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Speaker 1: Today on Fear and Greed. The local share market tops

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Speaker 1: eighty five hundred points for the first time ever.

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Speaker 2: The founder of.

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Speaker 1: Buy Now, Pay Later group Zipco cashes in and heads

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Speaker 1: off to do his own thing and to judge in

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Speaker 1: the US once again knocks back a fifty six billion

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Speaker 1: US dollar payday for Elon Musk. Plus more on the

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Speaker 1: strike by Woolly's warehouse workers and why Kansas loves baby Boomers.

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Speaker 1: Welcome to Fear and Greed. Daily business news for people

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Speaker 1: who make their own decisions. It is Wednesday, the fourth

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Speaker 1: of December twenty twenty four. I'm Michael Thompson and good morning,

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Speaker 1: Sean Aylmer.

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Speaker 2: Good morning, Michael, Sean.

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Speaker 1: The main story this morning. As a cracker, the Australian

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Speaker 1: share market has topped eighty five hundred points for the

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Speaker 1: first time, taking full year gains to more than eleven percent.

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Speaker 2: Confidence that Australia's economy will avoid a recession and continue

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Speaker 2: to grow, Hopes that interest rates will start falling next year.

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Speaker 2: A relatively optimistic outlook for the global of con me

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Speaker 2: is pushing the market to new highs. There's a bunch

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Speaker 2: of companies training at or near record levels. In fact,

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Speaker 2: nine of The top twenty five companies on the ASEX

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Speaker 2: from a broad range of sectors are at highs Goodwin Group, Macquarie, Aristocrat, Leisure, Weis,

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Speaker 2: Tech Global, Aria, Zero, Brambles, Promedicus, and of course Commonwealth Bank,

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Speaker 2: the biggest stock on the market now worth two hundred

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Speaker 2: and sixty five billion dollars, nearly thirty percent more than

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Speaker 2: number two BHP. The anly real disappointment over the past

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Speaker 2: year or so have been the big miners and the

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Speaker 2: energy companies, and that's on the back of commodity prices.

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Speaker 2: There are actually now some one time blue chip companies

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Speaker 2: that really wore downtrollin that are now performing really well

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Speaker 2: over the past year. AMP, for example, is up seventy percent.

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Speaker 2: JB High Fire is ninety percent higher. Quantus Training at

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Speaker 2: record high, up sixty five percent over the past year.

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Speaker 1: Now, Sean, you've taught me over a long period of time,

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Speaker 1: now that equities are traded on future.

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Speaker 2: Earnings, Michael, Michael, you learned.

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Speaker 1: I not only learned. I listen, I take notes, I study.

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Speaker 1: I'm determined to prove myself to you. So basically, so

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Speaker 1: a share price reflects what investors think is going to happen. Right.

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Speaker 1: So if you kind of just look at that then

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Speaker 1: and look at what the market is doing, it seems

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Speaker 1: like investors are confident about the future.

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Speaker 2: Right There certainly seems to be a sense that the

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Speaker 2: economy has bottomed, even though interest rates are still at

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Speaker 2: twelve year highs. We'll find out more about that today

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Speaker 2: with the release of the economic growth figures for the

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Speaker 2: September quarter. Economists are expecting jump of zero point three

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Speaker 2: point four point five percent. I would say that compares

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Speaker 2: to the zero point two percent increase in the due quarter.

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Speaker 2: Will still probably be in a per capita recession. The

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Speaker 2: reason we are growing is because of the high migration rates,

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Speaker 2: so we're in a per capita recession. That's why it

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Speaker 2: feels sometimes like times are particularly tough, but market makers

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Speaker 2: investors are confident that the worst seems to be over

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Speaker 2: and that's what keeps pushing the local market higher.

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Speaker 1: Just in the interest of decoding jargon, as we go

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Speaker 1: through per capita recession, what does that mean?

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Speaker 2: So we have economic growth of let's say half percent,

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Speaker 2: if you break that up into individuals, so per capital

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Speaker 2: per person we have been going. But if you base

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Speaker 2: it on a per person basis, we're actually been going

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Speaker 2: backwards for the last two quarters all this year. In fact,

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Speaker 2: the reason the top line number looks good is we

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Speaker 2: have had this huge migration more people. Therefore, overall the

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Speaker 2: top line number has gone up, but if you split

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Speaker 2: it per person, we've gone backwards.

