Here’s what you need to know today

• Earnings season continues in America, and the standout from yesterday: Tesla added $126 billion in market value - the largest one day increase in its history - as shares rose 21% after reporting Q3 numbers. The highlights? Revenue was up 8% and profit up 17%. Guidance of 25% growth in auto sales next year (market expectations were 16%), ride-hailing network to launch in Texas and California next year and targeting sales of 2 million CyberCabs annually. (Forbes)
  
  

• News wasn’t as good for the other mega-cap tech stocks. Investors sold off big tech as continued strong economic data out of the US suggests that further interest rate cuts may not be needed. Nvidia fell 3%, Apple fell 2%, Meta fell 3% and Amazon also fell 3%. (Reuters)
  
  

• Striking Boeing workers rejected the company’s latest offer of a 35% pay rise over 4 years, on the same day that the troubled aerospace giant reported a $6.1 billion third-quarter loss. (CBS)
  
  

• China has accused Australia of “systemic racism and hate crimes” just days after an Australian diplomat raised China’s treatment of Uyghurs at the United Nations this week. The Albanese government has worked hard to restore our relationship with China, but tensions remain unresolved. (AFR)
  
  

• In the US, an E. coli outbreak tied to McDonald’s Quarter Pounders has led to one death and has seen another 49 people reported sick across 10 states. The fast-food giant reported that one-fifth of its 14,000 US restaurants had temporarily stopped selling Quarter Pounders. (AP News)
  
  

• Australia’s sovereign wealth fund, the Future Fund, has been criticised after increasing its shareholding in Santos, Woodside and Whitehaven Coal. The increased ownership of these fossil fuel companies is said to be breach of its promise to manage climate change risk. As a percentage of its portfolio, these three companies do represent just 0.44% (compared to almost 3% of the ASX200). (AFR)
  
  

• Data centres remain an incredibly hot investment theme. Global Switch Australia, the owner of two large-scale data centres in Sydney, was bought by HMC Capital for $2 billion. While this pails in comparison to Blackstone’s $24 billion purchase of AirTrunk is further cements data centres as the most sought-after asset of 2024. (AFR)

What the…?

Australian chickpea growers are in a mad race against the clock to get their chickpeas into India. Australia is the largest exporter of chickpeas globally and India is the largest consumer of chickpeas, but a 66% tariff on chickpea imports mean very few Australian chickpeas are consumed in India.

After a terrible chickpea harvest in India, Australian growers have been given tariff-free access to India until March, setting up a mad race against the clock to get Aussie chickpeas into India in time. (ABC has the full story)

Investing is a lifelong journey

Here’s what you can learn today.

This is an excerpt from our interview with Chris Judd on Equity Mates Investing podcast. (Apple | Spotify | YouTube)

Q: Let's focus on macro trends, the business cycle, and liquidity—why these three pillars, and how do they interplay?

It might be worth elaborating on liquidity for a second because to a lot of people, that might mean to them how many shares are being traded in the screen, but for us it's that central bank liquidity that's really important. So the most basic measure that a lot of people use is the central bank balance sheet minus the RRP and the TGA, which is the US checking account. But it's that sort of liquidity that we take most notice of, not so much how many shares are being trading on the screen in terms of a macro level. 

Yeah, I mean whilst we're a macro fund, we only invest in listed equities. Generally a macro fund invests in foreign exchange or direct commodities or with leverage bets. We don't use any leverage and we are long only in equity. So the name can be a bit misleading, but essentially what it means is our ideas come from top down as opposed to bottom up. We like that for a couple of reasons. It's easier for companies to do well when they've got a tailwind. And it's also not how most funds and people invest in Australia. And we like to be doing things differently because we hope that our returns are going to be different. 

If you look at listed equities, they generally go up seven or 8% a year. Money supply generally increases seven or 8% a year. Our view is that the equities haven't gone up. The thing measuring them has gone down by 7% a year. And we think that is really underappreciated. Even when people talk about the doomsday scenario of the great depression in the US and equity has dropped 90%, they didn't drop 90% against the US dollar being debased, they dropped 90% against gold. And I think that's what gets missed. We're in a very different environment now. 

We've got huge deflationary forces in tech. We don't always see it flow through to the economy because there's a huge debasement of currency and you don't generally see that in cross currency scenarios because everyone's doing it, but we're starting to exceed gold. We've obviously seen it in Bitcoin. We've sort of felt that in-house prices and how they've moved compared to people's wages and population growth. So there are clues there if you're looking closely enough, but everyone still just focuses on the price of the asset. Not many investors focus on what's happening with the denominator.

Want to watch the full interview? Check it out on YouTube:

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