Here’s what you need to know today

• Conflict continues to escalate in the Middle-East. A day after Israel invaded southern Lebanon and bombed Syria’s capital Damascus, Iran fired around 200 missiles towards Israel. These missiles were largely intercepted by Israel’s Iron Dome and the US Navy but the region is fearful of further escalation.
  
  

• As a result of rising tension in the Middle East, oil prices surged 5%.
  
  

• As 45,000 US dock workers begin their strike, the impact on global trade flows are starting to be understood. The International Longshoremen’s Association president warned in a video last month “I will cripple you” with estimates the strike will cost the US economy $5 billion each day. For Australians, the ABC have the analysis on how the US dock workers strike could hit our hip pocket.
  
  

• The annual rate of inflation in the Euro Zone dropped to 1.8% in September, the first time it is below the European Central Bank’s 2% target since 2021. This makes it more likely the ECB will cut rates again in its next meeting in October.
  
  

• US Vice Presidential candidates, JD Vance and Tim Walz, clashed in their VP debate ahead of the upcoming US election. The debate was noticeably more polite and focused on policy that the Presidential debate earlier this month.
  
  

• Google’s DeepMind and pharmaceutical company BioNTech are building artificial intelligence lab assistants to help researchers plan experiments and predict outcomes. With AI’s early success identifying powerful new antibiotics, we’re excited to see where this will lead.

What the…?

Here’s a question: which of these products is Donald Trump not selling at the moment?

• A ‘God Bless the USA’ holy Bible ($60)

• A pair of Bitcoin sneakers ($399)

• Melania Trump branded Christmas ornaments ($90)

• 18 karat gold watch ($100,000)

It was a trick question (sorry), because as this article outlines, Trump is selling all of those and so much more.

Investing is a lifelong journey

Here’s what you can learn today.

23andMe’s Fall From $6 Billion to Nearly $0

At its peak, 23andMe was one of the hottest startups in the world. The DNA testing company asked customers to spit in a tube and send it off for analysis. At first it would return ancestry data about the customer. It then extended its analysis into basic health data. To investors, it promised to transform itself into a comprehensive healthcare company that used its DNA testing ability and bank of DNA results to develop drugs, offer personalised medical care and sell subscription health reports.

The company went public in 2021 and it reached a $6 billion valuation. Today, just 3 years later, the share price has fallen 98% and the company is searching for fresh capital as it faces running out of money in 2025.

This article from the Wall Street Journal tries to understand what happened. The company has suffered slowing sales and data leaks (not of DNA data but of non-genetic customer data). There are also questions about its business model - most customers only take (and pay for) the test once and don’t get life-altering results.

However, the company still does have one incredibly valuable asset. 10 million customers have agreed that their DNA samples may be used for drug development and medical research. The challenge for 23andMe is that medical research and drug development is expensive and takes time, two things the company does not have.

Today’s sponsor is First Sentier Investors

Long-term growth is achieved by concentrating on compounders  

Not all growth stocks are made equal. Some can compound cash flows over decades, while others see earnings drift backwards.

First Sentier Investors believe actively targeting Australia’s growth engine – high quality growing companies listed on the ASX – is the secret to beating the market.

Since 1993, every wholesale fund managed by its Australian Equities Growth team has outperformed the share market over the long term¹.

This video explores growth stocks under the close watch of the team.

 ¹ Past performance not indicative of future performance. As of August 2024, net of fees.

Want more Equity Mates?