📈 AI agent infiltrates Australian gym | Westpac mortgage applications fall 20%

The Big Picture

• AI agent carries out first known autonomous hack in Australia. A man's AI agent hacked his gym's booking software to secure him a class spot by exploiting a vulnerability in the gym software. The agent was able to book months further in advance than allowed, while removing someone else from the class, all without being asked to do so. The incident follows global headlines last week when OpenAI's models autonomously hacked into another company's servers. (ABC)
  
  

• 15 million Australians have no binding say over who inherits their super. New research from Super Consumers Australia estimates that around 15.7 million Australians do not have a binding death benefit nomination, meaning their super fund decides who inherits their savings when they die. ASIC has warned super funds are doing a poor job of informing members of the binding death benefit nomination, with families sometimes waiting years for payouts that may not reflect the deceased's wishes. (ABC)
  
  

• Sydney and Melbourne's most expensive suburbs lead housing downturn. North Curl Curl has led the nation with a 19.4% fall from its peak, followed by Malabar down 18.7% and Point Piper down 17%. In Melbourne, Deepdene led the decline with a 14.1% fall, followed by Canterbury down 12.9% and Mont Albert down 12.6%. Every suburb in the top 50 for largest price declines is located in Sydney or Melbourne, with the most expensive 25% of properties in both cities falling more than three times faster than the cheapest quartile. (AFR)
  
  

• NSW introduces portable bond scheme to ease renter moving costs. Renters in Parramatta, Penrith and the Central Coast can now transfer their existing bond directly to a new rental property under the government's new Smart Rental Bonds scheme. The scheme removes the need to find thousands of dollars for a new bond before the old one is returned. (ABC)
  
  

• China launches "Ice Silk Road" Arctic shipping route. Chinese shipping company Sea Legend is launching the first regular container service through the Arctic this week, branding it the "Ice Silk Road" between China and the UK. The ships will follow the north Russian coast and bypasses chokepoints including the Strait of Hormuz and the Red Sea. The launch follows a record 23 transits through the Northern Sea Route last summer, as melting Arctic ice and geopolitical instability make the Arctic an increasingly attractive alternative for shipping companies. (FT)

Companies in the news

• Westpac mortgage applications fall by 20%. Westpac has reported that mortgage applications have fallen by a fifth, with the May budget and three RBA rate hikes this year compounding the slowdown. Investor applications have fallen more sharply than owner-occupier volumes, with negative gearing and CGT changes forcing many borrowers to change their property strategies. Shares for the bank ended the day down almost 6%. (AFR)
  
  

• Berkshire's new boss breaks Buffett's three-year buying drought. Berkshire Hathaway CEO Greg Abel purchased a net US$19.8bn in stocks in the second quarter, ending a more than three-year selling streak by Warren Buffett. Headlined by a US$10bn purchase of Alphabet shares, the move signals a decisive break from Buffett's cautious approach, with Abel purchasing shares at record market highs rather than waiting for a downturn. Berkshire’s cash pile currently sits at US$365bn. (FT)
  
  

• Sony and TSMC to invest $6.4 billion in Japanese chip plant. Sony and TSMC will expand their partnership through a reported $6.4 billion investment in a joint chip factory in Japan. The facility would help TSMC diversify its production base beyond Taiwan while giving Sony more secure access to advanced chip production and strengthening Japan's domestic semiconductor capabilities. (Bloomberg)
  
  

• Treasury Wine Estates records $558 million in US write-downs. The Penfolds winemaker has seen total write-downs increase to almost $1.25 billion in nine months as demand for US wine continues to slide. The company will cut inventory, reduce grape intake and pull out some Napa Valley vineyards, with TWE CEO flagging potential brand sales as a strategic review continues. This didn’t bother investors as shares rose 4.2% after the company revealed full-year earnings would come in above previous guidance at $492.3 million. (AFR)
  
  

• Asian carmakers cash in on US hybrid boom. Hybrid vehicle sales jumped nearly 20% in the US in July as higher petrol prices drove consumers toward fuel-efficient alternatives. Hyundai surged 62%, Toyota was up 22% and Honda 15%, giving the three Asian carmakers a combined 86% of the US hybrid market. Meanwhile for US carmakers, who offer few hybrid models, saw EV sales collapse, with GM down 33% and Ford plunging 75%. The notable absentees are Chinese EV makers like BYD, which are booming globally but remain locked out of the US by 100% tariffs, leaving Asian legacy carmakers to fill the gap. (FT)

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Court orders Trump to stop building $400 million White House ballroom

A federal appeals court has ruled that Donald Trump cannot build a $400 million ballroom on the site of the demolished White House East Wing without congressional approval. The court declared that "each president is a temporary tenant, not the owner, of the White House."

Trump called the decision "horrendous" and vowed to appeal to the Supreme Court, arguing the project was a national security necessity. The ruling gives the administration 14 days to file its appeal before the halt on above-ground construction takes effect. (ABC)

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Markets are at record highs. This is what’s driving them.

Bryce is back from five weeks in Europe and Ren catches him up on everything that happened in markets while he was away on the yesterday’s Equity Mates Investing episode. (Spotify | Apple | YouTube)

While many headlines have recently been dominated by AI jitters, semiconductor selloffs and geopolitical uncertainty, corporate America is having one of its best earnings seasons on record.

86% of US companies beat analyst estimates in the most recent quarter, well above the five-year average of 78%. All 11 US sectors are reporting positive revenue growth. Ten of those eleven are reporting positive earnings growth, and eight are in double digits.

A lot of these companies Energy is up 128% year on year. Communication services, which includes a lot of big tech, is up 112%. Information technology is up 65%.

It’s also worth noting some of the individual company numbers. Alphabet grew revenue 24% to nearly US$120 billion, its twelfth consecutive quarter of double digit revenue growth. Microsoft's cloud business grew 43% with a backlog of US$678 billion. Amazon celebrated its first ever quarter of US$200 billion in revenue, with AWS growing at its fastest rate in 18 quarters.

The equal weight S&P 500 has actually outperformed the market cap weighted index this year, which means it is not just mega cap tech driving the rally. Broad based earnings growth is doing the heavy lifting.

• We chat with Sam Ruiz, Portfolio Specialist at T. Rowe Price, on Equity Mates Investing about the outlook for the world’s largest AI investors and whether recent nervousness in the market is justified. (Spotify | Apple | YouTube)

• & Jess chats with Ren about whether she should continue investing in Australian companies or go 100% global on Get Started Investing. (Spotify | Apple | YouTube)