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Speaker 1: Okay, thank you for the explanation. Now, Sean, before we

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Speaker 1: leave the local market. We talked about the record high yesterday,

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Speaker 1: but where did it actually finish up? Oh?

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Speaker 2: I was very excited. I thought it would finish above

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Speaker 2: that eighty five hundred point marre. For those who don't

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Speaker 2: follow the markets, that's a pretty significant thing. But alas

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Speaker 2: in the final few minutes it fell. It finished about

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Speaker 2: half percent higher at eight thousand, four hundred and ninety

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Speaker 2: five points, a record close but not quite at eighty

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Speaker 2: five hundred points. Pro Medicus led the way along among

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Speaker 2: the large caps. That's an imaging company. It raised more

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Speaker 2: than three percent. Minor four ESCU metals area that's the

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Speaker 2: online property group, QB, the insurer, Brambles, the palette company,

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Speaker 2: risktrat Leisure, the gaming machine manufacturer. They all raise around

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Speaker 2: two percent. Worst of the large caps were software group,

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Speaker 2: Wistech Global and Woolli's a little bit of corporate news around.

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Speaker 2: Michael Starr Entertainment expects to receive the first one hundred

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Speaker 2: million dollars of a two hundred million dollar debt facility

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Speaker 2: next week. After the casino group met preordained conditions, its

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Speaker 2: share price jump nine percent, best of the top two hundred.

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Speaker 1: But wow, is this the debt facility that comes with massive,

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Speaker 1: massive interest rate? Is it something about thirteen percent or something.

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Speaker 2: Off the top of my head. I can't remember quite

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Speaker 2: what it was, but it is huge interest rate. Definitely extraordinary.

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Speaker 1: I suppose desperate times though.

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Speaker 2: Right, yeah, absolutely it needs money. Insurance broke A Steadfast

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Speaker 2: Group share price rose three percent after an internal review

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Speaker 2: found no evidence of improper incentives or compliance manipulation. If

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Speaker 2: you're gonna have a review, you may as well make

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Speaker 2: it an internal review, don't you reckon? And that nothing

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Speaker 2: against Steadfast here. I'm sure that it was all fine.

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Speaker 1: But you know, investigate your own problems first, and now, look,

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Speaker 1: we're all clear anyway, So yes, let's go on.

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Speaker 2: Let's go on. Metcsh' share price jump is seven and

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Speaker 2: a half percent. Met Cash is the wholesale for groups

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Speaker 2: like IJ and Richies and a couple of hardware stores.

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Speaker 2: So we share price jump seven and a half percent

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Speaker 2: after investment analysts upgraded the stock following Monday's half year earnings.

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Speaker 2: And just before we leave the finance world, I suppose

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Speaker 2: a couple of smaller super funds, Telstra Super and Equipped Super,

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Speaker 2: they'll merged create a fund with sixty billion dollars under

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Speaker 2: management and two hundred and twenty five thousand members.

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Speaker 1: That has been the trend, hasn't it over quite some

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Speaker 1: time now? It's this consolidation of the industry.

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Speaker 2: Right, Yeah, it sure has, and it's been encouraged by regulators,

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Speaker 2: and the funds are doing it more and more frequently

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Speaker 2: at the moment.

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Speaker 1: Now, can we just talk quickly about Quantus pause. You

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Speaker 1: mentioned Quantas hit a record share price yesterday. One broker

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Speaker 1: reckons it's only going to get better though, thanks to

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Speaker 1: traveling baby boomers.

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Speaker 2: Yes, that broker is from investment bank Morgan Stanley. They

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Speaker 2: reckon Quantas and Delta Airlines are two global carriers benefiting

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Speaker 2: and will benefit more from a pivot in luxury spending

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Speaker 2: from basically handbags and clothing to premium travel. There's a

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Speaker 2: real switch going on. According to Morgan Stanley, Global Luxury

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Speaker 2: companies like Carrying Montclab LVMH. They boomed post COVID, but

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Speaker 2: in part due to a slow down in Chinese demach

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Speaker 2: Chinese consumers are not spending like they used to. Some

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Speaker 2: of those luxury companies are really struggling. The analysts reckon

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Speaker 2: that the shift is on to travel, particularly baby boomers.

