Warsh finally spoke, and markets didn't love what they heard. September hike odds closed near 60%, up from a third the day before.

The S&P 500 slipped 0.25%, the Nasdaq fell 0.52%, the Dow finished flat. Small caps and gold took the real damage.

Bessent hosts the G20 today. Broadcom Wednesday. Payrolls Friday. And Tim Cook clocks out at Apple.

Today:

📰 Warsh talks tough at Jackson Hole, September hike odds hit 60%
👑 Why cash at 4.36% isn't the easy call it looks like
🍎 Tim Cook's last day at Apple
🤖 OpenAI cuts off Cursor after SpaceX's $60 billion buyout

Let's get into it.

This is not financial advice. Always do your own research. Past performance doesn’t guarantee future results.

Friday punished income. After Fed Chairman Kevin Warsh signaled the inflation fight isn't finished, the two-year Treasury yield jumped 12 basis points to 4.36% and rate-sensitive payers sold off, with utilities, telecom, and REITs leading the decline. The question that follows is a fair one: why hold a 3% dividend when a government bond pays 4.36%?

One answer is that the coupon stays where it is and the dividend doesn't. Fewer than 60 US companies have raised their dividend every year for 50 years or more. Coca-Cola has done it 64 years running, lifting the quarterly payout about 4% to $0.53 from $0.51 this February, or $2.12 a year against $2.04 in 2025. Emerson Electric and American States Water are pushing 70 years. Those streaks held through the 1970s stagflation, double-digit rates in the 1980s, 2008, and COVID.

The math is worth walking through. Buy at $100 yielding 3%, so $3 a year, and grow the payout 6% annually. Year 20 pays $9.62, or 9.6% a year on the original cost while the bond still pays 4.36%. Year 30 pays $17.23, a 17.2% yield on cost. That calculation sets the share price aside entirely and looks only at the income. With lifespans stretching and retirements running 30 years or longer, that compounding window is wider than the traditional math assumed.

Streaks do break. 3M lost its King status in 2024 after cutting the dividend, and Kings skew toward slow-growth staples that won't keep pace with semis or robotics in a rally.

If you're decades out, a rate-driven selloff in dividend payers offers a higher starting yield on a payout that has room to climb, which is where the yield-on-cost math starts working. If you need the income sooner, a 4.36% two-year is a reasonable place to park it. Either way, the business matters more than the streak.

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US stocks slipped Friday after Fed Chairman Kevin Warsh used his first Jackson Hole keynote to signal the inflation fight isn't finished, reversing an early rally and sending rate-hike bets sharply higher.

Warsh gave markets no forward guidance but plenty of signal. He told the Jackson Hole audience that inflation remains too high and that current policy is not particularly restrictive. The bond market repriced immediately: the CME FedWatch tool showed a 60% chance of a September hike by Friday afternoon, up from 35% the day before. The two-year yield jumped 12 basis points to 4.36%, its sharpest one-day move in more than two months. Gold took the other side of that trade, tumbling 2.88% to $4,529.90 as yields and the dollar climbed. Not everyone read it as settled. "Today's speech rightly erred on the hawkish side of the ledger," BlackRock's Rick Rieder said, noting that more employment and inflation data land before the meeting. Small caps took the worst of it, with the Russell 2000 down 1.39% on higher borrowing costs.

Treasury Secretary Scott Bessent hosts G20 finance ministers and central bank governors in Asheville, North Carolina, Monday and Tuesday, and the agenda is stacked. He is pressing the group to shrink global trade imbalances and sever business ties to Iran, while calming nerves about US debt. The Strait of Hormuz remains closed, draining growth from nearly every economy at the table. Bessent imposed curbs Friday on an Egyptian bank over Iran links through its UAE branches. He is also managing a bond market that pushed 30-year yields to 19-year highs this month before he doubled scheduled Treasury buybacks to $4 billion per operation.

The Canada trade fight keeps escalating, and the polling has turned against it. About 58.7% of Americans now disapprove of President Trump's approach to trade, against 34.5% who approve, a swing of more than 18 points since the start of his second term. Canadians are digging in: 76% told Angus Reid their government was right to walk away from talks. Meanwhile the administration is weighing a new 7.5% tariff on China over overcapacity ahead of a late-September meeting with President Xi Jinping, on top of an effective 26% statutory rate. Raymond James told clients the US "has not yet reached 'peak tariff.'"

Tim Cook hands Apple to John Ternus tomorrow after 15 years, with Cook moving to executive chairman. Cook took the market cap from roughly $350 billion to between $4 trillion and $5 trillion and built the services business into the company's profit engine. Ternus inherits a company that sat out the LLM land grab and a September 9 launch event already on the calendar.

Caterpillar posted record quarterly revenue of $20.5 billion, with power-generation sales spiking 72% to $3.10 billion on data center demand. CEO Joe Creed said "no one is slowing down" on AI infrastructure. The company is putting $100 million over five years into training its 118,000 workers in AI, autonomy, and robotics, drawing on 1.6 million connected machines and 16 petabytes of data.

Friday's August jobs report is the week's main event, with economists expecting 58,000 jobs added and unemployment at 4.1% after July's 23,000-job decline. Broadcom, Snowflake, and HPE report Wednesday, Palo Alto and Dell Tuesday, Lululemon and DocuSign Thursday. JOLTS and ISM manufacturing land Tuesday.

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Cheers,
Brandon & Blake of Invested Inc