the COB: the AI spark

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1:01That's Q-U-O.com-tek. The C-O-B is brought to you by Longview, a new way for investors to access Australian residential property. Visit longview.com.au. Shining. Hello, long time no see. I'm Juliette Sali with the C-O-B. Let's have a quick look at where the local market is tracking. We've got 10 minutes until the actual finish of the day's trade. And of course, we had that really solid AI thematic on Wall Street overnight. I'm going to be talking about that with my guest Mark Garner from NBC Markets coming up in a couple of minutes time, but we know we don't have the same exposure to text. Still, it was a positive session, which is pretty encouraging given that dip you saw, include oil prices as well, overnight, and these expectations of another rate hike. So getting to the themes, I should say of the day,

2:06it really is this AI Spark measure. The Facebook owner's app muse is the number one free app on the Apple Store in the US. So really just suggesting, look, the AI trade is not dead. It had a rally overnight of more than 11 percent. You saw AMD hitting a trillion US dollars in market cap. We saw the likes of arm holdings, up 17 percent, Intel, up 12 percent. Had a really good chat with Hattam Deer from Gerber, Kawasaki about all of those names you can find on the website. Also, a little bit of digging deals here. We heard from Capstone Copper and Global Lithium, which is a standout, up more than 50 percent. So we're continuing to focus in on the resources sector. And Nadine had a good chat to Charles's story earlier today about the fact that at least for now, the Aussie market is certainly still the resources taking the lead. And Rhyme to Hike, where we heard from Governor Michelle Bullock on Friday. We heard from her again today, warning that inflation expectations must remain anchored, making her final public remarks

3:10ahead of next week's interest rate decision. Now, Bullock was speaking in Sydney ahead of this week's jobs report, really indicating that higher unemployment may be what eventually tames the inflation dragon. There's no particular level at which I think we can get to. I think between four and a half and five will probably take enough heat out of the labour market that Italy's pressure on inflation. But the whole point about inflation being too high at the moment is it's reflecting the fact that the demand side of the economy is outstripping the ability of the economy to supply the goods and services. And one evidence of that is that the labour market looks tight. And money markets are really pricing in a near certainty of a rate high next week to bring the cash rate to 4.6 percent, which is keeping the Aussie dollar very well anchored, although it had a bit of a dip at 1130, it looks like there today. All right, let's have a quick look at some of the sectors. I mentioned tech was the standout. No surprise considering what we saw on

4:11the NASDAQ zero wise tech, life 360 tech one next DC all looking good. Let's have a look at those consumer discretionary stocks though as we face potentially more rate high. So, Levisa doing well bucking that downward trend up almost five percent. Quick clue with the boards to have a look at some of the others, which are mostly weaker, including Temple and Webster. The furniture retailer down almost two percent. And look at the begin of town with mining giant BHP up more than $61, Rio, $10, $166.40. And I mentioned that there was quite a lot of corporate news in the materials sector, but let's also have a look at what TILICS is doing. It does look lower, but we know that it was actually doing better so that might be the US listed shares there because City did call its $3.3 billion acquisition strategic following a plunge in the prior session. Global lithium resources rocketing. Yeah, where we check that down because global lithium resources I think is up by about 50 percent. So there might be a little bit of a bug going in to some of those at the

5:13moment, but tungsten minerals are it's also in focus announcing a $50 million institutional placement priced at $32 cents a share and capstone copper in focus as well after selling a mine in Mexico for around $385 million and sunrise energy metals added to the S&P ASX 200 shares up 12 and a half percent. All right, let's welcome to the COB market gardener from MPC markets. Mark kicking it off I guess with what we're pretty much pricing him, which is a rate hike from the RBA next week. Yeah, and just for the record, yes, that was the US TILICS price. We are holders of TILICS, so we're that's up about 7 percent today. Yeah, look, but I mean, I think it's pretty clear we're going to get a rate hike next week. Global central banks are hiking and you know, you're looking at the US probably too. They're even talking three. It'll probably only be two I'd say. And we've had the ECB hiking as well. So overall, I don't think that's changing any time soon.

6:15We've had the impact of inflation come through oil. While it's come off its highs, I mean, we're still in the mid 90s. I think there's been a slight rally today. But even the fringe commodities, I think a lot of softs, livestock, things like copper, etc. have all made a ball made a move higher in the last six months. So prices aren't coming down any time soon, particularly with diesel prices, escalating globally, you know, just about everywhere. And you know, this energy crisis is really far from over. I think there was some general optimism overnight because the UN General Assembly is coming in that Trump made pull a rabbit out of it this week. But I think that's a bit of a long shot if I'm going to be honest. Yeah, indeed. All right. Well, Mark, let's talk as well about some of the the stocks and we, and you touched there on the fact that yes, we did have the wrong tillics up there. But in terms of some of the other big movers, so global lithium, a $333 million take over here, Middle East take over. What does that tell us more broadly about, you know, the hunt

7:17for Australian resources? I think the critical mineral story is not over. It's just been really forgotten about. I think I wrote an, um, and usually, um, I don't know a few months ago, but we're very much looking at critical minerals still at the moment, particularly rare earths. And, you know, there's a US ETF, which were quite fond of REMX, which is a febidolythium and rare earths. But we obviously, you know, we need to win ourselves off, um, trying to refining and producing all of these. And particularly that's the US's focus and that's where they're gone with the Greenland thing as well. But I think they're, I think they're extraordinarily cheap. And from a strategic standpoint, and you're talking very, very long term, um, these, I think you'll probably look back and, and think, and these prices for most of these lithium companies and lithium in general. And the one, particularly the ones with the downstream, um, and the refining, and, and, and look back and save their cheap were they overall. So, um, there's a few names in the States like MP