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Speaker 2: They reckon Counaissant Delta are set to ride the next

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Speaker 2: wave of luxury spending. Now counts of the share price

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Speaker 2: closed up two percent yesterday to nine dollars and three

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Speaker 2: At its worst during COVID, it was trading at about

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Speaker 2: twenty five percent of yesterday's close. I think it was

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Speaker 2: two dollars thirty two dollars forty or something like that.

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Speaker 2: It's now nine dollars and three cents. Quite an incredible ride.

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Speaker 2: And what the guy from Morgan Stanley is saying is

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Speaker 2: that the baby boomers out there, we know there's two

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Speaker 2: and a half million of those people retiring over the

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Speaker 2: next ten years. They've got lots of money and they're

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Speaker 2: going to spend it traveling.

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Speaker 1: Sean, just tell us quickly about the interview that you

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Speaker 1: have coming up after the show. You are speaking with

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Speaker 1: Josh Simon's the CEO of Vinyl Group, which is a

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Speaker 1: really interesting company it is.

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Speaker 2: It's got Vinyl dot Com, it's got Jackstar, it's got Vampire,

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Speaker 2: it's got Serenade, Brag Media, which is Rolling Stone and Variety.

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Speaker 2: So it's got it is all related around music and

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Speaker 2: popular music, but all sorts of different aspects of it.

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Speaker 2: And so we talked to Josh about what's in the group.

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Speaker 2: It's listed obviously, how he runs it. We also talk

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Speaker 2: about his biggest shareholder, Richard White of Weis Tech Global fame.

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Speaker 2: He's had a few challenges himself. We're ask him about

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Speaker 2: Richard White and his interest in Final Group. It's just

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Speaker 2: a great chat.

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Speaker 1: Yeah, it's a good conversation that is coming up after

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Speaker 1: the show. Before that, though, Sean, we've got plenty still

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Speaker 1: to cover. The latest on the Woolworth strikes. We've got

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Speaker 1: the founder who's selling up to the tune of one

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Speaker 1: hundred million dollars. We've got the court decision against Elon Musks,

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Speaker 1: so much more to get to. We'll be back in

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Speaker 1: a moment with the rest of the day's business news.

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Speaker 1: Sean Woolworth's says the strike by warehouse workers in Victoria

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Speaker 1: and New South Wales has cut fifty million dollars in

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Speaker 1: sales from its supermarket business.

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Speaker 2: And counting big problem for Woolies. As we discussed yesterday,

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Speaker 2: it is struggling to keep stock on shells that includes

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Speaker 2: some liquor outlets now. Woolies spun out in Deavor Group

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Speaker 2: over the past a couple of years ago, and Devor

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Speaker 2: Group owns Dan Murphys in BWS. They still use the

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Speaker 2: same warehouse facility. The problem is that Dan Murphy's and

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Speaker 2: BWS and now being hit by this strike and stock

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Speaker 2: is laid there as well. Yesterday, Willies applied for an

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Speaker 2: urgent order to ensure access to distribution sites in the

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Speaker 2: two states. It said it's been negotiating with the United

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Speaker 2: Workers Union for four months. The work has won a

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Speaker 2: pay increase of well over twenty five percent over three years,

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Speaker 2: that's well above inflation. The union also wants Woolies to

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Speaker 2: scrap new rules which would discipline workers for not operating

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Speaker 2: fast enough. That's the pointy end of this dispute. It's

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Speaker 2: coming as the company itself is under pressure to keep

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Speaker 2: prices lover, with the HBLEC watching its behavior very closely.

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Speaker 2: November Desamber very busy time for Woolies and for Endeavor Group.

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Speaker 2: Of course, what they do don't want to do is

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Speaker 2: have this drag on for much longer then suddenly have

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Speaker 2: to rebuild inventory in the run up to Christmas, because

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Speaker 2: that takes time. And Michael, there's only about three weeks

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Speaker 2: till Christmas.

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Speaker 1: And counting Sean. Now, this next story is it's really,

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Speaker 1: it's quite it's aspirational, and it's inspiring for anyone who

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Speaker 1: started their own business right at any point. The founder

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Speaker 1: of Buy Now, Pay Later Group ZIP has resigned. He's

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Speaker 1: cashing in one hundred million dollars worth of shares and

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Speaker 1: he's going to set up his own family office investing business.

