Speaker 1: This is what the Flux.
Speaker 2: I'm justin and I'm harsh deep and it's Wednesday, the
Speaker 2: twenty fifth of September.
Speaker 1: A s we spoke the other week about luxury e
Speaker 1: commerce marketplace set Higher. The share price dropped nearly fifty percent,
Speaker 1: and that was because it's auditors wouldn't sign off on
Speaker 1: their financial results. But now the auditors have come back
Speaker 1: and given set Hire the all clear. Okay, next minute,
Speaker 1: SETI share price jump nearly seventy percent.
Speaker 2: Oh, talk about a comeback. It's the last week of
Speaker 2: September and that means it's the time of the month
Speaker 2: to do the financial hygiene. We've got it all covered
Speaker 2: in the Flux app, from checking your credit score to
Speaker 2: tracking a financial wellbeing score. Keep your financial wellbeing on
Speaker 2: track in the Flux app.
Speaker 1: Good call HD three very Highgienie can clean stories today.
Speaker 1: Let's get into it for our first Woolworths and Coals
Speaker 1: are in hot water after the Atrible c failed a
Speaker 1: court case alleging that the supermarkets have misled consumers over
Speaker 1: products on sale.
Speaker 2: Looks like someone's been caught with the hand in the
Speaker 2: cookie jar.
Speaker 1: Tell me more, does Okay? So we own O Coals
Speaker 1: and Woolies as the supermarket heavyweights in Australia. Together they
Speaker 1: control over sixty percent of the grocery market.
Speaker 2: And with the cost of living skyrocketing lately, it's fair
Speaker 2: to say that many Aussies are on the lookout for
Speaker 2: those yellow stickers at the supermarket.
Speaker 1: But HD, it seems like some of those supposed bargains
Speaker 1: at the supermarket might not have been so genuine after.
Speaker 2: All, how do you mean?
Speaker 1: Well, the A Triple C's alleging that both Coals and
Speaker 1: Woolies have jacked up the prices on over one hundred
Speaker 1: items just before putting them on sale.
Speaker 2: We're talking about everyday essentials like bread, milk, yogurt, and
Speaker 2: even toilet paper.
Speaker 1: Send it all over, TikTok now itch. They claim these
Speaker 1: supermarkets increased prices on certain products to make the discounts
Speaker 1: appear larger than they really were.
Speaker 2: And if the A Triple C's allegations are true, this
Speaker 2: could have some massive consequences for both Woolies and Coals.
Speaker 1: Yeah, we're talking fines of up to ten million dollars
Speaker 1: and a.
Speaker 2: Heap of pain to their already battered reputation.
Speaker 1: So true, So tell me, ah, what is the key
Speaker 1: learning here.
Speaker 2: The damage to a company's reputation can often be far
Speaker 2: greater than any finds they face.
Speaker 1: Yeah, let's be honest, regardless of the legal outcome of
Speaker 1: this case, we've still already become a pr disaster for
Speaker 1: Woolies and Coals.
Speaker 2: Oh yeah, they weren't exactly in the Australian consumer good
Speaker 2: books to begin with.
Speaker 1: No, no, no, They've already been under scrutiny for squeezing
Speaker 1: supplier margins.
Speaker 2: And using inflation to justify price.
Speaker 1: Hikes, and as a result, Woolworths has fallen thirty two
Speaker 1: spots from second on the Brand Trust rankings to thirty
Speaker 1: fourth according to Roy Morgan.
Speaker 2: While Coals has fallen two hundred and twenty one places
Speaker 2: from the fifth most trusted brand to becoming the two
Speaker 2: hundred and twenty sixth most trusted brand.
Speaker 1: And a she this wasn't just one or two products
Speaker 1: that the AH Triple S alleges that misled on.
Speaker 2: Nope, the A Triple C alleges Woolwards engaged in this
Speaker 2: behavior across two hundred and sixty six products.
Speaker 1: And Coals did this across two hundred and forty five
Speaker 1: products as well.
Speaker 2: So does even if the legal case goes in favor
Speaker 2: of coals and woolies, the damage to their reputation has
Speaker 2: already been done.
Speaker 1: For our second story, the Reserve Bank of Australia has
Speaker 1: sat for the sixth time this year and paused the
Speaker 1: cash rate for the sixth time at four point three
Speaker 1: five percent.
Speaker 2: Bucking the trend of the other central banks. Tell me
Speaker 2: more jazz.
Speaker 1: Okay, so we know the Reserve Bank of Australia. It's
Speaker 1: the central bank of our nation.
Speaker 2: Their goal is to basically ensure that there is economic
Speaker 2: prosperity for people of Australia.
Speaker 1: As well as stability of our currency, stability of employment
Speaker 1: and jazz.
Speaker 2: The Reserve Bank became the bestie of nearly every Australian
Speaker 2: over the past decade when it dropped the cash rate
Speaker 2: to just zero point one percent.
Speaker 1: But the NHG after the pandemic, it started raising the
Speaker 1: cash rate barely rapidly to raining inflation. They increased it
Speaker 1: from point one percent to four point three five percent
Speaker 1: in just over eighteen months.
