1 00:00:04,019 --> 00:00:06,840 Michael Thompson: Get set for another rate rise tomorrow after the Fair 2 00:00:06,840 --> 00:00:10,800 Michael Thompson: Work Commission announces a bumper pay increase for 2.6 million 3 00:00:10,800 --> 00:00:16,230 Michael Thompson: workers. Australian universities produce their worst ever financial performance losing $ 1. 4 00:00:16,500 --> 00:00:19,590 Michael Thompson: 3 billion, and there's a reshuffle at the top of 5 00:00:19,590 --> 00:00:22,770 Michael Thompson: the world's richest people. It's Monday the 5th of June 6 00:00:22,770 --> 00:00:26,698 Michael Thompson: 2023. Welcome to Fear and Greed, Australia's most popular business 7 00:00:26,700 --> 00:00:30,090 Michael Thompson: podcast. I'm Michael Thompson and good morning, Sean Aylmer. 8 00:00:30,300 --> 00:00:31,560 Sean Aylmer: Good morning, Michael. 9 00:00:31,860 --> 00:00:35,009 Michael Thompson: Sean, after the show today you are speaking with Michael 10 00:00:35,010 --> 00:00:39,839 Michael Thompson: Skinner, the Managing Director and Chief Investment Officer at Blackwattle 11 00:00:39,840 --> 00:00:42,300 Michael Thompson: Investment Partners. Really the new kid on the block. 12 00:00:42,540 --> 00:00:46,199 Sean Aylmer: Yes, very much. They're setting up funds, particularly around that mid- 13 00:00:46,290 --> 00:00:49,830 Sean Aylmer: cap space, and we talked to Michael all about, you 14 00:00:49,830 --> 00:00:52,260 Sean Aylmer: know, what they're doing, how they're thinking about mid- caps, 15 00:00:52,260 --> 00:00:54,570 Sean Aylmer: what to look out for really, I mean a great 16 00:00:54,570 --> 00:00:57,360 Sean Aylmer: interview for anyone who is interested in investing. 17 00:00:57,660 --> 00:00:59,250 Michael Thompson: Yes, indeed. It's coming up a little bit later on. 18 00:00:59,460 --> 00:01:01,620 Michael Thompson: The main story this morning though, Sean, the Reserve Bank 19 00:01:01,620 --> 00:01:05,550 Michael Thompson: is expected to lift rates tomorrow taking the benchmark rate 20 00:01:05,610 --> 00:01:09,449 Michael Thompson: to beyond 4% and standard variable home loan rates to 21 00:01:09,450 --> 00:01:10,500 Michael Thompson: about 6.5%. 22 00:01:10,500 --> 00:01:16,020 Sean Aylmer: Yes. Now it's not definitely a foregone conclusion. I mean, there 23 00:01:16,020 --> 00:01:17,940 Sean Aylmer: is still a chance the Central Bank won't move this 24 00:01:17,940 --> 00:01:21,510 Sean Aylmer: month, but the consensus among market economists is that more 25 00:01:21,510 --> 00:01:25,199 Sean Aylmer: rate rises are in the offing, probably starting tomorrow. Two 26 00:01:25,200 --> 00:01:28,619 Sean Aylmer: main reasons for that. One, inflation is still too high 27 00:01:28,830 --> 00:01:32,280 Sean Aylmer: and not falling fast enough. Last week, bureau statistics figures 28 00:01:32,280 --> 00:01:33,900 Sean Aylmer: showed that for the 12 months to the end of 29 00:01:33,900 --> 00:01:38,340 Sean Aylmer: April, prices rose by 6. 8% well above the bank's prefer 30 00:01:38,340 --> 00:01:42,899 Sean Aylmer: target of two to 3%. Second reason wage growth without 31 00:01:42,900 --> 00:01:47,489 Sean Aylmer: productivity, it's expected to push beyond 4%. Now on Friday, 32 00:01:47,490 --> 00:01:49,710 Sean Aylmer: the Fair Work Commission lifted the award rate for 2.4 33 00:01:50,490 --> 00:01:56,940 Sean Aylmer: million workers by 5. 75%. The highest increase in decades. For the 180, 34 00:01:56,940 --> 00:01:59,940 Sean Aylmer: 000 Australians on the minimum wage, the increase was 8. 35 00:02:00,210 --> 00:02:03,928 Sean Aylmer: 6%. We've already seen a 15% increase for aged care 36 00:02:03,929 --> 00:02:09,060 Sean Aylmer: workers and the Fair Work Commission decision influences other awards 37 00:02:09,060 --> 00:02:13,169 Sean Aylmer: as well. So the chances of a wages breakout is 38 00:02:13,169 --> 00:02:17,010 Sean Aylmer: significant. Financial markets have now priced in the likelihood of a 39 00:02:17,010 --> 00:02:21,179 Sean Aylmer: 25 basis point increase in the cash rate tomorrow. If 40 00:02:21,179 --> 00:02:24,750 Sean Aylmer: they're right, then the increase in monthly mortgage repayments on a $750, 41 00:02:24,750 --> 00:02:29,160 Sean Aylmer: 000 loan since early last year when rate rises began 42 00:02:29,430 --> 00:02:31,350 Sean Aylmer: is nearly $2, 000. 