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Speaker 1: Today on Fear and Greed. Economic growth slows to its

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Speaker 1: lowest level in more than thirty years outside the pandemic,

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Speaker 1: Commonwealth Bank backflips on new fees and Black Friday sales

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Speaker 1: jump as customers plan for Christmas. Plus plenty on markets,

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Speaker 1: and an extraordinary twenty four hours in South Korea. Welcome

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

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Speaker 1: make their own decisions. It is Thursday, the fifth of

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Speaker 1: 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, Cracking. Day of news.

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Speaker 1: Extraordinary day, Sean all round. The main story this morning

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Speaker 1: is a big one. The Australian economy grew by just

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Speaker 1: zero point three percent in the September quarter, taking annual

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Speaker 1: growth to less than one percent. That's its lowest level

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Speaker 1: since the early nineties if you exclude the COVID pandemic,

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Speaker 1: which was by all accounts just an anomaly and anomally.

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Speaker 2: That's right. The pace of growth was actually better than

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Speaker 2: the zero point two percent recorded in the Dune quarter.

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Speaker 2: That's a quarterly figure, but that annual rate zero point

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Speaker 2: eight percent not a lot to crow about. The trend

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Speaker 2: in terms of growth is certainly down. The good news

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Speaker 2: is that the economists think that we've likely hit the

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Speaker 2: low point of economic growth and from here on things

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Speaker 2: will improve, albeit slowly. Why do we know this? The

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Speaker 2: National accounts from the Australian Bureau of Statistics were released yesterday.

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Speaker 2: What are the national accounts? Basically they're the best overall

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Speaker 2: snapshot of what's going on in the economy. We get

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Speaker 2: it once a quarter. I would say it's an economist dream, Michael.

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Speaker 1: It's just because of the wealth of data that's in

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Speaker 1: this exactly.

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Speaker 2: That's right for we me immortals. We rely on those

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Speaker 2: economists to tell us what it's saying. But you know,

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Speaker 2: it is a wealth of knowledge. The reason there was

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Speaker 2: growth in the September quarter was government spending and government

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Speaker 2: spending and government spending, I think energy rebates, tax cuts,

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Speaker 2: health and disability support payments, defense spending. Without that we

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Speaker 2: would have gone backwards, without a doubt. Trade exports minus

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Speaker 2: imports and residential construction added slightly to growth, while lower

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Speaker 2: consumer spending detracted from it. Inventries is in another big

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Speaker 2: part of the economy. It had a big negative effect.

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Speaker 2: You might think a rundown in inventories is a positive

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Speaker 2: thing because people are buying stuff. It's actually a negative

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Speaker 2: because it suggests businesses aren't buying or producing as many

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Speaker 2: goods and services as they might have. Households are saving

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Speaker 2: about three percent of their income. It's actually relatively low. Now,

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Speaker 2: economists talk about something called per capita GDP that's actually

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Speaker 2: economic growth per person. It's a better measure of living

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Speaker 2: standards really, rather than the overall number. It fell by

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Speaker 2: zero point three percent. Population growth outpaced economic growth. As

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Speaker 2: a result, per capita GDP went backwards. In fact, it's

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Speaker 2: been going backwards for the past seven quarters, which is

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Speaker 2: a new record. Probably not on the government once.

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Speaker 1: I can't imagine it would, right, And Sean just one point,

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Speaker 1: I just need to it's a point of order. Really,

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Speaker 1: you've just done like a great job of explaining all

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Speaker 1: of this, and you talk about how we meremmortals need

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Speaker 1: the economists. You were downplaying your own credentials here. You

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Speaker 1: are an economist by training, by background, and really for

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Speaker 1: new listeners, you need to know that what you're getting

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Speaker 1: right now is pretty solid analysis. I can have a

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Speaker 1: crack at it, but it won't be anywhere near as.

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Speaker 2: Good assurance might be more entertaining that.

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Speaker 1: Yeah, possibly there'll be a lot more innuendo. I suspect

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Speaker 1: in what I say, Sean.

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Speaker 2: The final thing I want to say is productivity growth.

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Speaker 2: Lots of people talk about productivity growth. It's output per

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Speaker 2: unit of input. So what we kind of get out

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Speaker 2: given all the resources we put into something disappointing again,

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Speaker 2: dropping by zero point four percent over the quarter. It's

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Speaker 2: the piece of the economic disord puzzle that we're missing

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Speaker 2: at the moment. It really should be closer to one percent.