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Speaker 2: Wouldn't you do that? Oh?

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Speaker 1: Absolutely, Actually, I don't know whether i'd set up a

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Speaker 1: family office investing business. I think I'll just lie on

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Speaker 1: the beach and just yeah, the terrible financial advice. I

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Speaker 1: just live off the interest of my of my one

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Speaker 1: hundred million dollars.

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Speaker 2: I think that's an excellent idea. The guy's name is

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Speaker 2: Larry Diamond. He resigned on Monday yesterday. He sold thirty

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Speaker 2: million shares at three dollars thirty five apiece. According to

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Speaker 2: the finn Review. He still has twenty five million shares,

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Speaker 2: so that's another one hundred million or so. He founded

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Speaker 2: the business in twenty thirteen with a guy called Peter Gray,

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Speaker 2: floated in twenty sixteen. It got as high as twelve

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Speaker 2: dollars a share in early COVID days when the buy now,

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Speaker 2: pay later boom was on. Of course after pay was

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Speaker 2: the big one there that was eventually bought by Block.

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Speaker 2: It then tumbled to as low as twenty six cents

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Speaker 2: late last year. Zipko really was in dire straits. Since then,

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Speaker 2: it's up seven hundred percent, the best of the top

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Speaker 2: two hundred over the last twelve days. So mister Diamond,

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Speaker 2: he's cashing out. Good on him, Yeah, well played.

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Speaker 1: I mean he's earned. It's a that is a rollercoaster ride,

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Speaker 1: isn't it. The nerves and the stress of trying to

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Speaker 1: build that business and follow it all the way through.

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Speaker 1: He's definitely earned this. Now, this is a fascinating one

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Speaker 1: on law firms are going into non legal advice, picking

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Speaker 1: up business and partners really as well from the big

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Speaker 1: four consultancy firms as they pushed beyond really what is

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Speaker 1: their traditional service lines exactly.

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Speaker 2: Mitter Ellison ten percent of its fee owners are now consultants.

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Speaker 2: According to the Finn Review, the trend is for clients

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Speaker 2: looking to legal firms to provide consultancy work as they

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Speaker 2: shy away, not dessert, but shy away from the big

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Speaker 2: four consultancy groups. We're talking Deloitte, Ey, PwC and KPMG.

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Speaker 2: Other law firms now offering consulting style services include Ashurst, Clainton,

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Speaker 2: Newts and King and Wood Mallisons. So that's four very

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Speaker 2: large law firms now in consultancy.

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Speaker 1: Time for an economics lesson here, Sean, I feel like

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Speaker 1: I need a little bell to ring. Remember John Laws

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Speaker 1: with the cow bell kind of thing in the in

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Speaker 1: the studio. Maybe not might be a slightly obscure reference here,

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Speaker 1: but as soon as we mentioned economics, I feel like

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Speaker 1: I need a bell now because I know I'm going

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Speaker 1: to get a lesson. Australia's trade surplus fell to its

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Speaker 1: lowest level in six years during the September quarter.

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Speaker 2: This matters, Sean, it does matter. Export prices fell mostly

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Speaker 2: iron ore and coal to blame for that one. Now,

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Speaker 2: I am going going to have to give you a

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Speaker 2: bit of an economics lesson. So the current account balance

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Speaker 2: is all important. It feeds into economic growth. What's the

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Speaker 2: current account balance, Well, that's the trade balance that you

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Speaker 2: just talked about, plus payments laid made to local and

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Speaker 2: foreign investors, they dividends and sort of shifting of finances

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Speaker 2: across borders and all that, plus other stuff like foreign aid.

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Speaker 2: So you got trade sort of payments, slash, dividends, foreign aid.

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Speaker 2: Put all that together. Deficit of fourteen point one billion

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Speaker 2: dollars higher than expected. That actually detracts from economic growth.

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Speaker 2: So we talked about earlier in the show economic growth

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Speaker 2: being point three point four point five. When you get

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Speaker 2: a big deficit in the current account balance, it detracts

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Speaker 2: from growth. Of course, the September quarter GDP's to you

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Speaker 2: have released this morning will find out how much it's

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Speaker 2: subtracted from growth.

