Today’s News

The Big Picture

• Australia warned on 5% deposit scheme. The International Monetary Fund has warned the first home buyer scheme will drive up house prices, and should be limited to newly built homes. The warning comes as the median capital city dwelling in Australia ticks over $1 million and a recent survey found that 49% of Gen Z are considering moving to regional areas in the next 5 years. (AFR)

  
  

• California and UK sign clean energy pact — Trump fumes. California Governor Gavin Newsom and UK Energy Secretary Ed Miliband signed a clean energy cooperation agreement. It is unusual for US states to sign deals with foreign governments, leading President Trump to call the meeting “inappropriate” and Newsom a “loser.” (The Guardian)

  
  

• Germany latest to float teen social media ban. German politicians have proposed banning social media for children under 14, joining a growing European push after Britain, Spain, France and Portugal followed Australia’s lead. (Reuters)
  
  

• Chinese tech giants launch new AI models ahead of Lunar New Year. Alibaba, ByteDance and Kuaishou have all released new AI models as competition with US rivals heats up. Google DeepMind’s CEO says Chinese models are now only “months” behind the West. (Reuters | CNBC)

  
  

• Fed to ease rules in bid to boost mortgage lending for banks. The Federal Reserve’s head of regulation signalled capital requirements will be relaxed to help banks write more home loans. Banks have steadily lost ground to non-bank lenders, with their share of mortgage origination falling from 60% in 2008 to 35% in 2023. (FT)

  
  

• Logan Paul sells Pokémon card for $23.4m, smashing world record. YouTuber-turned-WWE star Logan Paul sold an ultra-rare Pikachu card for US$16.5m (AU$23.4m), the highest price ever paid for a Pokémon card. Not a bad investment either — he bought it for US$5.3m back in 2021, pocketing a return of more than 200%. (BBC)

Companies in the news

• BHP earns more from copper than iron ore for the first time. Australia’s largest listed company reported its FY26 half-year results, revealing copper has overtaken iron ore as its biggest profit driver for the first time. The shift reflects BHP’s pivot toward “future-facing” metals, with iron ore now accounting for less than half of profits, down from 70% when CEO Mike Henry took over six years ago. Shares rose 5% on the news. (AFR)

  
  

• Baby Bunting and Judo Bank shine in earnings season. Nursery retailer Baby Bunting posted a 25% sales lift at its newly renovated stores in the first half, sending shares up 7%. Judo Bank also impressed, reporting half-year profits up 50%, with the stock finishing higher by 2%. (AFR | AFR)

  
   

• Pentagon rethinks US$200m contract with Anthropic. The US Department of Defence is reportedly weighing up whether to cancel a US$200 million deal with Anthropic, maker of Claude. Anthropic wants restrictions on its AI being used for surveillance or autonomous weapons, while the military argues it needs broader lawful use. If Anthropic is labelled a “supply chain risk” by the government, it could force any companies wanting to do business with the Pentagon to cut ties with Anthropic. (Axios)

  
  

• Disney hits ByteDance with cease-and-desist over AI videos. Disney has reportedly issued a cease-and-desist to TikTok owner ByteDance after its new Seedance video tool allowed users to generate clips featuring Disney-owned characters like Spider-Man. The move comes as Disney continues to tighten control over its IP, including a US$1bn deal with OpenAI’s Sora tool last year. (BBC)

  
  

• Hyatt chairman resigns after Epstein correspondence revealed. Thomas Pritzker has stepped down as executive chair of Hyatt after documents showed he was in contact with convicted sex offender Jeffrey Epstein for more than a decade. Pritzker had held the role since 2004, taking over from his father Jay, who founded the hotel group in 1957. (FT)

  
  

• Fortescue trials battery-powered trains in the Pilbara. Fortescue has launched two electric trains to transport iron ore in WA, following similar trials by BHP. The Pilbara accounts for around 40% of WA’s carbon emissions, and the move is expected to save Fortescue roughly one million litres of diesel each year. (ABC)

What the…?

Free groceries for all in NYC… sort of. New Yorkers have been treated to the opening of two “free” grocery stores in the past month. And if you’re thinking it sounds too good to be true — you’d be right. The supermarkets are actually promotional stunts from prediction market operators Polymarket and Kalshi.

Polymarket called the store “a real physical investment in our community,” offering groceries with no payment required and no purchase limits. Prediction markets have skyrocketed in popularity in the US, with Kalshi now reportedly generating as much revenue as some of America’s biggest gambling companies.(Yahoo Finance | FT)

Today’s Insight

Your brain wasn’t built for investing

This was taken from our recent 12 Steps to Get Started Investing series with the episode titled ‘Automate It & Get Out of Your Own Way’ (Spotify | Apple | YouTube)

Ren: Our brains are not built for investing. That's the challenge when it comes to great investing. The way our brains have evolved over hundreds of thousands of year has largely been to help us survive the here and the now and not to navigate complex financial markets. Our brains are not optimised for long-term investing success, so we have to beat our brains. To explain that a little bit more, it introduces this term cognitive bias, which is basically all the ways our brains trick us from making sensible long-term decisions. Should we share some of our favourites?

Bryce: Yep. One of my favourites is Recency bias, that is where you often anchor or rely on recent data points or pieces of information that you've heard to inform your decisions because you've forgotten previous information. As a result, you put more weight on more recent information.

Another one is Loss aversion. That is one where you'll often hold onto a company that you're down on because you think the pain of selling that is greater than the reward you would feel if you were to take a profit elsewhere. What that leads to is people often holding onto stocks that are in losing positions far longer than they should.

Ren: One that I think is important for investors is the Endowment effect, where we give the things that we already own more value, than things we don't own. This constantly makes us really fall in love with the stocks that we own and we're not rational about ‘Is there a better opportunity out there?’

Today in Equity Mates