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Speaker 2: You need productivity growth because if you're getting more stuff

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Speaker 2: out of the same amount of inputs, then the quality

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Speaker 2: of life is improving. Basically, that's how progress occurs. That's

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Speaker 2: not happening at the moment.

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Speaker 1: So probably this was worse than expected yesterday, wasn't it.

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Speaker 1: So is it all doom and gloom in that case?

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Speaker 1: I'm assuming that it is, because it did sound quite

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Speaker 1: negative while we were talking before.

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Speaker 2: Surely, Michael, we've been doing this show for what four

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Speaker 2: and a half years, Yes, and surely you've learned the

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Speaker 2: great thing about economics. For every good news bit of

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Speaker 2: a story, there's bad news. And for every bad news

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Speaker 2: bit of a story, there's good news. So we've been

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Speaker 2: talking bad news so far.

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Speaker 1: Right, Give us the good, Give us the good.

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Speaker 2: Well, it's backward looking the national accounts shows us what

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Speaker 2: happened in the September quarter. Data for the current quarter,

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Speaker 2: the December quarter, including retail sales, suggests just a bit

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Speaker 2: of an improvement, enough for economists to say we've been

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Speaker 2: through the worst. Having said that, the data was pretty underwhelming.

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Speaker 2: Even Federal treasure Jim Chalmers was struggling yesterday. He blamed

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Speaker 2: interest rates, cost of living pressures, and global uncertain days. Certainly,

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Speaker 2: there's nothing from yesterday's figures to convince the Reserve Bank

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Speaker 2: to cut rates. Unfortunately, the economy might be weak, but

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Speaker 2: inflation remains the main game. And while the unemployment rate

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Speaker 2: is low, that's what the Reserve Bank will keep its

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Speaker 2: eye on inflation. It doesn't have to worry about employment

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Speaker 2: at the moment. It does have to worry about inflation.

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Speaker 2: So those figures yesterday were very weak, But it doesn't

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Speaker 2: mean we're going to get a rate cut. Okay.

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Speaker 1: So obviously, when there's a big development in economics like this,

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Speaker 1: it has an effect on investors. It has an effect

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Speaker 1: on local share markets. What happened yesterday well.

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Speaker 2: Starting with the Aussie dollar, investors sold down the currency

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Speaker 2: to about sixty four point seven US. Since that's off

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Speaker 2: about half a cent, it reflects the fact that investors

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Speaker 2: are taking a bit. The Reserve Bank might actually have

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Speaker 2: to do something about interest rates before the middle of

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Speaker 2: next year. Certainly bond markets. Bond markets predict what future

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Speaker 2: interest rates will be. Bond markets yesterday they're pricing in

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Speaker 2: about a two and three two in three chance of

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Speaker 2: a rate cut by April next year, So that data

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Speaker 2: yesterday suggests that the Reserve Bank won't wait till the

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Speaker 2: middle of next year or beyond before cutting rates. On

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Speaker 2: the share market, the S and PASEX two hundred closed

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Speaker 2: down almost half a percent to eighty four hundred and

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Speaker 2: sixty three points. The big miners did best for forty

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Speaker 2: squ Metals, Rio and BHP all ended up around one percent.

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Speaker 2: That doesn't happen too often, or it hasn't this year anyway.

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Speaker 2: The real estate investment trusts were worst, thanks to a

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Speaker 2: sel of Goodman stock, which ended down three percent. Goodman

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Speaker 2: Group is the largest of the property companies on the ASEX.

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Speaker 2: Worthwhile mention in the banks, they were laggards. That reflects

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Speaker 2: fears about economic great So if we have an economic

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Speaker 2: slay down, people find it harder to repay their loans.

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Speaker 2: That's bad for banks Westpac, National, Australia Bank and AMS.

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Speaker 2: It all fell around one and a half percent. The

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Speaker 2: best performer on the market up five percent yesterday it

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Speaker 2: was Guzman Igomez Star Entertainment was the worst. He was

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Speaker 2: down seven percent.

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Speaker 1: Laggards is one of your favorite words. It is when

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Speaker 1: you are describing the underperformers on the on the market

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Speaker 1: praving word. Is it because you don't like to say losers?