43 00:02:31,950 --> 00:02:35,519 Michael Thompson: That is extraordinary to think about, isn't it? And you've 44 00:02:35,520 --> 00:02:38,820 Michael Thompson: made the point before that standard variable rates of around 45 00:02:38,820 --> 00:02:43,290 Michael Thompson: kind of 6.5% are not extraordinarily high by historical standards, 46 00:02:43,290 --> 00:02:46,560 Michael Thompson: but when you put it like that, the increase on 47 00:02:46,560 --> 00:02:50,849 Michael Thompson: that loan of say $ 750,000 would be nearly $2, 000 a 48 00:02:50,849 --> 00:02:53,849 Michael Thompson: month since early last year. That's got to hurt from 49 00:02:53,849 --> 00:02:54,960 Michael Thompson: a cost of living perspective. 50 00:02:55,080 --> 00:02:57,270 Sean Aylmer: Yeah, it sure does. And I that's a very good 51 00:02:57,270 --> 00:02:59,910 Sean Aylmer: point is all these other prices are rising as well, 52 00:02:59,940 --> 00:03:03,180 Sean Aylmer: energy bills, petrol prices, all that. You put all that 53 00:03:03,180 --> 00:03:05,070 Sean Aylmer: together, people are hurting. 54 00:03:05,610 --> 00:03:09,210 Michael Thompson: Yeah, indeed. Now, expectations then that rates will rise tomorrow. Did 55 00:03:09,210 --> 00:03:12,030 Michael Thompson: it affect the housing market at all over the weekend, Sean? 56 00:03:12,600 --> 00:03:13,890 Sean Aylmer: In a word? No. 57 00:03:14,340 --> 00:03:17,100 Michael Thompson: Okay. Well, that was brief. Would you like to expand? 58 00:03:18,450 --> 00:03:21,720 Sean Aylmer: Okay. So last week's auction clearance rate for the seven 59 00:03:21,720 --> 00:03:25,768 Sean Aylmer: days till yesterday hit a new 18- month record high 60 00:03:25,800 --> 00:03:29,669 Sean Aylmer: with Sydney, again leading the way. The preliminary clearance rate across the 61 00:03:29,669 --> 00:03:35,129 Sean Aylmer: nation was 77. 2% buyers seemingly unperturbed about the likely 62 00:03:35,129 --> 00:03:37,860 Sean Aylmer: interest rate rise tomorrow. The Sydney clearance rate was almost 63 00:03:37,890 --> 00:03:40,500 Sean Aylmer: 80% just shy of that. Melbourne was just short of 64 00:03:40,500 --> 00:03:45,209 Sean Aylmer: 76%. Brisbane, Adelaide and Canberra were all over 70% according 65 00:03:45,210 --> 00:03:47,849 Sean Aylmer: to CoreLogic. Last week, you found out that house prices 66 00:03:47,849 --> 00:03:50,249 Sean Aylmer: in every capital city rose during May. Across the five 67 00:03:50,250 --> 00:03:54,870 Sean Aylmer: capitals prices were on average up 1. 2%. The strength 68 00:03:54,870 --> 00:03:57,300 Sean Aylmer: of the rebound has been surprising, no doubt about that 69 00:03:57,540 --> 00:04:00,660 Sean Aylmer: aided by fewer houses going up for sale and strong 70 00:04:00,660 --> 00:04:04,530 Sean Aylmer: demand as migration picks up. Still the jury is out 71 00:04:05,160 --> 00:04:08,130 Sean Aylmer: on how long this turnaround can last, not least because 72 00:04:08,130 --> 00:04:10,349 Sean Aylmer: of the interest rate story. It's going to be a 73 00:04:10,350 --> 00:04:12,780 Sean Aylmer: very, very interesting week ahead, Michael. 74 00:04:13,110 --> 00:04:15,150 Michael Thompson: Yeah, sure it will be. And if you missed our 75 00:04:15,150 --> 00:04:18,390 Michael Thompson: interview on Friday with Tim Lawless from CoreLogic, it is 76 00:04:18,390 --> 00:04:20,339 Michael Thompson: definitely worth going back and having a listen to it 77 00:04:20,580 --> 00:04:23,428 Michael Thompson: as he goes through kind of where those price rises 78 00:04:23,428 --> 00:04:26,309 Michael Thompson: have been and kind of his forecast as to how 79 00:04:26,309 --> 00:04:28,319 Michael Thompson: long this is going to continue. He is an absolute 80 00:04:28,320 --> 00:04:31,650 Michael Thompson: expert on that. That's Tim Lawless from Friday's show. Sean, 81 00:04:31,680 --> 00:04:33,210 Michael Thompson: how did local markets finish up on Friday? 82 00:04:33,211 --> 00:04:36,750 Sean Aylmer: The S&P/ ASX200 looked like it was in for a strong 83 00:04:36,750 --> 00:04:40,139 Sean Aylmer: day, but the Fair Work Commission decision triggered expectation of 84 00:04:40,139 --> 00:04:42,689 Sean Aylmer: higher interest rates and that weighed on the market. So 85 00:04:42,690 --> 00:04:45,270 Sean Aylmer: the market fell sharply then it clawed its way back 86 00:04:45,270 --> 00:04:48,209 Sean Aylmer: somewhat, in the end it finished the day up half 87 00:04:48,240 --> 00:04:52,980 Sean Aylmer: percent to 7, 145 points, which is just about where 88 00:04:52,980 --> 00:04:55,950 Sean Aylmer: it was a week earlier. The materials sector was the 89 00:04:55,950 --> 00:04:59,969 Sean Aylmer: standout, while more defensive sectors like consumer staples, healthcare and 90 00:04:59,969 --> 00:05:02,910 Sean Aylmer: telcos were the under performers. The iron ore producers, which 91 00:05:02,910 --> 00:05:05,910 Sean Aylmer: have had a tough week were the standouts, BHP jumped 92 00:05:05,910 --> 00:05:09,510 Sean Aylmer: nearly 3%. Rio was up 2.6% and for Fortescue Metals 93 00:05:09,510 --> 00:05:13,710 Sean Aylmer: rose 1. 