📈 US-Iran conflict reignites | 12 states sue to block Paramount-Warner Bros acquisition

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The Big Picture

• US-Iran conflict reignites as Iranian missiles strike Emirati ships. Two oil tankers were hit by Iranian cruise missiles in the Strait of Hormuz late Monday night after allegedly attempting to circumvent Iranian control. Iran also struck US bases in Bahrain and Jordan. The US retaliated, striking dozens of Iranian targets. (WSJ | FT)
  
  

• Oil jumps 10% as Trump announces Hormuz toll. With conflict renewed, Trump announced the US would be the “guardian on the Hormuz Strait” and re-established a naval blockade, as well as a new 20% toll “on all cargo shipped” as reimbursement for protection. This toll could add an additional US$16 to the price of each barrel of oil transiting the Strait. Brent crude prices jumped 10% on the news. (NYT | NYT | FT)
  
  

• ASX stands firm as Korean, US markets hit by oil shock. The ASX ended the day flat as strong performances from energy stocks helped offset minor losses in financials. The bubbly Korean and US markets were not so lucky — Korea’s Kospi fell 5% and the S&P 500 fell nearly 1%. (AFR)
  
  

• Chinese trade soars on AI boom and pre-tariff rush. China’s imports and exports rose 36% and 27%, respectively, in the year ended June, their largest gains since pandemic recovery in 2021. Car exports were a notable standout, up 71% to 1.06 million. However, crude imports shrank 41% to the lowest level in the past decade. (CNBC | FT)

Companies in the news

• 12 states sue to block Paramount-Warner Bros acquisition. California, New York and 10 other Democratic state attorneys-general launched an anti-trust lawsuit claiming Paramount’s US$110 billion acquisition of Warner Bros Discovery would “extinguish competition” and harm cinemas, TV distributors and audiences. (FT)
  
  

• SK Hynix rebounds after record crash. The memory chip firm opened down over 6%, but rallied in the afternoon to close up 4%. This follows its Monday crash, which saw the stock fall 16%, the stock’s largest fall in nearly 20 years, and trigger a trading halt on the Korean exchange. (Reuters)
  
  

• TSMC monthly revenue surges 68%. The world’s largest semiconductor firm announced June revenue of nearly $18 billion, a 68% increase year-on-year. The company is building new plants in the US, Japan and Germany to keep up with high demand. (MarketWatch)
  
  

• Xero stock falls 4% as CEO dumps shares. CEO Sukhinder Singh Cassidy sold all of her nearly 30,000 ordinary shares, worth roughly $2.2 million, for “managing personal tax obligations”. Investors were spooked, driving the stock down over 4%. (Capital Brief)
  
  

• Stellantis shipments rise 10% as peers struggle. North American shipments were the primary cause, rising 38% year-on-year. The strong performance is an outlier among its European peers, who have been under pressure from Chinese carmakers. One notable example is Volkswagen, which just announced 100,000 layoffs amid falling profits. (Reuters | BBC)
  
  

• ACCC investigation forces Origin Energy to refund customers. The competition watchdog found that Origin’s Ongoing Saver plan customers were being charged more than Basic plan customers, despite the energy provider claiming it delivered savings. 4,500 customers will receive an average of $60 in remediation. (Capital Brief)

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Move over, air conditioning — winter melons are here

This summer, the coolest new cooling accessory in China comes from the farmer’s market. Thanks to an old Chinese folk practice, babies and pets are curling up next to the aptly-named winter melons to beat the heat.

The giant melons have a high water content, allowing them to act like a natural cold pack for hours after being chilled. With a record-breaking heatwave hitting several parts of China, winter melons will be in hot demand for weeks to come. (CNN)

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A shifting property perspective

Financial adviser Julie Bullen from Fox & Hare sees a rebalancing of asset classes as a result of budget changes.

With changes coming into play, are you thinking about the asset mix? Whilst the budget hasn't been legislated, are thinking about asset classes differently?

Julie: The idea of property is definitely going to take a shift. For some people, their ability to buy the property may have disappeared or the timeline may have been pushed out slightly. It hasn't changed my view on wanting to buy property, but it has changed the landscape slightly.

You've mentioned either investment bonds or education bonds. This is a really good option for someone who's on the highest marginal tax rate, but if you're not, it's still got a 30% tax. So again, it's just kind of levelling the playing field for 30% is basically the base tax that anyone's going to pay.

Some people will be taking a shift and more of a focus on income generating high yield assets rather than on the growth shares, but if you're earning over $45,000, you're going to get taxed at the same rate anyway.

Small pivots might need to happen, but overall I don't believe it significantly changes the landscape for the everyday investor.

Want to work with an adviser like Julie to figure out if you need to adapt your strategy post-budget? Fill out the form on our website and we’ll match you with one of our hand-picked advisers to help you get started.

• Basis Points: Private credit has caught a lot of heat in the media. We’ve got an insider’s guide to what’s coming next. (Spotify | Apple | YouTube)