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- RBA holds rates despite high inflation | Don't tell Warren: SpaceX delivers Musk $168bn - in one day
RBA holds rates despite high inflation | Don't tell Warren: SpaceX delivers Musk $168bn - in one day
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The Big Picture
Reserve Bank holds interest rates despite high inflation. After three consecutive rate rises to start the year, the RBA held the cash rate at 4.35%. Despite inflation of 4.2%, all of the Big Four banks now forecast the next move will be down in early 2027. (RBA)
Sydney leads nation-wide property sales slump. Sales are down 17% in the three months ended May. Melbourne fell nearly as hard at 14%. Cotality forecasts the greatest reductions will occur in investor-heavy markets including Queensland, South Australia, and NSW. SQM Research suggests states could see stamp duty revenue fall 25%. (AFR)
US considers US$300bn fund for Iran reconstruction. The funds will be contingent upon Iran upholding its end of the ceasefire, including the nuclear disarmament component. A senior US official stated funding would not come from governments, but rather companies looking to invest and earn returns. (FT)
Trump drains emergency oil reserves ahead of midterms. To keep gas prices low and voters happy, Trump has heavily tapped into the US Strategic Petroleum Reserve, draining it by roughly 18% since the conflict began in late February. The Reserve is America’s emergency wartime store and is now less than half full. (CNN)
Japan raises interest rates to 31-year high. The central bank raise rates to 1%, the highest level since 1995, as spend-happy Prime Minister Sanae Takaichi dismisses rising Japanese inflation. The world will look to the US Fed’s decision tomorrow as new Chair Kevin Warsh weighs Trump’s pressure to cut rates despite three-year high inflation. (BBC)
Companies in the news
Don’t tell Warren: Musk gains Buffett’s wealth — in one day. Elon Musk’s space-AI company rose 20% on its second day of trading, adding US$168 billion to his net wealth. This is more than Warren Buffett’s entire wealth of US$148 billion. Banks were among the excited buyers, exercising their options to pickup an additional US$10bn of SpaceX shares. (NDTV | CNBC)
Nvidia joins AI fundraising frenzy with US$25bn bond deal. Amid over $400 billion of IPOs and equity raises, the world’s most valuable company will sell US$25 billion of investment-grade debt. High demand for Nvidia’s debt has decreased its yield to just 0.5% above the “risk-free” 10-year US treasury yield. (FT)
Fox acquires Roku in US$22bn bet on sports streaming. The move will be an aggressive expansion into streaming for the live TV group. Over half of US households have Roku, which will provide Fox with broad distribution for its existing news and sports content. Investors see the deal as one-sided —Roku’s stock surged 24% on the news, while Fox’s fell 16%. (FT)
Musk takes second legal loss against OpenAI. Musk was less lucky in the courtroom, where a US judge dismissed his second lawsuit against OpenAI. Musk had accused OpenAI of stealing secrets from xAI to train ChatGPT, a claim the judge dismissed with prejudice. (Reuters)
Sharon AI stock jumps on sovereign AI deal. The AI compute provider will deploy 600 petabytes of VAST Data’s software in an all-Aussie AI deal. The deal is lauded as a step towards Australian independence from US AI giants. Investors agreed — the stock popped 13% on the news. (ITB)
Have you for your ticket to FinFest 2026?
Early Bird Tickets are selling fast! Don’t miss Australia’s largest finance festival.
Across 5 stages, we’re going to have some of the best speakers and finance experts unpacking how everyone can take control of their money. Whether you’re a beginner or an experienced investor - there will be plenty there for you.
24 October. Carriageworks, Sydney. Secure your tickets today.
The Samsung Effect
The Korean district of Dongtan is experiencing an economic boom that has seen the price of a small apartment rise $187,000 in just the past two weeks. Its secret: Dongtan is conveniently located next to several massive Samsung chip fabrication and research plants.
Samsung has recorded massive profits on the AI boom, and recent union action secured bonuses averaging $475,000 for chip workers. Much like Silicon Valley, Korea’s Semiconductor Belt has enriched hundreds of thousands of people, and local economies have been pulled upwards thanks to the tech giants and their employees. (FT)
This is one of the deepest and longest drawdowns for quality investing in decades
Uncomfortable? Yes.
Unprecedented? No.
History shows these periods are part of the journey, but not necessarily a reason to abandon discipline. Over the long term, quality has outperformed other styles with relative smoother drawdowns and better downside protection. But it also lags around a third of the time, often when markets turn more speculative. That’s exactly what makes moments like this so challenging… and so important.
Do you stay the course when it matters most? Access the full data and analysis.
A core refresher
On a recent episode of Equity Mates Investing, Bryce and Ren answered community questions about their core, starting with a reminder of what a core is and what they have in their cores.
Bryce: What is our core?
Ren: So we run a core and satellite portfolio setup where our core is the bulk of our portfolio. It's where most of our money is invested and what we do with our core is just buy index ETFs. You're buying a little bit of everything in one simple ETF or a couple of different ETFs for different markets. You're just taking the overall market return.
Bryce: In mine, I have G200, which is a leveraged ASX 200 ETF. I have IVV and GGUS, which is a blended exposure to the S&P 500. I have VAE, which is Vanguard's Asia X Japan and then VEQ, which is Vanguard's Europe ETF. So global, broad exposure of developed markets.
Ren: For me, three ETFs, GHHF, which is a leveraged global ETF, is the bulk of my core, 70%. That's got majority Australia and US exposure though. So I have two ETFs which are each 15% holdings. BEMG increases my exposure to all the emerging markets and then XUS, which is an ETF that is the developed world outside of Australia and the US.