7%. Energy giants, Woodside and Santos also rose 94 00:05:13,710 --> 00:05:17,910 Sean Aylmer: around 1. 7% while Coles, Woolies, Telstra and National Australia 95 00:05:17,910 --> 00:05:20,159 Sean Aylmer: Bank were the worst of the large stocks. 96 00:05:20,520 --> 00:05:22,380 Michael Thompson: And what's happening on international markets? 97 00:05:22,830 --> 00:05:26,430 Sean Aylmer: Michael, I almost, almost, feel sorry for the coal companies. 98 00:05:26,820 --> 00:05:31,260 Michael Thompson: Oh, that is a sentence I would not normally expect to hear. 99 00:05:31,740 --> 00:05:34,919 Sean Aylmer: No, so the price of coal is off 70% from 100 00:05:34,920 --> 00:05:38,940 Sean Aylmer: its peak last August. That's when local players like Whitehaven 101 00:05:38,940 --> 00:05:43,020 Sean Aylmer: Coal and New Hope's share prices were surging, but much 102 00:05:43,020 --> 00:05:45,839 Sean Aylmer: more supply of coal added by a mild Northern Hemisphere 103 00:05:45,839 --> 00:05:49,380 Sean Aylmer: winter has put coal prices back to more normal levels. 104 00:05:49,680 --> 00:05:51,779 Sean Aylmer: Well, they're still at record highs if you exclude the 105 00:05:51,779 --> 00:05:54,930 Sean Aylmer: Covid period, but at least they're closer to more normal 106 00:05:55,020 --> 00:05:58,320 Sean Aylmer: levels. Anyway, the share prices of those companies have come 107 00:05:58,320 --> 00:06:01,529 Sean Aylmer: off. Otherwise, gold fell over the weekend, oil is higher 108 00:06:01,529 --> 00:06:04,980 Sean Aylmer: and the Aussie dollar is fetching just over 66 US cents. 109 00:06:05,279 --> 00:06:08,820 Michael Thompson: I enjoyed your coal story then, Sean, but the highlight 110 00:06:08,820 --> 00:06:11,008 Michael Thompson: for me of last week was when you were looking 111 00:06:11,010 --> 00:06:14,460 Michael Thompson: for different ways to describe coal and you just referred 112 00:06:14,460 --> 00:06:16,289 Michael Thompson: to it as the sedimentary rock. 113 00:06:16,289 --> 00:06:18,900 Sean Aylmer: Yes. I know, 114 00:06:18,900 --> 00:06:21,180 Michael Thompson: And I was expecting you considering, I think you mentioned 115 00:06:21,180 --> 00:06:23,520 Michael Thompson: coal four or five times just then, I thought that 116 00:06:23,520 --> 00:06:25,170 Michael Thompson: you were going to find a new way to describe 117 00:06:25,170 --> 00:06:27,750 Michael Thompson: it again after having busted out the sedimentary rock. 118 00:06:27,779 --> 00:06:28,230 Sean Aylmer: Alas. No. 119 00:06:28,500 --> 00:06:31,409 Michael Thompson: Maybe like black fuel nuggets or something. 120 00:06:33,120 --> 00:06:34,230 Sean Aylmer: No, don't like it. 121 00:06:34,799 --> 00:06:37,109 Michael Thompson: Anything with the word nugget in it just sounds kind 122 00:06:37,110 --> 00:06:38,159 Michael Thompson: of a little bit wrong, doesn't it? 123 00:06:38,310 --> 00:06:38,580 Sean Aylmer: Yep. 124 00:06:38,970 --> 00:06:40,890 Michael Thompson: Unless you're talking about gold. All right, we'll be back 125 00:06:40,890 --> 00:06:42,479 Michael Thompson: in a moment with the rest of the day's business 126 00:06:42,480 --> 00:06:52,799 Michael Thompson: news. Sean, Australian universities have produced their worst financial results 127 00:06:52,799 --> 00:06:57,779 Michael Thompson: in history with a combined $1. 3 billion loss last financial 128 00:06:57,779 --> 00:07:01,440 Michael Thompson: year and only five of the 29 that have reported 129 00:07:01,440 --> 00:07:03,690 Michael Thompson: their 2022 accounts being in surplus. 130 00:07:04,139 --> 00:07:08,339 Sean Aylmer: Experts put the results down to the COVID- 19 pandemic, which had a 131 00:07:08,339 --> 00:07:12,329 Sean Aylmer: dire impact on international student revenues in many universities according 132 00:07:12,330 --> 00:07:15,300 Sean Aylmer: to a report in the financial review. The pandemic also spurred 133 00:07:15,300 --> 00:07:18,239 Sean Aylmer: on job redundancies and cost- cutting, which drove surpluses the 134 00:07:18,240 --> 00:07:21,870 Sean Aylmer: previous year. Now having shed about 27, 000 jobs in the 135 00:07:21,870 --> 00:07:26,399 Sean Aylmer: 2021 financial year, most unis were forced to rehire staff 136 00:07:26,670 --> 00:07:30,750 Sean Aylmer: last financial year as campus life and in- person teaching 137 00:07:30,930 --> 00:07:34,140 Sean Aylmer: resumed to some level of normality. The University of Sydney 138 00:07:34,140 --> 00:07:36,570 Sean Aylmer: was the only one of New South Wales 10 universities 139 00:07:36,570 --> 00:07:41,550 Sean Aylmer: in the