📈 Sydney & Melbourne auctions hit multi-year lows | Samsung & SK Hynix to benefit from $650bn investment drive

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The Big Picture

• Sydney and Melbourne auction clearance rates hit multi-year lows.
  Sydney's clearance rate has fallen to its lowest since April 2020 and Melbourne's to its weakest since the 2021 COVID lockdowns, with a preliminary national rate of 49.2% expected to fall closer to 40% once all results are counted. AMP deputy chief economist Diana Mousina attributed the weakness to concerns over negative gearing and CGT changes, forecasting home prices to fall around 5% over the next year. (ABC)
  
  

• US and Iran agree to stand down in tit-for-tat attacks. The US says it will halt attacks with Iran after reciprocal strikes from either side were made last week. US officials announced both sides will "stand down" to allow peace negotiations to resume, however Iran is yet to confirm the agreement. Peace talks between the two nations are reportedly said to resume on Tuesday local time in Qatar. (FT)
  
  

• Australia doubles social media ban penalty. The federal government will double the maximum penalty for companies breaching Australia's youth social media ban to $99m, accusing tech giants of "not doing enough". The eSafety Commissioner, currently investigating potential breaches by Facebook, Instagram, Snapchat, TikTok and YouTube, will also receive stronger information-gathering powers. (The Guardian)
  
  

• Australia and Vanuatu sign security treaty. Australia and Vanuatu have signed the Nakamal security treaty, a watered-down version of the original pact that collapsed last October when China moved to secure its own defence deal with the Pacific nation. The agreement confirms Australia as Vanuatu's primary security partner while cementing Vanuatu's right to keep its territory free from foreign military bases. (AFR)
  
  

• Putin admits fuel shortages from Ukrainian strikes. Vladimir Putin has acknowledged Russia is experiencing "a certain shortage" of fuel following repeated Ukrainian strikes on its energy infrastructure, though he insisted the situation was "not critical." Kyiv has framed the attacks as retaliation for Russia's strikes on Ukrainian civilians and energy infrastructure since its February 2022 invasion. (The Guardian)

Companies in the news

• Samsung and SK Hynix to benefit from South Korea's US$650bn AI investment drive. South Korean President Lee Jae Myung has announced AI and chip mega-projects backed by Samsung and SK Hynix, with planned investments potentially exceeding US$650 billion over coming years. President Lee framed the push as a race to secure "the core elements of AI faster than any other country." (Reuters)
  
  

• Google caps Meta's AI access as computing power runs dry. Google has limited Meta's use of its Gemini AI models after the social media giant requested more computing capacity than it could provide. The move reportedly disrupted internal AI projects and forced Meta to encourage staff to use AI more efficiently, proving even the world's largest tech companies are struggling to keep up with surging AI demand. (FT)
  
  

• Amazon Prime Day spending hits $26.4 billion. US shoppers spent $26.4 billion across Amazon's four-day Prime Day event, a 9.3% increase year-on-year. High inflation drove consumers toward heavily discounted electronics, appliances and personal care products. (CNBC)
  
  

• Firmus announces $43bn data centre in Indonesia backed by Nvidia. Firmus will develop a major data centre on the Indonesian island of Batam, off the coast of Singapore. With the project backed by Nvidia, the company is projecting $43 billion in revenue in the project's first six years alone. (AFR)
  
  

• Tesla's European sales surge as Musk backlash fades. Tesla's European vehicle sales rose 77% in the first five months of the year, a sharp rebound after a period of free-fall driven by buyer backlash against Elon Musk's political activities. Price cuts and low-interest loans have lured buyers back, with Tesla selling more cars than Ford, Nissan or Honda for the period. (NYT)

Australia’s ski season shaping up as one of the worst on record

June snowfall at Mount Hotham is currently at zero centimetres against a typical average of 35. El Nino, warm temperatures and rain have combined to produce what forecasters say will go down as one of the worst starts to the snow season on record.

Just two chairlifts are open across Australia's entire ski field network, while the cost of living crisis is adding further pressure on resorts, with lift passes at $121 per adult per day and accommodation running upwards of $1,000 a night. (AFR)

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Meta is Coming for Prediction Markets.

Bryce and Ren discuss Meta’s potential entry into the world of prediction markets on yesterday’s episode of Equity Mates Investing.

Mark Zuckerberg has spotted another product he likes and wants his own version of it. Prediction markets. Meta is internally building a product called Arena, which will sit outside of Facebook and Instagram as its own platform. Users will gamble using video game style points rather than real money. Ren thinks the no-real-money angle is probably a way to get around gambling regulations, and potentially a way to get younger users hooked on the behaviour early.

This is not the first time Zuckerberg has seen a competitor doing something well and decided he wants in. The list is long. Snapchat stories became Instagram stories. TikTok's vertical video algorithm became Reels. Twitter's weakness became the opening for Threads. Craigslist's classifieds business inspired Facebook Marketplace.

Some of those worked. Some not as much. But that is almost beside the point. Meta's core advertising business is so profitable that Zuckerberg can afford to throw money at a dozen ideas and only need one or two to land.

The question for Polymarket and Kalshi is whether a three and a half billion user distribution advantage eventually overwhelms a head start. History suggests it is worth taking seriously.

• Today on Equity Mates Investing we’re joined by one of Australia’s most respected finance journalists with a career spanning more than 50 years: Alan Kohler. We chat housing, childcare, climate change, superannuation and much more. (Spotify | Apple | YouTube)

• On Get Started Investing we’re joined by community member Damon for another instalment of Boost My Budget. (YouTube)