Today’s News

The Big Picture

• 52,000 Victorian teachers to receive 28% pay rise. After 30,000 teachers walked off the job last month, the Victorian government will attempt to avoid further strikes with a 28% pay rise over four years. Teachers in Victoria are currently the worst-paid in the country, earning $13,000 less than their NSW counterparts at an entry level. (AFR)
  
  

• Global military spending hits record $4tn as arms race accelerates. 2025 marked the 11th consecutive year of increased military spending globally, driven by a 14% year-on-year increase by European countries. Asia also saw significant increases, with China (up 7%) and Japan (up 9%) both ramping up spending. (ABC)
  
  

• Yen strengthens as Japan holds rates amid Iran turmoil. The Bank of Japan held rates at 0.75%, but three of nine votes were for a rate increase, causing the yen to rise on the prospect of a rate rise at the BOJ’s next decision. The hawkish sentiment comes as the energy-vulnerable nation braces for inflationary impacts of the ongoing energy supply crisis. (FT)
  
  

• Inflation data set to cement rate rise next week. The ABS will release inflation data for March tomorrow, which top bank economists forecast will be around 4.8% for the 12 months ended March. Commonwealth Bank and NAB both expect the RBA to raise interest rates by 0.25 percentage points to 4.35% when it meets next Tuesday. (AFR)
  
  

• CEOs warn of stunted growth for 2026. 70 of 150 CEOs of mid-market companies expect no real growth for their companies over the remainder of the year due to rising interest rates and fuel prices. (Capital Brief)
  
  

• Canada launches $25bn sovereign fund to boost resource wealth. The resource-rich nation will look to replicate the success of Norway’s $3 trillion sovereign wealth fund. Prime Minister Carney announced the Canada Strong Fund will work alongside the private sector to finance infrastructure projects but that “it’s the people’s fund, we all benefit.” (FT)

Companies in the news

• Labor adds levy on social media giants to fund local media. The 2.25% levy targets Google, Meta, and TikTok, and will apply to all domestic revenues. Albanese urged the media giants to make deals with Australian media outlets, which would allow them to avoid the levy. The government claims the media giants benefit from Australian media outlets without compensating them. (Guardian)
  
  

• Microsoft and OpenAI end exclusivity arrangement. Microsoft previously had exclusive rights to sell OpenAI’s AI models in exchange for revenue share. The new deal is arguably beneficial for both parties, who had both been constrained within the bounds of the agreement. OpenAI is now free to expand to Amazon and Google cloud services, a long-desired capability. (Reuters)
  
  

• Macquarie offloads US utility in $8.3bn deal. US-based Cleco Power will be acquired by private equity buyers as a part of Macquarie Asset Management’s broader restructuring of its global holdings. (AFR)
  
  

• China forces Meta to unwind $2bn Manus AI acquisition. The decision by Beijing is a dramatic intervention, as neither company are Chinese — Manus was founded in China but moved to Singapore. China threatened to punish Meta and potentially pursue criminal charges against individuals involved. Meta had already incorporated Manus into its operations. (FT)
  
  

• Sharon AI raises $487m pre-IPO in another win for Aussie AI. The Sydney-based firm is already listed on the Nasdaq but is looking to debut on the ASX by mid-year, putting it in IPO contention with rival Firmus. (AFR) 

What the…?

Move over GameStop, Avis is the latest meme stock to be short squeezed. When the GameStop short squeeze of 2021 took down a hedge fund, the finance world was put on notice: Take on big short positions at your own peril.

Five years later, it’s happened again, but this time it’s a hedge fund vs. hedge fund battle. Car rental agency Avis was the target stock this time, with over half of its issued stocks being used to bet against the company.

When one hedge fund started snatching up Avis shares, the price started to rise, forcing another hedge fund to start buying shares to close their short positions. This short squeeze sent the stock up over 400% in April. The squeeze has since unwound, bringing the stock price down 74% from peak, but issuing yet another reminder of the dangers of mass short selling. (FT)

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Today’s Insight

Investing vs. Gambling: Explaining the difference

Non-investor family members may be skeptical about investing and draw parallels to gambling — financial adviser Matt Ingram from Northhaven gave us his thoughts on how to respond.

How do I convince my partner that investing isn’t like gambling?

Matt: For a lot of people, investing and gambling sit in the same mental bucket, thanks to news headlines about crashes and stories of people “losing everything.” If that’s your only exposure, of course it feels risky and unpredictable. I think one way to convince your partner otherwise isn’t so much about convincing them, but rather, involving them.

Show them what you’re actually doing. Start small. Talk through what it is, how it works, and what you’re buying. When the amounts are small, the emotional stakes are lower but makes it easier to learn. Most people didn’t grow up talking about the stock market around the dinner table. It’s more likely something they heard about in a movie.

I think driving is a good comparison. The first time you sit in the driver’s seat, you’re managing pedals, mirrors, traffic, speed, road rules. It feels like too much and can leave you mentally exhausted. But after a few months, you’re doing it without thinking.

Investing is similar, and when you understand that buying a broad index fund means you’re effectively buying small pieces of hundreds of (generally) profitable businesses, it feels very different from putting money on red at a casino. You don’t need to “win” the argument or convince anyone, you just need to reduce the unknowns.

Want to work with an adviser like Matt to get your family familiar with investing? Fill out the form on our website and we’ll match you with one of our hand-picked advisers to help you get started.

Today in Equity Mates