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Speaker 1: Then Colin's Foods better known to really to most of

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Speaker 1: us as the licensee of a bunch of KFC stores

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Speaker 1: in Australia, and Tucker I think as well, isn't it

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Speaker 1: yesterday warned on downbeat consumer spending and a squeeze in

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Speaker 1: profit margins. Hopefully not to the point where they remember

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Speaker 1: when they had to use habage.

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Speaker 2: Instead of haavage instead of letters.

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Speaker 1: Yes, yeah, that wasn't a profit related thing. That a

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Speaker 1: less shortage.

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Speaker 2: But yeah no, I think there's a price for the letters

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Speaker 2: went through the roofs. I'm calling it profit related.

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Speaker 1: Great, I'm on board with that.

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Speaker 2: Please go on Colin's food zones two hundred and eighty

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Speaker 2: five of the seven hundred and fifty KFC outlets in Australia.

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Speaker 2: It's also got seventy four stores in Netherlands. In the

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Speaker 2: Netherlands and Germany. You're right it does. It has twenty

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Speaker 2: seven Taco Bell stores in Australia. Its net profit fell

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Speaker 2: more than fifty percent in the half year to October thirteen.

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Speaker 2: It had to cut its half year dividend as a result.

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Speaker 2: Same store sales in Australia during that six month period

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Speaker 2: were flat. All important same store sales because what they're

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Speaker 2: comparing are stores in the same sorry, are comparing sales

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Speaker 2: in the same number of stores. So even if they

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Speaker 2: increased the number of stores, not counting it in that

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Speaker 2: so it actually shows your gross rates. Same store sales anyway,

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Speaker 2: flat and Australia down in Europe. Tough market that one,

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Speaker 2: because Minny Gomez that's growing doing all those drive throughs

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Speaker 2: We've been talking about that a bit. A bunch of

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Speaker 2: Korean style fried chicken groups around. That's on top of

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Speaker 2: McDonald's and Subway, Domino's, PiZZ Art, et cetera. Colins Food's

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Speaker 2: share price yesterday closed down three percent.

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Speaker 1: All right, turning to International news now showing the boss

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Speaker 1: of Intel, which is of course the one time leader

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Speaker 1: in chip making, has been forced out of the group's board,

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Speaker 1: while Samsung have teamed up with Jeff Bezos, the Amazon founder,

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Speaker 1: to invest in a Nvidia rival.

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Speaker 2: Do I love about that? How many companies can we

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Speaker 2: get in one sentence? So Intel, Samsung, Amazon, and idiot

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Speaker 2: I like it?

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Speaker 1: That's a lot.

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Speaker 2: Yeah. The common theme here chips micro chips. Now, of

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Speaker 2: course Intel was the market leader. It never sold to

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Speaker 2: anyone else. It was everything. Well, hasn't it been left

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Speaker 2: behind by Nvidia? It used to be the big company.

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Speaker 2: Now Intel's worth one hundred billion US dollars and Nvidia

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Speaker 2: is worth three point four trillion US dollar. Someone had

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Speaker 2: to go. Intel's boss, Pat Gelsinger, took the top jobs

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Speaker 2: three months ago. He vowed to restore its pre eminence,

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Speaker 2: alas the AI boom has largely passed Intel by its

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Speaker 2: share prices tumbled as a result. Goodbye to mister Gelsinger.

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Speaker 2: Turning to the Amazon Bezos steel, they've invested in a

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Speaker 2: company called tens Torrent. It basically hopes to take on

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Speaker 2: in VideA. With a lot of these new themes and

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Speaker 2: AI obviously being a massive one, it takes a long

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Speaker 2: time for companies to make money. Now in AI really

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Speaker 2: only one company and video has made a serious amount

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Speaker 2: of money thus far. The second generation companies, which presumably

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Speaker 2: Samsung and mister Bezos, is hoping Ten's Torrent is the

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Speaker 2: idea that they'll be able to turn around chips fairly

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Speaker 2: quickly and match at least match in video is what

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Speaker 2: they're hoping for. It would be interesting to see if

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Speaker 2: it happens.

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Speaker 1: So they're really just hoping to chip away in videos dominance.

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Speaker 2: That was lazy.

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Speaker 1: That was horrible.

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Speaker 2: That was lazy. That wasn't good.