black in 2022. It had a $ 302 million surplus, 140 00:07:41,790 --> 00:07:44,790 Sean Aylmer: that was well down from the billion dollar surplus the 141 00:07:44,790 --> 00:07:48,690 Sean Aylmer: year before. In Victoria La Trobe posted a $ 38 million surplus, 142 00:07:48,690 --> 00:07:50,940 Sean Aylmer: the only one in that state. The (inaudible) goes on to point 143 00:07:50,940 --> 00:07:55,200 Sean Aylmer: out that 10 vice chancellors earned one million dollars plus 144 00:07:55,200 --> 00:07:58,830 Sean Aylmer: salaries in 2022, notwithstanding those results, with the University of 145 00:07:58,830 --> 00:08:02,429 Sean Aylmer: Melbourne's at Duncan Makell, the most highly remunerated with a 146 00:08:02,429 --> 00:08:03,900 Sean Aylmer: package of $1. 5 million. 147 00:08:04,859 --> 00:08:07,320 Michael Thompson: What happens, this is maybe something that you can't answer 148 00:08:07,320 --> 00:08:10,680 Michael Thompson: off the cuff, Sean, but what happens now for universities 149 00:08:10,680 --> 00:08:13,920 Michael Thompson: because one would think that the outlook would be a 150 00:08:13,920 --> 00:08:16,740 Michael Thompson: little bit better with kind of international students returning and 151 00:08:17,219 --> 00:08:20,789 Michael Thompson: those rules changing in China requiring international students to actually 152 00:08:20,790 --> 00:08:23,550 Michael Thompson: go and attend the universities in which they're enrolled. 153 00:08:24,000 --> 00:08:25,200 Sean Aylmer: Yeah, I don't think it's, I don't know that I 154 00:08:25,200 --> 00:08:28,050 Sean Aylmer: can say it's boom time for universities, but it is 155 00:08:28,050 --> 00:08:29,790 Sean Aylmer: much, much better than it has looked for the last 156 00:08:29,790 --> 00:08:31,890 Sean Aylmer: two or three years. Of course, most of those are 157 00:08:31,890 --> 00:08:38,250 Sean Aylmer: full fee paying students, so 2022 hopefully was the bottom 158 00:08:38,520 --> 00:08:39,120 Sean Aylmer: for unis. 159 00:08:39,389 --> 00:08:43,290 Michael Thompson: All right, now the Federal Greens have softened their demands 160 00:08:43,290 --> 00:08:47,189 Michael Thompson: over Labor's planned $ 10 billion Housing Future fund saying they'll 161 00:08:47,190 --> 00:08:50,429 Michael Thompson: support the bill if it includes a rent freeze and 162 00:08:50,429 --> 00:08:53,010 Michael Thompson: at least two and a half billion dollars a year 163 00:08:53,010 --> 00:08:54,540 Michael Thompson: spent on new homes. 164 00:08:54,929 --> 00:08:57,780 Sean Aylmer: The revised offer, which halves the Green's original demand, that 165 00:08:57,780 --> 00:09:00,689 Sean Aylmer: Labor spend $ 5 billion a year on new housing, was 166 00:09:00,690 --> 00:09:03,480 Sean Aylmer: almost immediately rejected by the government, which pointed out that 167 00:09:03,480 --> 00:09:06,120 Sean Aylmer: placing a halt on rental increases was a state and 168 00:09:06,120 --> 00:09:08,910 Sean Aylmer: territory matter. Now, Labor's pushing the Greens to back the 169 00:09:08,910 --> 00:09:12,779 Sean Aylmer: government's housing fund, which would see some 30,000 new social 170 00:09:12,990 --> 00:09:16,350 Sean Aylmer: and affordable homes built in the first five years, warning 171 00:09:16,350 --> 00:09:19,680 Sean Aylmer: that without the cross bench party support low income home seekers 172 00:09:20,220 --> 00:09:22,830 Sean Aylmer: will get no relief from soaring rents and lack of 173 00:09:22,830 --> 00:09:27,090 Sean Aylmer: supplier. Appearing on Insiders on ABC yesterday morning, Green's housing 174 00:09:27,090 --> 00:09:31,468 Sean Aylmer: spokesman Max Chandler- Mather said the $2. 5 billion annual spending 175 00:09:31,469 --> 00:09:34,228 Sean Aylmer: demand was still five times more than what the government's 176 00:09:34,230 --> 00:09:37,470 Sean Aylmer: plan to fund was likely to deliver alongside an extra 177 00:09:37,470 --> 00:09:40,590 Sean Aylmer: one billion dollar annual incentive for states to freeze rents. 178 00:09:41,010 --> 00:09:44,790 Michael Thompson: Still on politics, Sean, elements of Federal Labor's proposed franking 179 00:09:44,790 --> 00:09:48,718 Michael Thompson: credit system overhaul could be watered down amid concerns from 180 00:09:48,719 --> 00:09:51,719 Michael Thompson: fund managers, from investors and the coalition as well that 181 00:09:51,719 --> 00:09:53,520 Michael Thompson: the crackdown could hurt investment. 