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Australia

• Unemployment steady at 4.3% whilst underemployment rises to 12 month high. Underemployment, being the percentage of the labour force that are able to work more hours, increased to 6.2%. The number of workers in full-time employment dropped by 57,00 people whilst the number of people in part-time work lifted by 35,000 people. (AFR)

• Australia Treasury doubles forecast for 2025-26 business investment. Treasury is raised its forecast from 1.5% to 3% in anticipation of greater investment in energy transformation, data centres and computer software. (Capital Brief)

• Teens are finding ways to get their social media fix. Members of Gen Alpha are proving awfully resourceful and pivoting to other social platforms to get around Australia’s newly introduced social media ban. Apps like Lemon8, yope and Coverstar are top of Apple’s App Store ranking, as eSafety Commissioner Julie Inman Grant warned that her team will be looking for new platforms that emerge and “migratory patterns”. (AFR)

• Households require $112k a year to rent in capital cities to avoid ‘rental stress’. The report released by Domain shows a greater than 50% increase since 2019. The Australian Bureau of Statistics defines households spending more than 30% of their pre-tax income on rent to be in ‘rental stress’. (ABC)

• Legal case launched against betting agencies to return millions in stolen funds. Gavin Fineff, a former financial adviser who is currently serving a nine-year prison sentence for defrauding clients to feed his gambling habits, has filed a lawsuit against Sportsbet, Tabcorp and Ladbrokes. The case aims to recover millions of dollars that was stolen by Fineff and never returned to his clients by the betting agencies. (ABC)

Global

• Division within US Fed as rates are cut to 3-year low. The US Federal Reserve has lowered it’s target rate to 3.50% - 3.75%, the third consecutive cut. The decision to lower rates was not unanimous as three of the twelve votes on the board objected to the cut, the largest amount since 2019. Confusingly, the dissent was split, with two voting for no change and one voting for a double-rate cut. (Financial Times)

• European Union raids Temu offices in Dublin. The EU has carried out raids of the Chinese online retailer’s offices to assess whether the company received any unfair subsidies. The raid comes as the EU plans to enforce stricter rules on low-value shipments which have flooded the European market due to a customs waiver of parcels less than €150. (Irish Times)

• India GDP growing at 8%, as PM Narendra Modi continues to fuel growth. The world’s fifth largest economy is growing at a rapid pace, but the Indian government is doing the large majority of the spending. Private firms contributed 34.4% to asset creation at the year end of March 2024, the lowest share in the last decade. Public spending is at a 12-year high at 8.4% of GDP. (Reuters)  

• US seizes oil tanker off coast of Venezuela. This comes after months of rising tensions between the two nations with various air strikes on vessels accused of shipping drugs. President Trump told reporters, “we’ve just seized a tanker on the coast of Venezuela, a large tanker, very large - the largest one ever seized actually”. (ABC)

• Trump’s US$1 million ‘gold card’ visa goes live. Anyone hoping for a quick move to the US in the new year may now have their wish granted (if you’ve got a spare US$1 million lying around). The expedited visa program went live on Tuesday in the US, with applicants also able to pay an extra US$15k for an even quicker processing experience. (Reuters)

Companies

• Oracle shares fall 11% on lacklustre revenue figures. The cloud provider failed to beat analysts revenue expectations for the quarter resulting in a drop in share price. The group also reported a $15 billion increase in it’s planned expenditure in data centres to continue its AI growth. (Financial Times)

• Myer shares rise from strong sales growth after horror year. The group reported sales up 3% in the first 19 weeks of the FY26 with a boost from Black Friday sales. The announcement of Solomon Lew joining the board also helped to boost shares which were up as much as 10% on Wednesday. Myer is down 63% from December last year. (AFR)

• White Fox, Aje, MJ Bale, Girll’d & Bing Lee all fined by ASIC. The Australian Securities and Investment Commission (ASIC) has fined the well known retailers for failing to submit their 2024 audited financial statements on time. Each company will be required to pay at least $187,800 in fines. (AFR)

• Tractor manufacturer Deere feeling the tariff pinch. The company has flagged that tariffs are backfiring on American farmers as they face higher input costs and weaker crop prices. Farmers are delaying when they replace aged machinery due to a lack of cashflow and heightened uncertainty around their businesses (Financial Times)

What the…?

Lugano, a city in Switzerland’s Italian-speaking Ticino region, now accepts Bitcoin as payment in most of its stores. Cryptocurrency terminals have been gifted free of charge to many local retail businesses by the city council. 350 shops now accept bitcoin as payment and even service businesses are getting in on the action with pre-schools starting to adopt the payment method.

The article also begins inside a Maccas where a man uses bitcoin to buy a coffee. With the coffee costing him 0.00008629 bitcoin or €6.6 ($AU11.62!) we hope it’s at least a McCafé coffee. (Which I also found out today is an Australian creation and is now in 60 countries around the world)

However, not everyone in town is thrilled with the new way of doing business. A statue representing Satoshi Nakamoto, the pseudonymous person(s) who developed bitcoin was recently thrown into Lake Lugano. (BBC)

Investing is a lifelong journey

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Andrew Brown revisits his prediction for booze stocks

Ren recently sat down with Andrew Brown to go through his bold predictions for 2025 in the Equity Mates Investing episode titled ‘Andrew Brown reviews his 2025 bold predictions’ (Apple | Spotify | YouTube)

Andrew: Prediction number 12. The value manager nightmare of 2024 was alcohol, booze. Most booze stocks were down and some were down horrifically. I'm predicting that there'll still be no rebound in booze stocks.

Ren: No rebound in booze stocks. Your reasoning there was quite interesting. So it would be worth just reiterating, which is a massive shift in drinking habits.

Andrew: Yeah, basically my generation, although I don't drink very much at all, but my generation drinks. Ren’s generation doesn't drink.

Ren: Yeah, well and I am still a millennial. Gen Z, even less.

Andrew: Absolutely right. It's that shift that's taken investors a long, long, long time to wake up to. And it's a global shift by the way. It's not just sort of in Sydney or London. It's a global shift. And if there's one negative prediction out of the 14 that I absolutely nailed, it's this one. Diageo, which is the nightmare value stock that lots of value investors have been in, they forget about the fact Diageo has got $20 billion of debt and it's got a whole bunch of your grandparents brands that these people say are fantastic brands (well they are if you're 80 years old).

So Diageo fell, 26%. Pernod Picard fell 24%. Brown-Forman fell 10%, Remy Cointreau fell 12%. Of course I think the one we didn't actually mention, but it was certainly on everybody's mind at the time, was our lovely homegrown premium boost stock Treasury Wine Estates down a mere 46%.

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