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Speaker 2: Yeah, that's probably it. I don't like calling companies losers.

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Speaker 1: There's too much judgment in it, isn't that Whereas laggards

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Speaker 1: it's just a reflection of where they finished up on

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Speaker 1: the day.

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Speaker 2: Yeah, laggards isn't a word that people use very often,

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Speaker 2: So I like it.

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Speaker 1: You're just trying to bring it back. This is right,

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Speaker 1: a one man movement to bring bad lagguards international markets.

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Speaker 1: What's going on.

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Speaker 2: Plenty happening on Wall Street. Apple's the big story. It's

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Speaker 2: rallying hard now back to being the largest company worth

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Speaker 2: three point six seven trillion US dollars how do we

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Speaker 2: put that into Aussie I suppose it's sort of five

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Speaker 2: and a half trillion Aussie dollars. It's taken over in

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Speaker 2: video that's worth about three point four trillion US. Really

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Speaker 2: has been Apple's run in the past couple of weeks. Yesterday,

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Speaker 2: the S and P five hundred, which is the top

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Speaker 2: five hundred stocks on Wall Street that index, recorded it's

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Speaker 2: fifty fifth record high of the year. Oil prices are

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Speaker 2: also higher after the US imposed more sanctions on Iranian

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Speaker 2: crude and OPEC Plus met that OPEC plus group is

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Speaker 2: getting close to agreeing to delay output increases. Petrol prices

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Speaker 2: in some cities at the moment are relatively high now

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Speaker 2: when we talk about oil prices, that tends to flow

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Speaker 2: through to petrol prices in two or three weeks. Overall,

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Speaker 2: oil prices remain kind of low compared to the last

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Speaker 2: couple of years, but what we're sort of paying for

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Speaker 2: oil now sort of flows through in the next two

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Speaker 2: to three weeks. All I know, Michael is I filled

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Speaker 2: up yesterday and costume more than a high ndred dollars

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Speaker 2: and I wasn't happy.

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Speaker 1: I could tell you. It's this residual grumpiness around.

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Speaker 2: You, yeah, that's probably not well Bitcoin, Well, I mean

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Speaker 2: it's back to ninety six and a half thousand US

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Speaker 2: dollars a unit. Hasn't cracked that one hundred thousand US

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Speaker 2: dollars a unit. It does seem like it will at

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Speaker 2: some point.

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Speaker 1: All right, Sean, after the show stick Around, we have

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Speaker 1: an interview coming up today. Well, it's the final episode

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Speaker 1: of the season for the Property Pendulum, which is the

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Speaker 1: podcast that we do with Domain, and for the last

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Speaker 1: episode of the season we are looking at these seven

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Speaker 1: steps to reach property Nirvana in Australia. How about this.

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Speaker 1: So basically, what we've done, what Alis s Doolts and

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Speaker 1: I have done, has gone through and picked out all

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Speaker 1: of the things that you could do in the property

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Speaker 1: market in Australia to change things, to make things easier

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Speaker 1: for buyers and sellers and the market to just flow.

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Speaker 1: And we're talking about things like full transparency on price guides,

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Speaker 1: registered bidders at auctions instantly around the country, changes to

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Speaker 1: stamp duty under quoting, the way that properties themselves are listed.

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Speaker 1: We cover it all. It is in the Property Pendulum,

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Speaker 1: brought to you by Fear and Greed and Domain. It

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Speaker 1: is coming up after the show Sean. In the meantime,

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Speaker 1: though we've got a lot still to come. We'll be

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Speaker 1: back in a moment with the rest of the day's

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Speaker 1: business news Sean. The Commonwealth Bank has back down on

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Speaker 1: plans to move some customers to an account that charges

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Speaker 1: a three dollar fee for withdrawing cash over the counter

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Speaker 1: at its branches after the federal government intervened.

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Speaker 2: Treasure Jim Charmers gave the Commonwealth Bank boss that Matt

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Speaker 2: Common a call, Matt, Jim here.

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Speaker 1: Your phone as Treasurer JC or JC.

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Speaker 2: I'd say MC JC, Yeah, Jim Chalmers.

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Speaker 1: Comers, do you just know when the treasure is calling?

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Speaker 2: Oh? Here we go again.

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Speaker 1: This isn't good.