182 00:09:53,969 --> 00:09:57,900 Sean Aylmer: Very important story this one. The Senate Economics Legislation Committee 183 00:09:57,900 --> 00:10:01,920 Sean Aylmer: inquiry into the government's treasury laws amendment bill, which is 184 00:10:01,920 --> 00:10:06,599 Sean Aylmer: chaired by Victorian Labor senator Jess Walsh said the proposal 185 00:10:06,599 --> 00:10:11,219 Sean Aylmer: to target franked distributions funded by capital raisings should be 186 00:10:11,279 --> 00:10:16,800 Sean Aylmer: I quote " clarified." Now this is all about franked dividends 187 00:10:16,800 --> 00:10:18,570 Sean Aylmer: and there are a lot of pensioners who are not 188 00:10:18,570 --> 00:10:22,889 Sean Aylmer: very happy about the proposed changes. The committee recommended that's 189 00:10:22,889 --> 00:10:25,799 Sean Aylmer: what's known as Schedule 5 of the bill, which relates 190 00:10:25,799 --> 00:10:30,150 Sean Aylmer: to franked distributions funded by capital raisings, company goes out, 191 00:10:30,150 --> 00:10:33,958 Sean Aylmer: raises capital at some point in the future uses some 192 00:10:33,960 --> 00:10:36,569 Sean Aylmer: of those funds to provide a franked distribution. That's what 193 00:10:36,570 --> 00:10:40,500 Sean Aylmer: the government does not want. The committee has recommended that 194 00:10:40,500 --> 00:10:43,620 Sean Aylmer: the definition be clarified. The problem at the moment is 195 00:10:43,620 --> 00:10:45,838 Sean Aylmer: the definition is very gray and it could pick up 196 00:10:45,839 --> 00:10:49,110 Sean Aylmer: all sorts of other things. Treasury says the proposed franking 197 00:10:49,139 --> 00:10:53,070 Sean Aylmer: credit changes would raise about $ 550 million. No wonder the government wants 198 00:10:53,070 --> 00:10:56,429 Sean Aylmer: it, but critics fear the changes could actually undermine investing 199 00:10:56,429 --> 00:10:59,939 Sean Aylmer: generally, particularly by many older people who rely on franked dividends. 200 00:11:00,719 --> 00:11:03,149 Michael Thompson: Now Sean, this is an interesting one considering the e- 201 00:11:03,150 --> 00:11:06,720 Michael Thompson: commerce boom in recent years, Australia Post will lift its 202 00:11:06,720 --> 00:11:09,598 Michael Thompson: prices for a bunch of mostly business parcels and package 203 00:11:09,600 --> 00:11:13,949 Michael Thompson: delivery services by as much as 10% blaming inflationary pressures 204 00:11:14,160 --> 00:11:16,500 Michael Thompson: and growing losses across its mail operations. 205 00:11:16,770 --> 00:11:20,400 Sean Aylmer: Business letters and domestic parcel prices will rise between three 206 00:11:20,400 --> 00:11:23,580 Sean Aylmer: and a half and 10%. There'll also be higher fees 207 00:11:23,580 --> 00:11:27,270 Sean Aylmer: for manual handling of oversized and heavier mail and security 208 00:11:27,270 --> 00:11:30,208 Sean Aylmer: handling of some packages. According to a report in The Australian, 209 00:11:30,450 --> 00:11:33,059 Sean Aylmer: the new and higher fees will be particularly costly for 210 00:11:33,059 --> 00:11:36,330 Sean Aylmer: local smaller businesses that rely heavily on sending packages and 211 00:11:36,330 --> 00:11:40,319 Sean Aylmer: parcels to customers and suppliers. Aussie Post wrote to business 212 00:11:40,320 --> 00:11:43,890 Sean Aylmer: customers on Friday informing them of the price changes. They'll 213 00:11:43,890 --> 00:11:47,490 Sean Aylmer: come into play on July 3, yet another cost imposition 214 00:11:47,760 --> 00:11:49,380 Sean Aylmer: on small and medium- sized businesses. 215 00:11:50,070 --> 00:11:53,969 Michael Thompson: Bub's Australia says it's on track to meet all regulatory 216 00:11:53,969 --> 00:11:57,779 Michael Thompson: milestones to allow it to permanently sell in the massive 217 00:11:57,809 --> 00:12:00,840 Michael Thompson: infant formula market in the United States. But sales in 218 00:12:00,840 --> 00:12:03,000 Michael Thompson: China remain below expectations. 219 00:12:03,179 --> 00:12:05,880 Sean Aylmer: The ASX listed group is facing a board spill being 220 00:12:05,910 --> 00:12:08,880 Sean Aylmer: led by its co- founder Kristi Carr and former executive 221 00:12:08,880 --> 00:12:12,569 Sean Aylmer: chair Dennis Lin so any of these announcements are particularly 222 00:12:12,809 --> 00:12:15,960 Sean Aylmer: pertinent at the moment. On Friday, Bub's said that sales 223 00:12:15,960 --> 00:12:19,260 Sean Aylmer: of formula and adult nutrition in the Chinese export market 224 00:12:19,559 --> 00:12:22,559 Sean Aylmer: remain below expectations and revenue in the three months to 225 00:12:22,559 --> 00:12:26,699 Sean Aylmer: March 31 was down about 56%. Now the problem for 226 00:12:26,700 --> 00:12:29,280 Sean Aylmer: the company is it's facing a buildup of inventory, not 227 00:12:29,280 --> 00:12:32,429 Sean Aylmer: something that it needs. It's share price closed down 3% on Friday. 