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Here’s what you need to know today

• Lithium prices have jumped almost 50% as a faster-than-expected recovery in demand for electric vehicles has coincided with many mining projects being halted due to the low price. In June, spodumene was trading at US$575 a tonne. It is now US$850. (AFR)
  
  

• As a result, Australian lithium miners have had a great couple of months. Mineral Resources, Pilbara Minerals and Lionstown Resources are all up more than 50%, while IGO is up 35%. (AFR)
  
  

• Australia may be facing higher tariffs from the US. President Trump threatened a higher baseline tariff “in the range of 15 to 20%” for any country that does not reach a trade deal by 1 August. Australia had previously been threatened with a 10% tariff in the original Liberation Day announcement. (CBS News)
  
  

• European leaders are not universally celebrating the bloc’s trade deal with the US that lowered the threatened tariff from 30% to 15%. France’s Prime Minister François Bayrou called it a “dark day” while Germany’s economy minister, Katherina Reiche, called the agreement “challenging”. (Financial Times)
  
  

• European drugmakers are also concerned about the 15% tariff on pharmaceutical exports to the US. Pharmaceuticals are Europe’s largest export to the US, with one estimate finding 43% of active ingredients in brand-name drugs consumed in the US are manufactured in Europe. While it is far lower than the 200% threatened by President Trump, the tariff will increase drug prices in the US for some of the most popular drugs including Ozempic and Botox. (NY Times)
  
  

• Earnings season continues in the US with surprisingly positive results. 82% of the S&P 500 companies that have reported so far have beaten Wall Street’s profit forecasts. (CNBC)
  
  

• Westpac, ANZ and Bendigo Bank have agreed to refund almost $60 million in fees charged to low-income customers, in an agreed settlement with corporate regulator ASIC. This comes on top of $33 million in fees these banks have already refunded to customers who could not afford them. (AFR)
  
  

• Commonwealth Bank has announced plans to replace dozens of jobs in its call centres with AI. The 45 jobs being replaced are a fraction of its 3,000 call centre staff, but it is a sign of things to come. (AFR)
  
  

• Tesla tapped Samsung to make its AI6 chips, in a deal worth $16.5 billion through to 2033. These chips are the EV maker’s next generation artificial-intelligence chips intended to progress its robotaxi ambitions. (The Guardian)
  
  

• PayPal has announced it will introduce crypto payments. The online payment giant will allow businesses to accept more than one hundred cryptocurrencies, with the company arguing that traditional cross-border payments can take days and charge fees up to 10%, while crypto payments are borderless and instant. (Bloomberg)
  
  

• World leaders responded to Israeli Prime Minister Benjamin Netanyahu’s claim "there is no starvation in Gaza". Anthony Albanese called the claim “beyond comprehension” while US President Trump acknowledged that there is “real starvation” in the region. (ABC News)

What the…?

OpenAI CEO Sam Altman has issued a warning to banks about an “impending fraud crisis”. Speaking at a Federal Reserve conference in Washington D.C. he said:

“I am very nervous about this. A thing that terrifies me is apparently there are still some financial institutions that will accept a voice print as authentication for you to move a lot of money or do something else. You say a challenge phrase and they just do it.”

With generative AI moving so quickly, Altman warned that any authentications aside from a password (such as voice recognition, taking a selfie, or even doing a video call) can be defeated by their most advanced AI models. (Quartz)

Investing is a lifelong journey

Here’s what you can learn today.

What level of insurance is right for you?

Community Question: How should Australians determine the appropriate level of life insurance coverage based on their specific family situation and financial obligations?

We put this question to Phil Thompson, financial adviser and founder of Skye Wealth

Let me start by saying that the same level of cover may be viewed by one person as being underinsured, while another person will view it as being over insurance, so picking the right level of cover all depends on your own personal willingness to accept the risk vs paying a premium to pass that risk onto an insurance company so take everything below with a grain of salt.

Income protection – Your ability to earn and income is going to be your biggest asset, especially if you are young. No point projecting out 20 years of superannuation balance factoring in contributions and growth, wasting time deciding if you should invest in an index fund vs going all in on Nvidia or planning out how to leverage into your next investment property if you don’t have an income to support your investing dreams.

Most income protection claims are short term, however, majority of all income protection costs are paid out to the few who need to claim on a long term basis so having a policy til age 65 is really important. Just like having a home worth $500,000 is important to cover the full $500k rebuild cost, a 2 year benefit period is like having home insurance for only $25,000. Sure, it may protect against some water damage claims but if your house goes up in flames, you’re not protected.

Life, TPD & Trauma are far easier – Think about the real cost of one of these events then cover it.

• Home Loan – Would you want this cleared if you were to pass away or become disabled?

• Investment Loan – Is this important to clear or would your rental/dividends cover the cost and/or you’d be happy to sell it

• Loss of income – Income protection does not pay out if you pass away, would you need to cover you or partners income for a period after someone passes away? If you were to be diagnosed with cancer or become disabled, could you live off the 70% of income from your income protection or would you need additional lump sum amounts to cover the gaps?

• Medical cost – If you were to be diagnosed with cancer or become disabled, would you want a lump sum of money to fund specialist appoints, nutritionist, additional cost for care/accommodation?

At the end of the day all of these considerations need to be against the cost of the cover, if covering 100% of the loan, 100% of the loss of income til retirement and paying the best medical care cost an extra $50 per year in premiums, it’s a no brainer, if the premiums are going to be $5,000 more, then we need to get out the old trusty pro/con list.

Interested in speaking to Phil and the insurance specialists at Skye Wealth? Fill out the form on our website and we’ll put you in touch.

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