Here’s what you need to know today

• Netflix to acquire Warner Bros Discovery. The deal brings together one of Hollywood’s oldest studios and Hollywood’s newest power player. Netflix beat out Comcast and Paramount Skydance to secure Warner Bros in a deal valued at US$72 billion. A key question becomes: what will Netflix do with Warner’s streaming platform HBO Max? (Bloomberg)
  
  

• A big week for interest rates. On Tuesday, the Reserve Bank of Australia will release its decision on Australian interest rates (widely expected to be a hold). Then on Wednesday (Thursday morning Australian time), the US Federal Reserve will release its decision (expected to be a cut). (Reuters | Reuters)
  
  

• Mixed spending from Black Friday and Cyber Monday. Data from MYOB shows a state-by-state divergence in Black Friday and Cyber Monday spending in Australia. Victorian retail purchases grew 22%, WA was up 7% and QLD up 2% while NSW purchases dropped 2%. Such a divergence is unusual and suggests different levels of consumer confidence in difference states. (ABC)
  
  

• Macquarie continues taking market share. APRA’s latest data on Australian mortgages shows Macquarie’s mortgage book has grown 23% over the past year. Meanwhile, Westpac, NAB and ANZ have all grown their mortgage books slower than the overall market. (ABC)

  

  Source: ABC News

  
  
  

• Electricity the biggest bottleneck for data centres. Australian data centre operator NextDC has acknowledged that electricity will be a key constraint in its $7 billion deal with OpenAI. To get around it, the company is looking to strike long-term off-take agreements with undeveloped renewable energy projects to secure the electricity needed for this Australian data centre build out. (Capital Brief)
  
  

• Webjet hopes to be sold by Christmas. The Australian travel booking portal is the focus of a bidding war between private equity firm BGH and ASX-listed Helloworld. The process has been playing out since May but Webjet has made clear it hopes to have a resolution in the next couple of weeks. (Capital Brief)
  
  

• Big Tech looks to break Nvidia monopoly. Amazon has announced its new AI chip, Trainium3. This follows recent reporting of Google’s success with its own TPU chips. The major tech companies are trying to lessen their reliance on Nvidia’s chips that have been essential to the rise of AI.
  
  

• SpaceX eyes US$800 billion valuation. SpaceX has proposed a share sale at an US$800 billion valuation. This would see Elon Musk’s space company leapfrog OpenAI to once-again become the world’s most valuable private company. This valuation is double the US$400 billion it recorded in July. (WSJ)
  
  

• US criticises European allies. The Trump Administration has released its latest National Security Strategy, which claims Europeans “trample on basic principles of democracy” and are obstructing peace in Ukraine. In response, the strategy document suggests, America should be “cultivating resistance to Europe’s current trajectory”. (ABC)
  
  

• Vaccine skepticism winning in America. A vaccine advisory panel at America’s Centres for Disease Control voted 8-3 to stop recommending Hepatitis B vaccines for all newborns. This has been guidance in the US for decades and continues to be part of Australia’s National Immunisation Program. The decision comes as US Health Secretary, Robert F. Kennedy Jr., fills key public health positions with vaccine skeptics. (BBC)

What the…?

The Minister for Communications and Sport Anika Wells is under fire by the press and the public for spending more than $94,000 of taxpayer funds on return flights for her and two colleagues for a recent trip to New York.

When asked about how she managed to spend so much on three flights, Minister Wells stated it was important work but would not explain why they were so expensive. For reference, a quick check of the Qantas website has Sydney-New York return flights in business class at ~$11,000. (AFR)

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Here’s what you can learn today

Chinese tech offers high growth at low prices

This is an excerpt from our conversation with Sorin Roibu, co-portfolio manager at Brandywine Global, on an episode of Equity Mates Investing. (Spotify | Apple | YouTube)

Bryce: Can you talk to us about your view on large cap US stocks?

Sorin: I'm glad you followed up with that because I just realised I didn't answer the particular US tech question. Look, the US tech names are expensive. I know that they are very profitable, the most profitable they've been, they've done incredible. A lot of the returns that you've seen over the last few years is justified because stock prices follow earnings, but we're value investors.

Bryce: Now Sorin another key takeaway from the portfolio is just how globally diversified you are. Many of your top holdings, European and Chinese companies, and compared to the index as we've spoken about, you are certainly underweight US.

Sorin: Ultimately, the size of our exposure is a function of the opportunity set the conviction level, both at the macro, but also can we find cheap stocks that we think are so cheap and it would cover all the risks that we're being compensated to invest in them… China is one that's interesting… (Baidu and Alibaba are) really cheap. I mean, we own the Google and Amazon of China that traded five, six times PE versus the US counterparts.

Catch the full podcast on Spotify or Apple, or watch it on YouTube here:

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Offering access to a dynamic segment of the Australian market, companies outside of the ASX 20. The First Sentier ex-20 Australian Share Fund Active ETF provides a differentiated approach that sidesteps the dominance of heavyweight financials and resources, offering a more active and differentiated approach to Australian equity exposure.

Fund issued by Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235150). General advice only. Does not take account your objectives, financial situation or needs. Read PDS & TMD on FSI's website. All investments contain risk and may lose value.

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