228 00:12:33,150 --> 00:12:38,340 Michael Thompson: Now Sean, last week, BHP conceded it has underpaid about 229 00:12:38,340 --> 00:12:44,699 Michael Thompson: 28,500 past and present employees $ 430 million. And on Friday it 230 00:12:44,700 --> 00:12:46,799 Michael Thompson: was supermarket giant Coles' turn. 231 00:12:47,340 --> 00:12:53,069 Sean Aylmer: Not quite the same magnitude, but still same principle. Coles 232 00:12:53,070 --> 00:12:56,309 Sean Aylmer: will take an additional $ 25 million provision in relation to 233 00:12:56,309 --> 00:13:00,630 Sean Aylmer: the underpayment of staff, more than doubling initial estimates. It 234 00:13:00,630 --> 00:13:04,320 Sean Aylmer: is becoming a common occurrence, I'm afraid, particularly among retailers. 235 00:13:04,320 --> 00:13:07,920 Sean Aylmer: David Jones and men's fashion retailer Politix agreed this year 236 00:13:07,920 --> 00:13:12,360 Sean Aylmer: to pay more than $ 750,000 in interest and contrition payments 237 00:13:12,450 --> 00:13:16,290 Sean Aylmer: after admitting to underpaying thousands of employees four million dollars 238 00:13:17,070 --> 00:13:20,160 Sean Aylmer: in 2021. The big one was Woolies, it faced a $ 239 00:13:20,160 --> 00:13:24,719 Sean Aylmer: 420 million blowout in its back pay bill. Just doesn't 240 00:13:24,719 --> 00:13:26,580 Sean Aylmer: seem to be getting any better at the moment and 241 00:13:26,580 --> 00:13:27,450 Sean Aylmer: that's not a good thing. 242 00:13:27,719 --> 00:13:30,480 Michael Thompson: No, it's certainly not. And Sean, I don't know if 243 00:13:30,480 --> 00:13:33,751 Michael Thompson: you recall, but on the weekend edition of Fear and Greed- 244 00:13:33,751 --> 00:13:35,520 Sean Aylmer: I hope you're not going to complain here. 245 00:13:35,820 --> 00:13:38,040 Michael Thompson: I am. I'm just lodging a very, very, very quick 246 00:13:38,040 --> 00:13:41,010 Michael Thompson: complaint. You and I are competing to kind of pick 247 00:13:41,010 --> 00:13:43,199 Michael Thompson: the bigger story of the week and all of these 248 00:13:43,200 --> 00:13:46,080 Michael Thompson: things. One of our categories is a sleeper story, which 249 00:13:46,080 --> 00:13:48,059 Michael Thompson: is a story that's kind of flying under the radar 250 00:13:48,059 --> 00:13:50,069 Michael Thompson: a little bit or in some cases it's going to 251 00:13:50,070 --> 00:13:52,410 Michael Thompson: become a bigger story further down the track. And I 252 00:13:52,620 --> 00:13:57,119 Michael Thompson: tried to make the case that BHPs underpayment of nearly 253 00:13:57,120 --> 00:14:01,740 Michael Thompson: 30,000 staff by $ 430 million was a sleeper story. Admittedly that 254 00:14:01,799 --> 00:14:04,200 Michael Thompson: even as I say it does sound a little flawed, 255 00:14:04,650 --> 00:14:07,590 Michael Thompson: but I feel like by the fact that we're already 256 00:14:07,590 --> 00:14:11,040 Michael Thompson: talking about it again and it's Monday today, I feel 257 00:14:11,040 --> 00:14:12,150 Michael Thompson: like that's vindication. 258 00:14:12,750 --> 00:14:15,210 Sean Aylmer: I reckon you're just in the wrong category. There's nothing 259 00:14:15,210 --> 00:14:17,519 Sean Aylmer: sleeperish about that one. That was just a big story. 260 00:14:17,610 --> 00:14:20,730 Michael Thompson: Yeah, I know, mate. Maybe it was an error. Anyway, 261 00:14:20,730 --> 00:14:23,819 Michael Thompson: I copped it from Adam, the judge for that decision. 262 00:14:23,820 --> 00:14:25,890 Michael Thompson: But anyway, I was just hoping to kind of claw 263 00:14:25,890 --> 00:14:31,020 Michael Thompson: back some points on appeal. Unsuccessful. One last one, Sean, 264 00:14:31,020 --> 00:14:33,899 Michael Thompson: before we get to international news, Adairs has been the 265 00:14:33,900 --> 00:14:38,429 Michael Thompson: latest retailer to report a fallen consumer spending joining Wesfarmers 266 00:14:38,429 --> 00:14:42,840 Michael Thompson: which owns Bunnings, Officeworks and Kmart, jeweler Michael Hill and Youth 267 00:14:42,840 --> 00:14:45,090 Michael Thompson: Apparel Group, Universal Store among others. 