Today’s News

The Big Picture

• RBA warns of ‘nightmare’ stagflation risk. Deputy Governor Andrew Hauser says Australia faces a “big income shock” as the Middle East conflict pushes inflation higher. Speaking in New York, he warned there’s little the RBA can do in the short term to curb rising prices, calling stagflation a central banker’s “nightmare.” (ABC)
  
  

• US accuses Iran of ‘economic terrorism’. Vice President JD Vance has labelled Iran’s blockade of the Strait of Hormuz “economic terrorism,” warning the US will ensure Iranian ships are also unable to leave during the blockade. Vance also flagged that the ball was in Iran’s court when it came to future ceasefire talks. (ABC)
  
  

• Last pre-war oil shipments near arrival. The final tankers to pass through the Strait of Hormuz before the conflict began on February 28 are set to reach their destinations here in Australia and elsewhere in Asia on April 20. Experts warn this could trigger fuel shortages in Europe and the US within weeks, as Asian buyers snap up cargoes that would typically head west, tightening supply in major economies. (FT)
  
  

• Aussie banks sound alarm on booming illegal tobacco industry. Australia’s financial crime watchdog AUSTRAC has received more than 300 reports from banks linked to illicit tobacco since launching a crackdown in November, with over 70 cases referred to law enforcement. Estimates suggest illegal tobacco now makes up as much as 50–60% of the market, worth up to $6.9bn, highlighting just how large the underground industry has become. (ABC)
  
  

• Singapore tightens monetary policy for first time in 4 years. Singapore’s central bank has tightened monetary policy and lifted its inflation outlook, citing surging oil and gas prices. The import reliant economy is feeling the strain from the Middle East conflict with the move also highlighting broader pressure across Asia. (FT)
  
  

• US housing hits lowest level in nine months. Home sales in the US fell 3.6% in March as higher mortgage rates begin to weigh on buyers. Economists say weakening demand is being driven by rising borrowing costs and a sharp drop in consumer confidence, linked to the broader fallout from the Middle East conflict. (BBC)

Companies in the news

• Hollywood pushes back on Paramount-Warner Bros merger. More than 1,400 actors and creatives, including Joaquin Phoenix, Ben Stiller and Kristen Stewart, have signed an open letter opposing Paramount Skydance’s proposed acquisition of Warner Bros. Discovery. They argue further consolidation would weaken one of America’s most influential industries, warning it could harm the future of a sector that is the US’s ‘single most significant export.’ (The Guardian)
  
  

• Trump’s $10bn WSJ lawsuit dismissed. A US judge has tossed out Donald Trump’s defamation case against the Wall Street Journal over a report linking him to Jeffrey Epstein. Trump sued the paper for at least $10bn, claiming it defamed him by reporting his name appeared in a 2003 ‘birthday book’ for Epstein. The judge ruled Trump “came nowhere close” to proving actual malice — the high legal bar required for defamation in the US. (BBC)
  
  

• Qantas flags fuel bill could hit $3.3bn. The airline estimates its fuel costs could hit $3.3bn due to the Middle East conflict, more than $800m above previous forecasts. In response to rising costs and volatility, Qantas has cut domestic flight capacity by 5% this quarter. (ABC)

  
  

• LVMH sales hit by Middle East conflict. The French luxury giant says the Iran war cut at least 1% from quarterly sales, as spending in the Gulf slowed and fewer tourists visited Europe. As the first major luxury player to report, the update is likely to heighten concerns about the war derailing a fragile recovery in the $400bn global luxury market. (Reuters)

What the…?

Trump deletes AI ‘Jesus’ image after backlash. The US President removed a post from Truth Social showing himself depicted as Jesus, generated using AI. The image followed criticism from Pope Leo XIV over US military actions in Iran.

The post drew swift backlash, with critics calling it “blasphemous,” while Trump brushed it off claiming he thought the picture depicted him “as a doctor.” (ABC)

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Today’s Insight

Guzman Y Gomez & NextDC: Buy or Sell?

On a recent episode of Equity Mates Investing episode Bryce and Ally played ‘Buy or Sell’ ahead of the launch of her show this Friday. Be sure to tune in when it drops (Spotify | Apple | YouTube)

Ally: Guzman and Gomez. It just reported and investors loved the result. The stock was up 18% on the day it reported. I don't like GYG personally, I don't think the food's that good, although I am gluten-free and dairy-free. Bryce, Buy or Sell?

Bryce: This one was a toughie for me. I think if you were to take a really long-term view on this, you could look at this as an opportunity to get in. The stock is down pretty significantly. However, it is a Sell for me. I think that it's incredibly expensive at the moment, and what is priced into it is near perfect execution. The second part of it is the US expansion. So much of it revolves around them doing well in the US, becoming the biggest Mexican chain. The CEO is very bullish on that. So I think for me, it's just too expensive, so it’s a Sell.

Ally: NextDC is our next stock. They just signed a $1 billion contract. I feel like Craig Scroggy the CEO announcing a new contract every other week. I don't know when he sleeps. That said, the stock is down nearly 30% since hitting a high in September last year. Bryce, Buy or Sell?

Bryce: Again, tough one. I think I'm going to go buy this one

Ally: First buy of the day.

Bryce: I'm so torn with this one, actually. Can I sit on the fence? I think the Buy thesis is like they've just got this billion dollar in debt funding, they have a lot of cash to be able to build out the pipeline of data centres. So I guess from that point of view, they're super well positioned. If they can actually execute on it, then great. On the other side is, have we seen peak data centre spend and capital expenditure? All we need is a pullback in the US or from some of the large hyperscalers, and the whole story can change pretty quickly because they're so tied in this now. Again, I think there's a lot of expectation on where this could go. So I know we don't do holds here, but I'm going to actually do hold.

Today in Equity Mates