Today’s News

The Big Picture

• Two-week ceasefire declared in Middle East. US President Donald Trump has announced a two-week ceasefire with Iran, contingent on the immediate reopening of the Strait of Hormuz. Iran has signalled vessels will be allowed safe passage, coordinated with its armed forces, as both nations move quickly to frame the outcome as a win. The deal follows days of escalating threats, including warnings from Trump about targeting bridges and power plants. This even caused scenes of civilians in Iran forming human chains to protect bridges and power plants. (ABC | BBC)
  
  

• Sharemarkets jump and oil prices fall on ceasefire. Global equity markets rallied after the ceasefire announcement, the ASX finished up 2.6%, while Asia followed suit with Japan’s Nikkei up 5.5% and strong gains across Hong Kong up 3% and Shanghai up 2.5%. While oil futures fell more than 13% to below $95 a barrel. (AFR)

  
  

• Australian EV sales surge. A month into the Iran conflict, electric vehicle sales have jumped sharply, with 15,839 EVs sold in March, up 42% on the previous month and double compared to a year ago. The surge comes despite overall new car sales falling 3.3%, as rising fuel costs push consumers to rethink petrol. EV demand is so strong Polestar Australia have had to roster additional staff on weekends to meet demand. (ABC)
  
  

• Truckies warn industry ‘on the brink’ as fuel costs soar. Australia’s transport sector is sounding the alarm, with drivers and operators saying surging fuel prices since the Iran conflict have pushed them to crisis point. Unions and employers have joined forces at an emergency Fair Work Commission hearing in Sydney, calling for major retailers and clients to share the burden. (ABC)
  
  

• Consumer confidence slightly improves, still near record lows. Consumer confidence has edged higher this week, but remains the second lowest level since records began in 1973, according to the ANZ-Roy Morgan index. The small lift came as the federal government announced a temporary three-month cut to the fuel excise, offering some relief to households. (Capital Brief)

Companies in the news

• DroneShield CEO exits after controversial share sales. Oleg Vornik has resigned as CEO, with chairman Peter James also set to retire, just months after both sold down large stakes and rattled investor confidence. Vornik offloaded nearly $50m in shares shortly after receiving them, later citing a tax bill, and home renovation costs for the sale. He will be replaced by the current Chief Product Officer and remain as an adviser for three months, with shares finishing down 16% yesterday. (AFR)
  
  

• Universal Music jumps on US$64bn takeover bid. The world’s largest record company, which is home to the likes of Taylor Swift and Kendrick Lamar has received a takeover offer from Bill Ackman’s investment firm Pershing Square Capital. The bid comes after shares have fallen more than 30% recently over concerns AI-generated music could flood the market. The stock jumped over 10% on the news. (FT)
  
  

• Novo fires back in weight-loss war. Danish drugmaker Novo Nordisk has launched a stronger version of Wegovy in the US, priced 40% below rival Eli Lilly’s Zepbound and containing triple the dose of its previous version. The move comes as Novo looks to regain ground, with Zepbound outselling Wegovy more than two-to-one. Novo’s shares are down 46% over the past year, while Eli Lilly’s are up 28%. (Reuters)
  
  

• Intel joins Elon’s Terafab project. Intel has partnered with Elon Musk’s Terafab initiative, a planned semiconductor fabrication hub designed to power Tesla, SpaceX and xAI’s robotics and next-generation data centres. For Intel, which has lagged rivals in the AI race, the deal could help restore investor confidence as demand for its processors begins to recover. (Reuters)
  
  

• F1 hits speed bump as drivers and investors raise concerns. Formula One Group shares have fallen around 20% over the past six months, signalling the sport’s decade-long growth may be losing momentum. While disruptions from the Middle East conflict are seen as temporary, criticism from within the sport is raising deeper concerns. Major rule changes have altered car design, drawing sharp backlash from drivers, including Max Verstappen, who warned the changes could “ruin the sport.” (AFR)

What the…?

Houston, we have an inbox problem. The astronauts aboard NASA's most ambitious lunar mission to date, the Artemis II, may have broken records for how far humans have travelled into space. But even NASA astronauts couldn't escape a misbehaving Microsoft Outlook.

About seven hours into the flight, Commander Reid Wiseman flagged that he had "two Microsoft Outlooks on his PCs, and neither one of those are working." Flight director Judd Frieling confirmed at a Friday press conference that the problem was resolved quickly, with the culprit turning out to be nothing more than a software setup glitch. You can listen to the audio from the Artemis II as posted by one Reddit user. (Wired | Reddit)

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Today’s Insight

Current Small Cap Landscape

This was taken from our recent Equity Mates Investing episode titled ‘There’s Always a Bull Market Somewhere in Small Caps - Tobias Bucks’ (Spotify | Apple | YouTube)

Tobias: There is always a bull market somewhere. I think a lot of bull markets have ended. Software, I think clearly that bull market's ended, but there's some areas that have got some themes that are still going well. The current situation with the military operation in Iran and the effect on the price of raw commodity inputs like oil, gas, helium, fertiliser, all that stuff that's really important for the world is very disruptive. So it is worrying if that continued for three to six months, you'd have to downgrade corporate earnings expectations quite heavily for the rest of this financial year.

Having said that, the war gets resolved somehow, maybe not completely, but the commodities move through the straight at a more normalised level, then I think the environment can continue to benefit from the stimulus that we've seen in the US, the CapEx from AI and data centres and all the stimulus in China and Japan, it should get better.

Small Caps as they are, I think the bull markets in small caps are still in the electric grid, constructing data centre, optical equipment and networking for data centres, defence supply, new technologies in Asia and the Japanese small cap market, I don't think any of those have changed. If anything, Iran strengthened those.

For example, looking at the electric grid and renewables in Europe, do you think they're more or less likely to want to build more renewables over the next 20 years now? I mean, more likely.

And then when it comes to AI, do you think after Iran, the US is going to want to invest more in AI or less in AI? The same can be said about China, Japan and all these major economies. So the themes are the same and I think they favour global small caps.

Today in Equity Mates