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Speaker 2: I'm done. So apparently Jim rang Matt to communicate the

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Speaker 2: government's concerns. I like the way they put that. After

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Speaker 2: the bank said it would move around one million customers

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Speaker 2: from an old account that didn't charge it with drawal

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Speaker 2: fee at branches to a new one that withdrawal fee

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Speaker 2: for cash at branches is three dollars, the decision on

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Speaker 2: Tuesday to shift those customers didn't go down well with

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Speaker 2: customers social media. Talkback radio was a light yesterday on

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Speaker 2: this issue. While the new account will remain. The bank

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Speaker 2: has slowed down shifting all customers across to it. Now, Michael,

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Speaker 2: I love a pylon, don't get me wrong. But the

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Speaker 2: new Smart Access account, which has a three dollar withdrawal fee,

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Speaker 2: is actually two dollars a month cheaper. It's other fees

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Speaker 2: are two dollars a month cheaper, and the bank estimates

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Speaker 2: common off bank reckons at ninety percent of customers would

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Speaker 2: be better off as opposed to the old Complete Access account.

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Speaker 2: Now that's assuming you don't take money out in a

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Speaker 2: So if you don't take money out of a branch,

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Speaker 2: the Smart Access account is better for you. And it's

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Speaker 2: the ninety percent of customers than the complete Access account,

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Speaker 2: And the bank actually stopped offering the Complete Access account

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Speaker 2: in twenty sixteen. So don't get me wrong, love a pylon.

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Speaker 2: But there's always two sides of the story. There are.

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Speaker 1: But it's all about the optics.

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Speaker 2: It is, particularly for the banks and supermarkets and super funds.

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Speaker 2: A lot of it's about the optics.

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Speaker 1: And when you can summarize it in this is a

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Speaker 1: three dollar fee that you weren't actually paying before, then

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Speaker 1: all of a sudden, the optics are bad. Yeah, The

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Speaker 1: numbers are in Sean from the Black Friday sales which

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Speaker 1: ended on Monday night, and the good news is spending

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Speaker 1: was up.

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Speaker 2: The Black Friday sales are now a key calendar event

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Speaker 2: for retailers in recent years have actually dragged forward Christmas sales.

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Speaker 2: Data from National Australia Bank show spending was up four

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Speaker 2: percent even though transactions were down four percent. What we

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Speaker 2: get a lot from the big banks now because they

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Speaker 2: have all the credit card and debit card data, they

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Speaker 2: come out with real time information. It's fantastic. What the

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Speaker 2: National Australian Bank data says is that they were slightly

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Speaker 2: fewer purchases of more expensive products. The bank set Australians

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Speaker 2: are spending more thoughtfully, choosing quality over quantity. There's also

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Speaker 2: a big jump in spending on experiences, with which National

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Speaker 2: Australia Bank put down to people planning ahead. For example,

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Speaker 2: there's a big jump in air ticket sales and high

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Speaker 2: car sales during the summer break, so people are thinking

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Speaker 2: more about.

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Speaker 1: It, choosing quality over quantity. Tell that to everyone who's

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Speaker 1: buying now on Timu and all of these and all

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Speaker 1: of these sites. That seems to fly in the face

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Speaker 1: of that.

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Speaker 2: Right true True True.

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Speaker 1: Sean Tabcorp boss Gil McLaughlin has successfully cut about ten

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Speaker 1: percent of the wagering Group's workforce, or about two hundred jobs,

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Speaker 1: as he attempts to simplify the business.

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Speaker 2: The jobs have gone since the annual general meeting in October,

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Speaker 2: when mister McLaughlin, who of course used to run the AFL,

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Speaker 2: flag the cuts. They've come from across the business and

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Speaker 2: there's also been a reduction in external consultants. Mister McLachlan

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Speaker 2: wants the business to be more in line with digital plays.

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Speaker 2: According to the finn Review, Tapacorp's share price tumbled in

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Speaker 2: August when the new CEO said he wouldn't hit cost

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Speaker 2: cutting targets or reach his goal of thirty percent share

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Speaker 2: of digital waging market by next year. It's down twenty

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Speaker 2: five percent for the year, including nearly two percent yesterday.

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Speaker 1: Andrew and Nikola Forrest's Mindarou Foundation has committed one hundred

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Speaker 1: million dollars to a new women's investment fund with the

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Speaker 1: goal of driving gender equality.

