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Here’s what you need to know today

• Israel and Iran continue to trade missile strikes for the fifth day. Iranian officials reported that Israeli attacks have killed 224 people. Meanwhile, Israeli officials reported that 24 people have been killed by Iranian attacks. (ABC)
  
  

• US President Donald Trump left the G7 meeting in Canada early, as tensions in the Middle East continue to rise. Australian Prime Minister Anthony Albanese was in Canada planning to meet President Trump, but got stood up as Trump left early. (Capital Brief)
  
  

• President Trump posted online that “everyone should immediately evacuate Tehran”. China’s foreign ministry accused Trump of “Fanning the flames, pouring oil, making threats and mounting pressure” while in Iran, people were asking, how can Tehran’s 10 million residents all evacuate? (BBC)
  
  

• Novo Nordisk has made a $250 mistake that will cost them billions. The Ozempic-maker did not pay a $250 patent maintenance fee in Canada, meaning the drug will now move off patent in 2026 - opening the market for generic versions of their blockbuster weight loss drug. (Quartz)
  
  

• Meta has announced plans to monetise WhatsApp. The plan has three parts: (1) show ads in the Updates tab (not personal or group chats), (2) allow channels to offer paid subscriptions for exclusive content, and (3) allow businesses and creators to pay to promote their channels to new users. (Capital Brief)
  
  

• Amongst a sea of bad economic news coming out of China, there was one silver lining. The bad news? New home prices fell 3.5% year-on-year as new construction starts fell 23%. Factory output grew but at a slower rate, up 5.8% compared to 6.1% in the same period last year. But retail sales were the good news - up 6.4% year-on-year in May, accelerating from the 5.1% rise in April. (Quartz)
  
  

• The Australian government has said it will extend another $30 million loan to regional airline Rex, to keep regional routes running until December 2025. This package comes on top of an existing $80 million loan and the government buying $50 million of debt from Rex’s largest creditor. (Canberra Times)
  
  

• The Trump family have announced their latest business venture: a $499 gold-plated phone that will be made in America, called Trump Mobile. The Trump Organisation will also offer phone plans that cost $47.45 a month (Trump being the 45th and 47th US President). (AFR)
  
  

• Australian gambling giant Tabcorp has been fined $4 million for thousands of unlawful spam text messages. Tabcorp was found to have sent more than 5,700 unlawful marketing text and WhatsApp messages between 1 February and 1 May 2024. (ABC)
  
  

• Speaking of Australian betting companies, Betr’s share price fell 7% yesterday after it reaffirmed its commitment to acquiring rival bookie PointsBet. PointsBet has previously rejected their offer in favour of an offer from Japanese entertainment company MIXI. (Capital Brief)

What the…?

As the Australian federal election neared its conclusion, and both sides presented their pre-election budgets, Opposition Leader Peter Dutton proposed an East-Coast gas reservation scheme (mirroring a WA policy requiring offshore gas producers to keep 15% of their gas for Australia).

This chart published by the AFR shows the change in East Coast and West Coast gas prices over the past decade. Western Australian prices have remained flat, while prices on the East Coast have risen more than 200%. And while the reservation scheme isn’t the only difference, it is certainly a major one. (AFR)

Investing is a lifelong journey

Here’s what you can learn today.

Are you overweight Big Tech?

This is an excerpt from our conversation with Eric Marais, Investment Specialist at Orbis, on Basis Points (Apple | Spotify | YouTube)

Ren: What is your counsel to people who have ridden this convergence and ridden it well and now are quite overweight these Big Tech names?

Eric: It’s relatively easy to access funds that are a little bit broader than something like an S&P 500 index. If you have a passive approach, it's relatively easy to access funds that invest outside of the US. Even if you wanted to be in the US, there’s Russell 1000, there’s Russell 2000.

So there’s lots of options out there. I think as an active manager, what’s fascinating about what we see is there are opportunities even in expensive markets like the US—it just tends to be in places that not everyone is as focused on.

In particular, that kind of mid-cap range, everything outside of the very, very large companies today, there’s quite a big disconnect in terms of valuation multiples between mid-size companies and the very, very large companies. And you might think, okay, that’s just the effect of tech, but it’s not.

You have a look at Walmart, it’s almost up there with Apple [in terms of valuation], which is a little bit harder to imagine. But there are tonnes of opportunities out there if you take a more active approach.

Want to hear where Eric is seeing opportunities today? Watch our full interview on the Basis Points YouTube channel. And if you’re a financial adviser, complete the quiz to collect your CPD points (link in show notes).

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