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- 📈 A Second Strait: Houthis blockade Saudi oil exports | Google stock jumps on new AI chip
📈 A Second Strait: Houthis blockade Saudi oil exports | Google stock jumps on new AI chip
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The Big Picture
A Second Strait: Houthis blockade Saudi oil exports. Iranian-back Houthi rebels in Yemen declared a blockade of the Bab al-Mandeb Strait, a vital maritime chokepoint, in response to Saudi Arabia’s “oppressive siege” on Yemen. The strait offered an alternative export route for Saudi oil to avoid the Strait of Hormuz. The Houthi blockade further threatens global oil supply. (ABC)
Hedge funds dump US tech as short selling hits record highs. Tech was by far the most sold US sector last week and marked the eighth consecutive week that hedge funds sold off their tech holdings and bet against tech via short selling. Short positions now make up nearly 4% of the S&P 500’s float, an all-time high. (Bloomberg | Bloomberg)
Labor accelerates space approvals to create launch hub. Industry Minister Tim Ayres is urging the Australian Space Agency to modernise and expedite its approvals cadence as the nation looks to become the preferred Indo-Pacific space hub in the US$650 billion space economy. (AFR)
13 million bedrooms empty as Boomers avoid downsizing. A Senate committee was told that older couples are staying in large homes due to expensive downsizing options. House prices are falling, but turnover has slowed as property owners hold on to properties with grandfathered tax advantages. (AFR)
US hits Canada with 50% tariff. America’s northern neighbor was one of two nations that retaliated against Trump’s tariffs last year — the other was China. Milk, dairy, and alcohol are among the goods to receive the new 50% tariff. The Trump administration appears ready to reignite trade wars, having recently investigated a variety of imports, including Australian lamb. (FT)
Burnham’s pricey remarks send UK bond yields upwards. The yield on UK government bonds, called gilts, rose 0.08% as investors sold gilts following remarks from the UK’s new prime minister, Andy Burnham. He stated he would target flexibility within spending rules that govern UK borrowing, sparking fears of overspending and future inflation, leading to gilts being sold off. (FT)
Companies in the news
New Gemini chip sends Google up over 3%. Google's new Frozen v2 chip will have Gemini architecture physically etched into the chip’s silicon, reducing calculations required and allegedly making it six to ten times more energy efficient for serving AI tokens. Google is aiming for a 2028 launch of the new chip. The stock popped 3.6% in response. (CNBC)
Aussie firms Telix, Hub24 post strong Q2 results. Telix Pharmaceuticals posted a 21% increase in revenue year-on-year and is on track for full-year revenue over US$1 billion. Financial services platform Hub24 reported net inflows of nearly $19 billion, up 20% on the year. (Motley Fool | Telix)
Data centres receive mixed market reception. Sydney-based cloud provider IREN saw its stock soar over 20% on news of US$2.8 billion in new contracts with Microsoft, Nvidia, and other AI names. Oracle was not so lucky. Its public debt rating was downgraded to one level above junk status, and its bonds are among the worst performing in the US. (Capital Brief | Business Insider)
Revolut enters Australian banking market with APRA approval. The London-based fintech just received a banking license from the prudential regulator, allowing it to take federally-guaranteed deposits. Over one million Australians already use Revolut, which seeks to challenge Australia’s established banks in the coming years. (AFR)
Judge pauses Hollywood’s US$110bn mega-acquisition. The federal judge sided with the 12 Democratic state attorneys-general in their petition to legally challenge Paramount’s US$110 billion acquisition of Warner Bros Discovery on the grounds that it would weaken competition in the TV and movie industries. (FT)
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Sydney Airport offers queue skip… for a price
For just $20, international flyers can now jump the queue at security and immigration on their way out of Sydney Airport. The Fast Track pass will allow paying flyers to join priority screening lanes alongside business and first class travellers.
Despite outbound waiting times already averaging under 10 minutes for nearly 100% of customers, the airport promises the move will reduce stress and save time. Most large international airports already offer a similar service, but SYD marks Australia’s first foray into airport fast passes. (FT)
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To gear or not to gear
With geared ETFs on the rise, Cam Gleeson from Betashares joined Jess on a recent episode of Get Started Investing to answer a community question on whether or not switching to geared ETFs is the right move. (Spotify | Apple | YouTube)
Community member John had a simple question: Should I replace my ETFs with geared ETFs. Cam's answer wasn’t so binary, saying it depends more on the investor than the product.
He explained the mechanics clearly. Geared ETFs use internal leverage to amplify market exposure. Mathematically, for a young investor with decades ahead, it makes sense to take the increased exposure. But life isn’t always mathematical.
Cam tells Jess about his own kids. He gave them $100 each to invest in either a geared ETF, GHHF, or a non-geared ETF, DHHF. Despite having 50-year time horizons, both chose the ungeared option for fear of volatility. When Cam described the geared fund, his children's "risk aversion was probably higher than I thought."
The real decision isn't gear or don't gear. It's whether or not you can hold on through a 15% drawdown without panic-selling? If not, gearing might not be the right decision for your long-term returns faster than it accelerates them.