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Speaker 1: No, that was why, Like when you started this story,

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Speaker 1: I was like, there is an opportunity here, and I

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Speaker 1: couldn't think of anything, and that's why I was silent

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Speaker 1: while you were talking. And then after all that time,

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Speaker 1: I still didn't deliver. I feel like I failed you.

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Speaker 2: Any new listeners this morning occasionally Michael breaks out into

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Speaker 2: a pun filled rant, a pun frenzy, a pun frenzy,

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Speaker 2: and I do apologize for it. Please don't turn us

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Speaker 2: off for it. He gets over it.

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Speaker 1: It's fleeting. It's always brief. Now the story that I

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Speaker 1: mentioned at the top of the show, this is just extraordinary.

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Speaker 1: A judge in Delaware has knocked back Tesla's attempt to

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Speaker 1: revive a fifty six billion US dollar as billion with

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Speaker 1: a B billion dollar pay package for Elon Musk, saying

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Speaker 1: that shareholder's overwhelming reapproval was not enough to override her

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Speaker 1: previous rejection of the package.

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Speaker 2: This has been a bit of a saga. Judge Kathleen

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Speaker 2: McCormick concluded that Tesla's unprecedented effort to push the twenty

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Speaker 2: eighteen pay package through a second time, four months after

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Speaker 2: she first voided it was creative her word, but the

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Speaker 2: board had no ground to overturn her original outcome. According

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Speaker 2: to a story in The Financial Times, Tesla, after finding

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Speaker 2: immediately vowed to appeal against the decision. Mister Musk's response

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Speaker 2: on X was almost Trump esque. I'd say all he

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Speaker 2: said absolute corruption? Did he say it in all caps?

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Speaker 2: Though he didn't only capital A. The punctuation was correct,

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Speaker 2: So not totally like there's a full stop at the end,

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Speaker 2: not totally Trump esque give him, but he'll get there.

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Speaker 2: He'll get It's a shame, isn't it? The Donald? Well,

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Speaker 2: let's like go it down that path tells The stock

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Speaker 2: has searched forty four percent this year, much of that

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Speaker 2: coming after Donald Trump's election victory. That means mister Musk's

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Speaker 2: stock options have gone from fifty six billion dollars when

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Speaker 2: they were avoided in January to more than one hundred

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Speaker 2: billion dollars. That actually, if he owned them, would put

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Speaker 2: his wealth at about three hundred and forty three billion dollars.

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Speaker 2: In that it obviously includes his stakes and SpaceX X

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Speaker 2: and XAI three hundred and forty three billion dollars. If

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Speaker 2: he's ultimately granted the package, he'd end up owning more

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Speaker 2: than twenty percent of Tesla, up from his thirteen percent currently.

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Speaker 1: All right, now, a tip for new listeners. You did

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Speaker 1: hear Sean just say it's a shame, and he was

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Speaker 1: about to You're about to share an opinion, a bit

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Speaker 1: of a hot take, a bit of a spicy you

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Speaker 1: kind of opinion on something. Those come out in our newsletter.

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Speaker 1: They are not generally part of the podcast. The podcast

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Speaker 1: is all just pretty straight news. If you want the opinions,

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Speaker 1: if you want the context and why things matter and

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Speaker 1: what Sean really thinks about it. Our newsletter comes out

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Speaker 1: every Wednesday. Head along to Fearangreed dot com dot au

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Speaker 1: to sign up. So what's coming out and just in

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Speaker 1: mere hours and maybe we'll find out what words come

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Speaker 1: after it's a shame maybe maybe who knows it?

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Speaker 2: Maybe I will too? Yeah, you're right, heah, there we go,

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Speaker 2: all right.

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Speaker 1: Also up next is the Fear and Greed Daily Interview.

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Speaker 1: Josh Simon's from Vinyl Group is our guest today. Definitely

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Speaker 1: worth a listening to that one.

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Speaker 2: Thank you very much, Sean, Thank you, Michael.

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Speaker 1: It is Wednesday, the fourth of December twenty twenty four.

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Speaker 1: Make sure you're following the podcast and please join us

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Speaker 1: online on LinkedIn, Instagram, TikTok, Facebook and X Michael Thompson.

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Speaker 1: That was Fear and Greed. Have a great day.