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Speaker 2: It's an initiative of the Future Generation, an investment house

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Speaker 2: with more than a billion dollars under management. That group,

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Speaker 2: Future Generation raises money for charities it's given about ninety

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Speaker 2: million dollars to charities in the last ten years. The

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Speaker 2: new fund, Future Generation Women, will be an unleisted trust

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Speaker 2: within that Future Generation group, All investing will be managed

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Speaker 2: by women fund managers and Future Gen boss Jeff Wilson

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Speaker 2: hopes it will help drive strong gender equity practices. The fund,

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Speaker 2: which has got a the starting capital of one hundred

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Speaker 2: million dollars from the Mindaru Foundation, will have no management

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Speaker 2: or performance fees for investors. The goal is to provide

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Speaker 2: strong returns. One percent of assets each year will be

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Speaker 2: delivered to nonprofits that advance economic equality and opportunity for

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Speaker 2: women and their children in Australia.

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Speaker 1: Promedicus's share price, it's got to be an easier way

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Speaker 1: of saying that. The share price of Promedicus There we

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Speaker 1: Go jumped two percent yesterday Sean, pushing its value to

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Speaker 1: more than twenty seven billion dollars after its founders said

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Speaker 1: they don't plan to sell any shares in the foreseeable future.

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Speaker 1: That's a sign of confidence in what they're doing, isn't it.

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Speaker 2: Yeah, it's sort of. There's a bit to this story.

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Speaker 2: Promedica's cracking company imaging company think X rays it is

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Speaker 2: one of those companies where the founders are still running

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Speaker 2: the business, a guy called Sam Hubbert and Anthony Hall.

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Speaker 2: On Tuesday night they sold two million shares worth about

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Speaker 2: half a billion dollars. That spooked the market just to

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Speaker 2: touch yesterday. They are out reassuring investors. Promedicus only entered

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Speaker 2: the top one hundred stocks on the AX in March

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Speaker 2: this year. It's now a twenty a top twenty five

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Speaker 2: stock on the back of a two hundred percent jump

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Speaker 2: two hundred percent jump in its share price this year,

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Speaker 2: easily the best of the large caps. It only has

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Speaker 2: two substantial shareholders, that's mister Hoopert and mister Hall. Now

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Speaker 2: a substantial shareholder on the AX holds above five percent

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Speaker 2: of stock, that's a definition. Those two are in about

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Speaker 2: twelve billion dollars worth of stock. The problem for a

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Speaker 2: lot of investors is that because Promedicus is now so big,

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Speaker 2: they all want to buy stock. So if they run

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Speaker 2: a fund that just mirrors what's happening on the AX,

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Speaker 2: you need Promedicus stock, and so they're desperate to get

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Speaker 2: the hands on this stock. The problem is that these

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Speaker 2: two guys aren twelve billion of the twenty seven billion

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Speaker 2: dollars worth of stock. Anyway, they sold someone Tuesday night.

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Speaker 2: They're not going to sell anymore for the time being.

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Speaker 1: All right, Sean, just quickly. It might be an end

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Speaker 1: of year thing. But they're seen to be a bit

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Speaker 1: of corporate activity around the place at the moment. Everyone

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Speaker 1: rushing to get things done.

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Speaker 2: Yeah, Worth mentioning a couple of them. Rare Tinto in Japan.

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Speaker 2: Cinmatomo Metal Mining have done a joint venture to develop

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Speaker 2: the Winnu copper goal project in the Great Sandy Desert

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Speaker 2: in Western Australia. Cinmatomo will buy a thirty percent to

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Speaker 2: take in the project for a bit over six hundred

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Speaker 2: million dollars. P Cific Equity Partners has officially agreed to

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Speaker 2: acquire leasing group SG Fleet with about one point four

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Speaker 2: billion dollars. Investors piled into management software company Bravura yesterday

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Speaker 2: after it upgraded its earnings guidance for this financial year.

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Speaker 2: Its share price finished up twenty one percent and shares

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Speaker 2: an Auckland International Airport and Today Trading halt as its

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Speaker 2: major shareholder, which is the Auckland Council wants to sell

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Speaker 2: down a billion dollars worth of stock or.

