☕️ Heaven bound

Good morning.

Global markets are defaulting to haven-first assets as the Middle East conflict intensifies, with the expanding hostilities and the risk to oil flows driving a sharp shift out of risk. The US dollar is surging, the Swiss franc is firmer, and the Australian dollar and rand are leading losses among risk currencies. Saudi and Egyptian equities already fell more than 2% in Sunday trading.

Oil is the fulcrum. Bloomberg sees crude at USD80 in a prolonged conflict and as high as USD108 in the event of a sustained closure of the Strait of Hormuz.

A pity, because back home listed Aussie companies have just posted their second-strongest upgrade season in 51 periods, Capital Brief reported. So even with FY26 earnings tracking to double-digit growth and more than $35 billion in dividends declared, the ASX this morning looks to open decidedly lower.

🏆 LOI Subscriber #TBD

Market movers

Shares in Block soared after the Square and Afterpay owner said it would cut 4,000 of its roughly 10,000 staff as gross profit rose 17% to USD10.36 billion in 2025. The rally helped lift the ASX 200 to a record close of 9,198.6, capping its strongest monthly gain since May.

The quick sync

• The Albanese government’s EV road-user charge appears stalled before the May Budget. (Capital Brief)

• Iran strikes threaten an oil spike and inflation shock just as Australia heads into a stronger December quarter GDP print. (Capital Brief)

• In a week of AI anxiety, Block announced cuts of almost half its workforce to chase efficiency gains. Investors want more (Capital Brief)

• AUSTRAC is investigating whether potentially fraudulent CBA home loans were used to launder criminal proceeds through property. (Capital Brief)

• Ley’s resignation has ignited a four way Farrer contest that will test Coalition unity and One Nation’s surge. (Capital Brief)

Trading floor

M&A

• The Takeovers Panel accepted Humm’s undertaking on the Credit Corp bid and is continuing its probe. (Capital Brief)

• Abu Dhabi sells Sydney Darling Harbour Novotel and Ibis hotels to Wentworth Capital for $390m. (AFR)

• Benson Radiology may sell to Crescent Capital for ~$330m after IFM deal collapsed. (The Australian)

• Hills Hoist may be sold as Griffon exits non-US consumer products. (AFR)

• Warner Bros to be acquired by Paramount Skydance for USD110b after Netflix passes. (Capital Brief)

• Chemist Warehouse founders could sell Sigma shares after strong profits, with key investors also monitored for block trades. (The Australian)

• Hoyts sells Val Morgan to Richard White-backed Vinyl Group for $10.5m. (AFR)

• Perpetual nears $400–$500m sale of wealth unit to Bain Capital after strong results. (The Australian)

• InStitchu cuts deal with Dayang Group to fuel growth and simplify operations. (AFR)

Capital Markets

• Virgin Australia’s reported profit fell, but underlying earnings and revenue increased amid cost pressures. (Capital Brief)

• L1 Group launches roadshow for ASX-listed gold and precious metals fund. (AFR)

• PEXA shares rose as earnings beat forecasts despite a half-year loss. (Capital Brief)

• TPG Telecom swung to a $461m profit, boosted by its Optus network-sharing deal. (Capital Brief)

• Coles shares slid after weak 2H trading and a fall in first-half profit. (Capital Brief)

• Block shares jumped after announcing 4,000 AI-driven job cuts and strong profit growth. (Capital Brief)

• Stonepeak takes 50% stake in Aura’s Queensland retirement villages. (AFR)

• Harvey Norman lifted interim profit 15% on stronger sales and performance. (Capital Brief)

• Mesoblast cut its half-year loss as Ryoncil sales lifted revenue. (Capital Brief)

• Neuren’s FY profit dropped to $30m despite solid Daybue sales. (Capital Brief)

• Bapcor raised $157m via institutional placement after reporting a H1 loss. (Capital Brief)

• Macquarie Technology shares rise on 22nd consecutive half of EBITDA growth. (Capital Brief)

• Star Entertainment CEO Bruce Mathieson Jr aims to cut costs amid a 4% revenue drop. (AFR)

• AUSTRAC probes CBA home loans flagged as potentially fraudulent for money laundering risks. (Capital Brief)

• OpenAI raises USD110b led by Amazon, Nvidia, and Softbank, reaching USD840b valuation. (Capital Brief)

• Iran conflict disrupts Hormuz oil traffic, OPEC+ lifts output, and missile strikes kill eight in Israel. (Capital Brief)

• ASX earnings season was one of the strongest in decades despite AI gloom. (Capital Brief)

• JPMorgan cuts services for Citadel Securities in clash over roles. (FT)

• Collapse of UK property lender MFS sends shockwaves through Wall Street. (FT)

• DeepSeek to release long-awaited AI model in new challenge to US rivals. (FT)

VC 

• Firmable raises $16m, doubling valuation to ~$100m despite AI concerns. (AFR)

People moves

• NextDC CEO Craig Scroggie has been named inaugural chair of Data Centres Australia. (Capital Brief)

• Ex-COO Kristian Haigh sues Kelly+Partners founder Brett Kelly for $10m, alleging abuse and forced resignation over a bonus dispute. (AFR)

• Sussan Ley resigns immediately, ending 25-year political career. (Capital Brief) (Capital Brief)

• Foxtel CEO Patrick Delany may take a larger role at DAZN after its $3.4b acquisition and cost cuts. (AFR)

• Block CEO Jack Dorsey cuts nearly half the workforce to boost AI efficiency. (Capital Brief)

The watercooler