX) and Wilson Asset Management Founders Fund
TransUnion (NYSE: TRU)
TransUnion is a leading credit bureau providing consumer credit reports and scores and has expanded into a global data and analytics company offering solutions for marketing, fraud and risk management across multiple industries. In the US, the company benefits from a consolidated industry structure, operating as one of the three major credit bureaus, a dynamic that supports attractive profit margins and returns. TransUnion is benefiting from an improving market backdrop and strong early results from new solutions in areas such as communications and marketing, supported by enhanced go-to-market activities. Future interest rate cuts should serve as a positive catalyst, supporting consumer appetite for credit and mortgage volumes and driving earnings higher.
Held in: WAM Global (ASX: WGB)
Velocity Frequent Flyer (ICG Australian Senior Loan Fund)
Velocity Frequent Flyer is Virgin Australia’s loyalty program, allowing members to earn and redeem points across flights, credit cards, retail partners and travel perks. It is Australia’s third largest loyalty program and the second largest frequent flyer program by membership. In April 2024, Velocity refinanced its capital structure via a $450m debt package, with WAM Alternative Assets’ investment partner ICG forming part of this facility. The business is underpinned by stable, predictable cashflows, with a capital-light model driving strong cash conversion and a long record of resilient margins across cycles, making it a defensive, cash-generative portfolio holding.
Held in: WAM Alternative Assets (ASX: WMA)
FY2025 Full Year Results and Webinars
We have announced the FY2025 Full Year Results for each of our listed investment companies. In case you missed any or would like to revisit, you can do so here.
Our FY2025 Full Year Results Q&A Webinars begin tomorrow. Register using the below links:
WAM Alternative Assets | Tuesday, 2 September 2025
WAM Strategic Value | Wednesday, 3 September 2025
WAM Leaders | Thursday, 4 September 2025
WAM Capital, WAM Microcap, WAM Research and WAM Active | Wednesday, 10 September 2025
WAM Global | Tuesday, 23 September 2025
Powell says rate cuts may be appropriate
The US economy is at an interesting juncture where wage inflation is elevated but the labour market appears to be softening. Usually, wage inflation slows when job creation slows, but this time seems to be a little different. A key reason is that labour supply is also softening. Unauthorised migration has declined sharply, reflecting tighter border controls. It remains an open question whether weaker labour demand outweighs weaker labour supply in terms of inflation impact.
Fed Chair Powell’s view is that if this debate is taking place, the labour market cannot be considered healthy, and is therefore prepared to cut rates. The risk is that easing too aggressively could allow inflation to pick up again making a rapid rate-cutting cycle unlikely. Bond yields have not fully priced in the possibility that inflation could rise again or that the Fed’s inflation-targeting credibility could be tested should it err towards excessive easing. For stocks, recent trends show that investors want to see outcomes involving lower rather than higher bond yields.
Upcoming Wilson Asset Management events
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WAM Alternative Assets (ASX: WMA) Meet The Manager We invite you to meet with Portfolio Manager Nick Kelly, Investment Analyst Jacob Grover and Investment Specialist Martyn McCathie for an exclusive in-person presentation on the WAM Alternative Assets investment portfolio, followed by a complimentary morning tea. The series begins in Brisbane this week, before moving to Adelaide, Sydney and Melbourne over the following fortnight. Secure your place now at one of the upcoming events below as places are limited: Brisbane | Wednesday, 3 September 2025 October Shareholder Presentations The Wilson Asset Management and Future Generation teams look forward to meeting with shareholders at our upcoming Shareholder Presentations in October. Meet the Wilson Asset Management investment team to hear their market outlook, high-conviction stock picks and discuss some of the key themes influencing the investment portfolios. Learn more about the Future Generation companies and how they invest for impact, delivering both investment and social returns for shareholders. Register using the following links: Newcastle | Thursday, 16 October 2025 |
Index Returns Performance Table
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