268 00:14:45,330 --> 00:14:48,360 Sean Aylmer: Adairs said after a good final half of 2022, the 269 00:14:48,360 --> 00:14:50,970 Sean Aylmer: impact of rising interest rates and higher cost of living 270 00:14:50,970 --> 00:14:54,749 Sean Aylmer: has created a more subdued trading environment with lower traffic 271 00:14:54,750 --> 00:14:58,139 Sean Aylmer: observed both in stores and online. The announcement sent its 272 00:14:58,139 --> 00:15:01,500 Sean Aylmer: shares down 15% on Friday. Now last week, Wesfarmers' boss, 273 00:15:01,500 --> 00:15:04,200 Sean Aylmer: Rob Scott, talked about the big squeeze for retailers as 274 00:15:04,200 --> 00:15:07,740 Sean Aylmer: costs rise, rates rise and consumers stop spending as much. 275 00:15:08,130 --> 00:15:10,920 Sean Aylmer: Jeweler Michael Hill International said sales were down three and 276 00:15:10,920 --> 00:15:13,380 Sean Aylmer: a half percent for the half year blaming softer consumer 277 00:15:13,380 --> 00:15:17,159 Sean Aylmer: sentiment and Universal Store warned subdued trading will persist for 278 00:15:17,160 --> 00:15:19,590 Sean Aylmer: the rest of this year as its customers battle rent 279 00:15:19,620 --> 00:15:23,250 Sean Aylmer: increases and student debt. They obviously target a younger demographic. 280 00:15:23,580 --> 00:15:27,360 Sean Aylmer: Its share price ended up falling 25% in one session 281 00:15:27,360 --> 00:15:29,579 Sean Aylmer: last week. Times are tough in retail land. 282 00:15:29,820 --> 00:15:32,789 Michael Thompson: Yeah, it certainly seems that way. Now, international news, Sean. 283 00:15:32,790 --> 00:15:35,429 Michael Thompson: China's defense minister has told the rest of the world 284 00:15:35,490 --> 00:15:40,020 Michael Thompson: to mind your own business in a major address explaining 285 00:15:40,020 --> 00:15:44,220 Michael Thompson: Xi Jinping's Chinese wisdom on international security relations. 286 00:15:44,610 --> 00:15:48,780 Sean Aylmer: Yes, so Minister Li Shangfu a general and since March 287 00:15:48,809 --> 00:15:52,199 Sean Aylmer: the international face of the People's Liberation Army, told a 288 00:15:52,199 --> 00:15:55,680 Sean Aylmer: security conference in Singapore yesterday that China has one of 289 00:15:55,680 --> 00:15:59,880 Sean Aylmer: the best peace records among major countries according to a report 290 00:15:59,880 --> 00:16:02,370 Sean Aylmer: in The Australian. He then went on to talk about 291 00:16:02,429 --> 00:16:06,239 Sean Aylmer: Taiwan and I quote, " When friends visit us, we welcome 292 00:16:06,240 --> 00:16:09,270 Sean Aylmer: them with fine wine. When jackals and wolves come, we 293 00:16:09,270 --> 00:16:14,130 Sean Aylmer: will face them with shotguns." Apparently that's a popular Chinese 294 00:16:14,220 --> 00:16:17,520 Sean Aylmer: song, though, I don't know, very conciliatory. It doesn't sound 295 00:16:17,520 --> 00:16:21,570 Sean Aylmer: very conciliatory to me. The Chinese defense minister said Beijing's 296 00:16:21,570 --> 00:16:25,559 Sean Aylmer: preference was peaceful unification with Taiwan, a self ruled liberal 297 00:16:25,559 --> 00:16:28,469 Sean Aylmer: democracy, but he added that China would never promise to 298 00:16:28,469 --> 00:16:30,090 Sean Aylmer: renounce the use of force. 299 00:16:30,750 --> 00:16:32,760 Michael Thompson: And finally, Sean, we mentioned this one at the top 300 00:16:32,760 --> 00:16:35,790 Michael Thompson: of the show, Elon Musk has retaken the title of 301 00:16:35,790 --> 00:16:42,000 Michael Thompson: world's wealthiest person worth $ 199 billion. So close to the 302 00:16:42,000 --> 00:16:46,469 Michael Thompson: two hundred mark overtaking Bernard Arnault from Luxury Brand LVMH. 303 00:16:46,889 --> 00:16:50,850 Sean Aylmer: Yes. So LVMH's share price has fallen about 10% since 304 00:16:50,910 --> 00:16:53,880 Sean Aylmer: April. Arnault now comes in second on the list at 305 00:16:53,880 --> 00:16:58,260 Sean Aylmer: 191 billion US dollars of course. Arnault first surpassed Musk 306 00:16:58,260 --> 00:17:01,290 Sean Aylmer: in December on the Bloomberg billionaires list as the tech 307 00:17:01,290 --> 00:17:03,809 Sean Aylmer: industry struggled and luxury showed resilience in the face of 308 00:17:03,809 --> 00:17:08,160 Sean Aylmer: inflation. Arnault founded LVMH. It includes brands like Louis Vuitton, 309 00:17:08,160 --> 00:17:12,180 Sean Aylmer: Fendi, Hennessy, but alas, faith in the luxury sector's prospects 310 00:17:12,180 --> 00:17:15,719 Sean Aylmer: are fading as the economy slows and LVMH's share price 311 00:17:15,719 --> 00:17:19,049 Sean Aylmer: has fallen. Third on the list is Amazon's Jeff Bezos 312 00:17:19,049 --> 00:17:22,138 Sean Aylmer: worth about $ 148 billion. What I always find amazing is 313 00:17:22,138 --> 00:17:26,698 Sean Aylmer: the gap between second and third. So $ 191 billion versus $ 314 00:17:26,700 --> 00:17:32,250 Sean Aylmer: 148 billion, massive. Next on the list, fourth is Microsoft's 315 00:17:32,250 --> 00:17:35,340 Sean Aylmer: Bill Gates, then Oracle's Larry Ellison, Steve Ballmer, who was 316 00:17:35,340 --> 00:17:38,760 Sean Aylmer: chief executive officer of Microsoft. He now owns the LA 317 00:17:38,820 --> 00:17:42,720 Sean Aylmer: Clippers basketball team. Number seven is, Warren Buffett, the investment 318 00:17:42,720 --> 00:17:45,810 Sean Aylmer: guru. Rounding out the top 10 are the Alphabet duo, 319 00:17:46,020 --> 00:17:49,740 Sean Aylmer: Larry Page and Sergey Brin and Meta's, Mark Zuckerberg. 