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Speaker 1: So okay, turning to international news, and one story is

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Speaker 1: really dominated over the last twenty four hours. South Korea

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Speaker 1: is in crisis after the president yunsukyol imposed martial law

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Speaker 1: on the country, briefly back down, and thereby triggered a

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Speaker 1: constitutional crisis.

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Speaker 2: Remarkable few hours in that country. Yune declared martial law

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Speaker 2: in an unscheduled broadcast on Tuesday night, saying he needed

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Speaker 2: to purge the country of anti state forces and normalize

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Speaker 2: the country. He then backed down a couple of hours

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Speaker 2: later after his idea was unanimously rejected by the opposition

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Speaker 2: controlled legislature. Troops have been sent to surround the parliament,

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Speaker 2: but then they were withdrawn. The whole bid to impose

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Speaker 2: martial law was the first time it's happened since democracy

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Speaker 2: has been restored to South Korea back in the nineteen eighties.

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Speaker 2: Opposition parties are now saying Yune's declaration of martial law

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Speaker 2: is a grave violation of the constitution and an act

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Speaker 2: of treason. Even his own party, according to media reports,

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Speaker 2: are wondering whether or not he can stay after doing it.

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Speaker 2: It all occurred in about a six hour period, but

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Speaker 2: has actually turned South Korean politics on its head. South Korea,

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Speaker 2: of course, is very important because of its relationship with

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Speaker 2: China good and bad, but also its place in the

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Speaker 2: region and relationship with other major powers such as the US.

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Speaker 1: There's also home to some really big companies as well,

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Speaker 1: things like Samsung, Samsung, LG, Hyundai, Kia, kind of all

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Speaker 1: of these household names that are all based in South Korea,

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Speaker 1: so obviously anything that happens there has a significant flow

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Speaker 1: on effect to the broader kind of business and investing

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Speaker 1: community as well. Seawan one last one to finish off.

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Speaker 1: Major US retailers such as Amazon, Walmart, and Target are

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Speaker 1: increasingly competing on the basis of service rather than price,

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Speaker 1: with fast delivery believe it or not, being a trigger

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Speaker 1: for customers to spend more. I completely am on board

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Speaker 1: with this.

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Speaker 2: The big retailer is introduced to day than one day

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Speaker 2: than same day delivery, often for a fee. Now, according

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Speaker 2: to reporting the New York Times, the retailers are found

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Speaker 2: speedy to delivery makes customers both more loyal and more

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Speaker 2: willing to spend money. Amazon it says the faster they deliver,

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Speaker 2: the more people come back. A spokesperson quite funny, she goes,

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Speaker 2: it's not exactly Rocket science, but it was an AHA

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Speaker 2: moment for us. So Amazon's redesigned for full centers to

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Speaker 2: get stuff out the door fast. They've tried stuff like

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Speaker 2: drones and that you can only carry five pounds on

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Speaker 2: a drones. It hasn't worked so well, but that's what

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Speaker 2: Amazon's doing. Walmart is now doing delivery in as little

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Speaker 2: as thirty minutes. They have a physical advantage of having

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Speaker 2: stores close to people. In fact, Walmart reckons they can

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Speaker 2: do same day delivery to eighty six percent of households

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Speaker 2: in the US from its four thousand, six hundred stores.

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Speaker 2: Delivery sales from Walmart are up fifty percent over the

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Speaker 2: last year. Target isn't quite as aggressive, but delivery times

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Speaker 2: are nearly a day faster than a year ago. It's

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Speaker 2: purchased a delivery or did purchase delivery company in twenty

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Speaker 2: seventeen for this reason. Bottom line to this is suddenly Amazon,

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Speaker 2: Walmart target these major retailers are starting to compete on

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Speaker 2: service not price.

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Speaker 1: Yeah, great story, all right. Up next is the property Pendulum,

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Speaker 1: brought to you by Fear and Greed and Domain Today's

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Speaker 1: topic seven steps to property Nirvana. It is coming up

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Speaker 1: in the Fear and Greed playlist on your podcast platform

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Speaker 1: or at Fearangreed dot com. Today you thank you very much.

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Speaker 2: Sean, thank you, Michael.

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Speaker 1: It is Thursday, the fifth 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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00:21:26,960 --> 00:21:31,040
Speaker 1: online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael

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00:21:31,040 --> 00:21:33,360
Speaker 1: Thompson and that was Fear and Greed. Have a great day.