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Here’s what you need to know today

• Australia’s sharemarket has made history, with the ASX200 surpassing 9,000 points for the first time on Thursday, driven by a strong reporting season, interest rate cuts and easing concerns over global trade tensions. The milestone comes just 13 months after the index broke through 8,000 in July 2024. (ABC)
  
  

• Commonwealth Bank has reversed its plan to cut 45 call centre jobs and replace them with an AI voicebot, conceding the move was a mistake after union pressure and a Fair Work Commission challenge. The bank had been the first in the sector to directly link redundancies to AI, claiming the new system reduced call volumes by 2000 a week, but later admitted calls had actually increased, forcing managers to roster overtime and pull team leaders onto phones. (AFR)
  
  

• Shares in artificial intelligence software maker Palantir fell more than 6% on Wednesday, extending a six-day losing streak. The stock has now dropped over 20% in the past week, wiping out the gains made after its strong earnings report on August the 4th. Investors are growing concerned about overvaluation and a broader pullback in the AI sector. (Quartz)
  
  

• The UK’s annual inflation rate rose to 3.8% in July, its highest in 18 months and the fastest in the G7. Rising transport, electricity, petrol, soft drink and hotel costs were key drivers, while a tight labour market has kept wage growth near 5%. Many businesses also said they had to raise prices because of April’s increase in National Insurance taxes. (Reuters)
  
  

• US retail giant Target has named longtime executive Michael Fiddelke as its next CEO. The company reported slightly better-than-expected earnings on Wednesday, but sales were down 0.9% from a year earlier and it warned of another year of declines. Target shares fell more than 6% after the announcement. (CNBC)

  
  

• Reporting season rolled on in Australia with Megaport experiencing one of the most volatile days in its history. The company reported FY25 revenue of $227 million and EBITDA of $62.3 million, both a touch ahead of expectations. Shares initially fell nearly 18% on concerns about higher operating costs, then recovered all their losses after CEO Michael Reid’s investor Q&A, before diving again to end the day down 1.5%. (AFR)
  
  

• Super Retail, the owner of Rebel, BCF, and Supercheap Auto, also announced their FY25 results on Thursday. Super Retail reported better-than-expected sales growth and gross profit margins. Shares were up 13%, taking gains to 22% since the turn of the year. (Capital Brief)
  
  

• Hertz will start selling its used cars on Amazon Autos, becoming the platform’s first fleet dealer. The move gives Hertz a new way to offload the hundreds of thousands of vehicles it sells each year. For Amazon, it’s another step in building out its autos marketplace, which it launched in December last year. Hertz shares jumped 6% on the news. (WSJ)
  
  

• Top executives from Australian miners BHP and Rio Tinto met with Donald Trump at the White House to discuss their Resolution Copper project in Arizona. Trump labelled opponents of the mine “anti-American,” as the project faces continued resistance from indigenous and environmental groups who say it would destroy a sacred Apache site. On Monday, the US Ninth Circuit Court of Appeals granted activists an emergency injunction, delaying a land transfer that had been due the next day. The project has been tied up in legal battles for more than two decades, and Rio and BHP have already invested around $2 billion. (Financial Times)

What the…?

OpenAI CEO Sam Altman has warned against people who are using ChatGPT like a therapist that there is no legal confidentiality to protect what they share.

In a podcast with comedian Theo Von, Altman admitted that, unlike doctors or lawyers, AI tools aren’t covered by privacy laws.

“So if you go talk to ChatGPT about your most sensitive stuff and then there's like a lawsuit or whatever, we could be required to produce that,” Altman said. “And I think that's very screwed up.”

Legal privacy concerns aren’t the only concern of using AI chatbots as therapists. A recent study from Stanford University found that AI therapy chatbots express stigma and make inappropriate statements against certain mental health conditions. (Quartz)

Investing is a lifelong journey

Here’s what you can learn today.

What makes an investment ‘good quality’?

Community Question: When you hear experts speak about buying ‘good quality’ investments on the podcast, what do they mean by that? Is there criteria for ‘good quality’? - Sophie, Melbourne, VIC

We put this question to Charlie Viola, Executive Chair and Founding Partner at Viola Private Wealth

I often say to clients that we have three fundamental things that we want to tick the boxes of in terms of the assets that we buy.

One, we want the assets to be producing revenue for them.

We want the assets to be producing income or at least have the ability to generate revenue over a period of time.

Secondly, we don't want to blow up the capital.

We don't want to be buying things that have got high risk of impairment. I look at risk very differently to what some people do. Some people look at risk in terms of asset allocation and growth assets and, you know, income assets or defensive assets.

I don't look at it that way. I look at risk in terms of the risk of impairment. So not so much the risk of it going up and down, but the risk of it actually turning to dust.

I take the view that large cap defensive equities are actually a defensive asset. Yeah, they change in value, but they're going to be there tomorrow. And if they've got good balance sheets, they’re well-run, they've got good competitive advantages, they're going to have an ability to generate revenue into the future. So buy those types of assets.

The third one is, make sure that you're protecting the buying power of your money over time.

You absolutely want to have more growth assets in your portfolio because you want the revenue that that asset can produce to increase over a period of time, not reduce.

You want to make sure that, you know, if you're buying any company or any portfolio, if it's generating a dollar today in earnings, you want it to have the ability to generate a dollar ten next year and a dollar 20 the year after, and 30 the year after, so that you can protect the buying power of your money.

Interested in speaking to a financial adviser? Fill out the form on our website and we’ll match you with one of our hand-picked advisers.

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