Speaker 2: If but now jazz. The RBA has met for the
Speaker 2: sixth time this year and for the sixth time it's
Speaker 2: paused the cash rate at four point three five percent.
Speaker 1: And actually that's despite the fact that other central banks
Speaker 1: like the US Federal Reserve have already started to drop
Speaker 1: their cash rate the good years.
Speaker 2: It was the first time this year that the Reserve
Speaker 2: Bank hasn't actually considered raising the rates.
Speaker 1: So surely there's only down from here.
Speaker 2: Especially given we've diverged from many other central banks around
Speaker 2: the world. So what's the key learning here?
Speaker 1: The rate cut trend is sweeping across economies, but not
Speaker 1: all a jumping on the bandwagonz.
Speaker 2: Interestingly, the RBA has become one of the few central
Speaker 2: banks to not make moves yet.
Speaker 1: Yeah. I mean, if we look back in June this year,
Speaker 1: we saw the European Central Bank and the Bank of
Speaker 1: Canada cut their cash rate for the first time since
Speaker 1: twenty twenty two.
Speaker 2: In August, the Bank of England announced its first cash
Speaker 2: rate cut since March twenty twenty.
Speaker 1: Early this month, we saw the Central Bank of New
Speaker 1: Zealand cut their.
Speaker 2: Rates, but the big move was when the US Federal
Speaker 2: Reserve cut their rates zero point five percent.
Speaker 1: So other central banks are dropping rates to restimulate their economy.
Speaker 2: But the RBA is staying cautious so that we don't
Speaker 2: compromise on sustainable growth, and.
Speaker 1: It looks like the RBA and maybe the Bank of
Speaker 1: Japan they just stay away from the rate cut party
Speaker 1: for now.
Speaker 2: Sounds like it. For our third and final story, Intel
Speaker 2: has received a five billion US dollar investment offer from
Speaker 2: an alternative asset manager, just after a potential takeover offer
Speaker 2: from Arrival.
Speaker 1: Looks like Intel's finally becoming popular in NHGD, but not
Speaker 1: for the chips. So what is going on here?
Speaker 2: Well, Intel is one of the world's largest com few
Speaker 2: to chip makers, with a market cap of ninety three
Speaker 2: billion US dollars.
Speaker 1: And while that sounds big, at its peak in two thousand,
Speaker 1: Intel was valued at a opping five hundred billion US
Speaker 1: dollars for the dot com bubble burst.
Speaker 2: And before its competitors like TSMC and Nvidia entered the.
Speaker 1: Chat And actually since then, despite Intel's best efforts to
Speaker 1: recreate those glory days, it's lagged behind its competitors.
Speaker 2: But now ja Intel's having its moment as it's just
Speaker 2: received an investment offer of five billion US dollars from
Speaker 2: asset management company Apollo Global Management.
Speaker 1: And this news sent Intel share price up more than
Speaker 1: four percent.
Speaker 2: But that's not the only offer Intel's got on the table.
Speaker 1: Oh no. A rival chip maker called Qualcom has reportedly
Speaker 1: approached Intel for a potential takeover as well, which, if it.
Speaker 2: Was to go through, it would be the biggest tech
Speaker 2: merger of all time.
Speaker 1: It's pretty weird to hear a company as large as
Speaker 1: Intel was and kind of still is on the acquiree
Speaker 1: side of the deal. But sometimes roles do flip.
Speaker 2: So what's the key learning here?
Speaker 1: In business? Just like in nature, the predator can also
Speaker 1: become the prey.
Speaker 2: You see, ja. Intel was quite the heavy hitter back
Speaker 2: in the day.
Speaker 1: We're talking one hundred and eight acquisitions over its lifetime,
Speaker 1: with an average acquisition value of over one and a
Speaker 1: half billion US dollars.
Speaker 2: But the market for traditional PC chips, which was Intel's jam,
Speaker 2: has been declining.
Speaker 1: When the AI boom here, Intel hadn't developed advanced enough
Speaker 1: AI chips to compete with the likes of Nvidia.
Speaker 2: Yeah. So, while Intel was at one point the largest
Speaker 2: chip maker in the world, today it's about half the
Speaker 2: size of its potential acquirer, Qualcom.
Speaker 1: And it's gone from being a global tech behemoth to
Speaker 1: an attractive acquisition target. Guess you could call it the
Speaker 1: circle of life or the circle of tech companies Floxam.
Speaker 1: With the RBA pausing the cash rate at four point
Speaker 1: three five percent, again, there's a little bit of hope
Speaker 1: that the future might be cash rate cart We have
Speaker 1: it all covered in the Flux app. Why the cash
Speaker 1: rates being paused, what's holding the RBA back, and what
Speaker 1: might change their mind in the future. So make sure
Speaker 1: to download the Flux app and check out all of
Speaker 1: our articles about the cash rate decision.
Speaker 2: Thanks for listening and we'll see you on Friday.