8:21materials, um, and quadriple use the ticker, um, as well. But they're, you know, that we, we've really pushed towards ones that are, that are looking at doing that downstream refining, um, and, and with the finished product and things. So, but the raw materials are still going to be scrambled for, um, and flash and is usually good for heart assets. Right. So away from resources, let's get back and bring it full circle to the tech story here. You and I have talked a lot about AI. There's been all these, you know, doomsdayers of late that it's going to take over humanity. The AI trade is slowing down. Um, certainly when you look at the action overnight from Wall Street everybody was like, well, I don't think so. It's, it's still there. Well, I mean, it was, they were buying the agentic AI stocks, which, you know, if they, they, they will be the ones if, um, you know, if, if Armageddon plays out, um, that'll do it. So we've been really focused on, and, and, you know, the, and the chip makers as well got bored by that last night because, you know, the agentic AI uses different sorts of, um, chips. They're, um, instead of the GPUs,

9:25they're more on the CPUs. They do use a little bit more memory of, um, in some cases as well. So we've, we've looked at some, um, alternative chip makers. Um, we've been long-lone, cyber security sector for quite some time. That was a very good opportunity in the SaaS POC ellipse because we're going to need more governance and security. Um, and I think going moving forward, um, now you need to be looking at, um, you know, very Alex Carp's a very hard person to like, and, you know, based on his media performance, but, you know, a company like Palantir is good for governance, Git Labs, good for governance. I think a lot of these, you'd have to go and check individual ETFs, but, um, but I think, you know, bug or, um, cyber on the ASX, if you haven't got access to the US, um, we'll have quite a few of those in there at the moment. So, um, yeah, we need, we need, um, software or products that are going to control this, or, or, or it, very, the very minimum monitor it. Um, and then we're probably going to start moving away from the data center, um, theme and, you know, and the build out necessarily. I think a lot of

10:30that's very priced in, um, and the GPU story because large language models aren't necessarily the massive, um, priority of the moment. It's delivering these things and monetising on these things so they can pay for their capex. And that's really what that meta, um, you know, the agentic model from meta, um, is sort of saying. So you saw AMD, um, microns, SK, HINECs, and, um, and ARM, holdings, etc, which are very much in that inference area. I would expect Google to get a bit of a bid tone from it as well. Um, but yeah, the, the, it's sort of, we're heading towards the early stages of the next phase of this AI trade. And, um, I think you know, people need to be making sure they're not stuffed with a bunch of the older stuff that work last year and go into, um, you know, start looking at the things that are going to be the next winners. Indeed. All right. Well, we're always looking for the next winners and we'll continue to do so, Mark. Always appreciate your time. Thank you so much, Mark Gardiner there from NPC Market, staying stock specific. The stock of the day on the call was Hello World Travel, and the Dean spoke to our experts, Philip Pepe from Shore & Partners, Andrew Coleman from Team Invest.

11:40This is a highly cash-generating business. So there's now picked up more care. And remember, their customer base pays up front. So they're not chasing bad debts. Feel booking a holiday. You pay before your bump hits the seat. So they, they will have the cash vibe next for you to pay it down. Some of that is to the vendor. So the vendor's taking equity and, I think, 25% in equity, 25% in vendor finance. So they're prepared to back the company. So I will draw that at them issued debt at the current share price in equity because then it will be more EPS dilutive. But it seems like a good transaction. EPS or CREDI will find out, um, I think in November, they're annual generating. They'll give guidance for the group, which will include the acquisition. I'm expecting it to be bullish. So fingers crossed, I think it's a buy. I take your point and I think it's very well made that if you're trading at sort of three, four year lows, it's the wrong time to be issuing equity if you believe in your story. So I think overall I just put it in the too hard basket. If you own it already, clearly you see value in what they're doing. I don't think this is a reason to sell. And if you don't own it, I think to

12:43do the extra work to understand it at this point of time is going to be more work than it's worth. Who do you trust for investing ideas? Algorithms, AI, guess word, or verified experts? Osbus Plus is your home of investing intelligence powered by people matched by AI tuned to what you like. People create AI connects you discover. The next generation of Osbus is here. Visit osbusplus.com.au to learn more and join Australia's new home of verified investing intelligence. You get Osbus, Osbus Plus gets you. Smallcaps Big Ideas is back for 2026. Experts, stockpickers, high-conviction ideas,

13:53and the CEOs they trust to deliver. You'll also hear from a small cap valuation panel and get extra data and intelligence from Osbus Plus. Register now at osbus.co slash small cap 26 or scan the QR code. All right, let's have a look at some of the market leaders. The market has shut now. So, Sunrise Energy Metals, I was mentioning, has been added to the S&P ASX. 200 index sending it shares up by 12.5%. TILICS also had a good day. We've had that German acquisition, some broker upgrades as well. Electrooptic systems in genia and Firefly Metals as well. To the downside though, today included quite a few in the energy space, also drone shield coming off down by around 3%. Let's have a look at the small end of town kicking it off with the global eth which was up by 43%. I think that's global lithium, the one that I was talking about before. That is on that middle east takeover. It is surged on this $333 million deal and flipping it over

14:59on the other side of the board energy transition down by about 14%. Let's have a look at what is happening tonight and you get the US Richmond manufacturing index and also the ECB President Christine Lagarde will be speaking. Well, tomorrow we've got the Judah Bank Manufacturing PMI earnings from two ASS and a few more companies going X-DV, including Atlas, Arteria, Genesis and St. Barbara. A final check on where the local market has finished the day's trade. A third of four percent higher there on the S&P ASS, sorry the CBO 200, while the S&P ASS200 is also been by a third of one percent 26.8757 points. Well, that is where we leave you. We'll see you from 9.45 AM Eastern tomorrow. The C.O.B is brought to you by Longview, a new way for investors to access Australian residential

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