320 00:17:50,130 --> 00:17:52,320 Michael Thompson: All right. Up next couple of things to listen to the 321 00:17:52,320 --> 00:17:55,259 Michael Thompson: Fear and Greed daily interview with Michael Skinner, Chief Investment 322 00:17:55,259 --> 00:17:57,510 Michael Thompson: Officer at Blackwattle Investment Partners. 323 00:17:57,630 --> 00:18:01,138 Sean Aylmer: Yeah, all people interested in investing should listen to this. 324 00:18:01,140 --> 00:18:03,030 Sean Aylmer: Not so much about the stocks, we don't talk much 325 00:18:03,030 --> 00:18:05,700 Sean Aylmer: about stocks, but it's about the process. Well worth a listen. 326 00:18:06,000 --> 00:18:08,430 Michael Thompson: And the other one to put on the to listen 327 00:18:08,490 --> 00:18:13,139 Michael Thompson: list, let's say put on the playlist is Stephen Koukoulas 328 00:18:13,200 --> 00:18:15,809 Michael Thompson: for Fear and Greed the week ahead, a massive week 329 00:18:15,809 --> 00:18:16,708 Michael Thompson: coming up for the economy. 330 00:18:16,709 --> 00:18:20,430 Sean Aylmer: Huge week. So we have rates, we have economic growth 331 00:18:20,430 --> 00:18:24,000 Sean Aylmer: for the March quarter. Steven's very, very excited about the 332 00:18:24,000 --> 00:18:24,420 Sean Aylmer: whole thing. 333 00:18:24,630 --> 00:18:26,609 Michael Thompson: He certainly is. They're both coming up next in the 334 00:18:26,609 --> 00:18:30,330 Michael Thompson: Fear and Greed playlist wherever you listen to podcasts. Now, 335 00:18:30,359 --> 00:18:32,460 Michael Thompson: Sean, very quickly a MEA for you. 336 00:18:32,460 --> 00:18:32,550 Sean Aylmer: Yes. 337 00:18:32,730 --> 00:18:38,490 Michael Thompson: Most enthusiastic advocate, M- E- A, MEA, terrible acronym. Fantastic idea. 338 00:18:39,300 --> 00:18:39,388 Sean Aylmer: Yes. 339 00:18:39,390 --> 00:18:41,730 Michael Thompson: It is by a gentleman by the name of Andrew 340 00:18:41,730 --> 00:18:45,989 Michael Thompson: James, who has shared this on LinkedIn. There's nothing subtle 341 00:18:45,990 --> 00:18:49,140 Michael Thompson: about this. He said, this is a post, mind you, 342 00:18:49,290 --> 00:18:52,830 Michael Thompson: he says, " Fear and Greed is a great twice daily 343 00:18:52,830 --> 00:18:55,050 Michael Thompson: podcast to quickly bring you up to speed on all 344 00:18:55,050 --> 00:18:57,930 Michael Thompson: things in the business world. Fear and Greed is Australia's most 345 00:18:57,930 --> 00:19:00,629 Michael Thompson: popular business podcast. All the business news you need to 346 00:19:00,630 --> 00:19:03,750 Michael Thompson: know every day with Sean Aylmer and Michael Thompson. Serious, 347 00:19:03,750 --> 00:19:06,629 Michael Thompson: yet lighthearted makes for a great listen each day on 348 00:19:06,630 --> 00:19:09,658 Michael Thompson: the daily commute. Michael Thompson hoping to get a MEA 349 00:19:09,719 --> 00:19:13,109 Michael Thompson: here." So I mean, he knew exactly what he was 350 00:19:13,109 --> 00:19:14,970 Michael Thompson: aiming for and he even tagged us in it to 351 00:19:14,970 --> 00:19:18,510 Michael Thompson: try and kind of lure a MEA nomination. And you 352 00:19:18,510 --> 00:19:20,309 Michael Thompson: know what I say, Andrew, you got one. 353 00:19:20,550 --> 00:19:23,251 Sean Aylmer: Yeah. Too right, and deserves one after that. 354 00:19:23,251 --> 00:19:26,969 Michael Thompson: Absolutely. That kind of endorsement to a professional network on 355 00:19:26,969 --> 00:19:30,630 Michael Thompson: LinkedIn is very, very much appreciated. So Andrew, thank you 356 00:19:30,630 --> 00:19:33,240 Michael Thompson: for your support. Thank you for listening and thank you 357 00:19:33,450 --> 00:19:35,820 Michael Thompson: for telling all your friends and colleagues about it. Sean, 358 00:19:36,000 --> 00:19:36,810 Michael Thompson: thank you as well. 359 00:19:37,080 --> 00:19:37,890 Sean Aylmer: Thank you, Michael. 360 00:19:38,010 --> 00:19:40,948 Michael Thompson: It's Monday, the 5th of June 2023. Make sure you're 361 00:19:40,950 --> 00:19:44,219 Michael Thompson: following the podcast. Join us online on LinkedIn, Instagram, Twitter, and 362 00:19:44,219 --> 00:19:47,070 Michael Thompson: Facebook. I'm Michael Thompson and that was Fear and Greed. 363 00:19:47,369 --> 00:19:47,908 Michael Thompson: Have a great day.