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Speaker 1: Welcome to Fear and Greed business news you can use today. Alphabet,

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Speaker 1: the parent company of Google, hits a four trillion US

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Speaker 1: dollar valuation, making it the second largest stock on Wall Street.

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Speaker 1: The federal opposition balks at supporting Labour's anti vilification laws,

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Speaker 1: and a record year for ETFs in Australia. Plus, house

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Speaker 1: and unit rents are set to stabilize after years of growth,

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Speaker 1: and China's trade surplus hits a record one point two

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Speaker 1: trillion US dollars as Donald Trump's tariffs reorder trade flows.

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Speaker 1: It is Thursday, the fifteenth of January twenty twenty six.

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Speaker 1: I'm Michael Thompson and good morning Sean Aylmer.

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Speaker 2: Good morning, Michael, Sean.

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Speaker 1: The main story this morning, Google's parent company, Alphabet, has

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Speaker 1: become the fourth big tech group to hit a four

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Speaker 1: trillion US dollar market valuation, fueled by investor optimism that

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Speaker 1: its AI models can compete with rivals such as as

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Speaker 1: Open Ai. It's now the second largest company on Wall Street,

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Speaker 1: behind in Video.

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Speaker 3: Quite a remarkable story this one. Alphabet hit the mark

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Speaker 3: this week after the announcement of a deal with Apple,

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Speaker 3: former enemies. I would suggest Alphabet and Apple, well, they've

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Speaker 3: done a deal that involved Google's Gemini AI models powering

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Speaker 3: a revamped version of Siri, the iPhone's virtual assistant. Alphabet's

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Speaker 3: share prices up more than six percent in the past month.

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Speaker 3: Its market valuation is right on four trillion US dollars.

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Speaker 3: Both Microsoft and Apple past that mark last year, but

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Speaker 3: they've fallen back. The now smaller than Alphabet and VideA

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Speaker 3: is worth four point five trillion US dollars, the biggest

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Speaker 3: of the lot. Alphabet has done a great job reinventing itself.

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Speaker 3: Twolve months ago, investors fear that its cash cow search

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Speaker 3: engine would be overshadowed by AI things like Chat GPT

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Speaker 3: taking over Google Search is also facing plenty of regulatory

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Speaker 3: pressures at home in Europe and other places. However, it

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Speaker 3: shifted into AI, started competing with chat GPT via its

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Speaker 3: Gemini model, and it's been successful, very successful. Share prices

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Speaker 3: doubled since April last year. Talk about rising of the

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Speaker 3: phoenix or something like that. I mean, it's not you

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Speaker 3: know it was. It wasn't dead, right, but twelve months

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Speaker 3: ago people were riding off this company. Wow, hasn't it

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Speaker 3: turned around?

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Speaker 1: It is an amazing result, but it is just still staggering.

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Speaker 1: Just how big Nvideo is as well, and when you

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Speaker 1: consider there is still half a trillion dollars difference between

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Speaker 1: the two. But this is I mean, you're right, Alphabet,

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Speaker 1: that is a pretty good effort. And think about the

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Speaker 1: fact that Wall Street has hit record highs in recent sessions.

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Speaker 3: Yeah, so, I mean, just shows how well it's done.

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Speaker 3: On Tuesday morning, Australian time, SMP five hundred hit a

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Speaker 3: new all time high, notwithstanding concerns over Donald Trump's comments

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Speaker 3: about Federal Reserve cheap Dermee Powell, mixed economic news and

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Speaker 3: a falling US dollar, and Video and Alphabet have done well,

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Speaker 3: but so too a bunch of no tech stocks. So

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Speaker 3: the one I've been watching recently is Walmart, the massive

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Speaker 3: retailer that's just joined the top one hundred stocks. It's

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Speaker 3: done really well in the market, has come off in

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Speaker 3: the past session or two. But equities are doing very

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Speaker 3: well in the US at the moment.

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Speaker 1: It's interesting talking about Walmart. We were talking yesterday about

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Speaker 1: Wolworths really incorporating AI into the ordering of groceries and

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Speaker 1: the selection of items from the stores. And I think

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Speaker 1: Walmart's done that in a big way. In the US

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Speaker 1: as well, and so maybe maybe that's not a coincidence

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Speaker 1: that it's going pretty well.

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Speaker 3: Yeah. Well, the other thing I was going to say

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Speaker 3: that Walmart has done really well is online shopping. It

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Speaker 3: realized it had the best distributions centers in the country

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Speaker 3: by being close to customers because it's got all its shops.

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Speaker 3: So rather than having a single distribution center, it made

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Speaker 3: its Walmart stores distribution centers, and it did really well

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Speaker 3: online as a result.

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Speaker 1: Yeah clever. Now you mentioned Jerome Powell before yesterday, Reserve

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Speaker 1: Bank Governor Michelle Bullock here obviously probably didn't need to

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Speaker 1: point that out, did I. Sean joined thirteen other central

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Speaker 1: bank governors criticizing the Trump administration's decision to investigate possible

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Speaker 1: criminal charges against Powell, charges that Powell said a response

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Speaker 1: to the Fed not doing what the president wants, that

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Speaker 1: there's nothing to do with the actual charges, that it.

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Speaker 2: Is all political.

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Speaker 3: Yes, So, the heads of central banks from Europe, the UK, Canada,

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Speaker 3: and Australia and New Zealand said they stand in full

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Speaker 3: solidarity with Powell, adding that independence of central banks is

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Speaker 3: a cornerstone of price, financial and economic instability. Meanwhile, the

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Speaker 3: President doubled down on his criticism of Powell, saying he

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Speaker 3: was either incompetent or crooked. Lad He said, and I

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Speaker 3: quote that jerk will be gone soon.

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Speaker 1: God, not much dignity in any of this is there.

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Speaker 1: It's just so I felt sorry for the Governor of

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Speaker 1: the Central Bank of New zeal yesterday, who was one

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Speaker 1: of those, as you mentioned, that came out in support

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Speaker 1: of Jerome Powell and was slapped down by the Foreign

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Speaker 1: Minister who issued a fairly kind of blunt rebuke and said,

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Speaker 1: and I think the quote was that the Reserve Bank

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Speaker 1: of New Zealand has no role, nor should it involve

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Speaker 1: itself in US domestic politics. We remind the governor to

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Speaker 1: stay in her New Zealand lane and stick to domestic policy.

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Speaker 1: I'm like, okay, probably could have been a conversation held

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Speaker 1: behind closed doors. All do it via social media tweet,

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Speaker 1: as was done in that particular case. Local markets, what's

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Speaker 1: going on?

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Speaker 3: SMPA six two hundred feet up slightly to eight and

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Speaker 3: twenty one points. Broadly, the energy stocks did well, as

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Speaker 3: did some of the minors. Financials did worse. The market,

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Speaker 3: of course, is keeping a close eye on when as

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Speaker 3: seems inevitable BHP overtakes Commonwealth Bank to become the largest

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Speaker 3: company on the burs. PHP was up one percent yesterday's

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Speaker 3: CBA was off one percent, means the gap in the

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Speaker 3: market cap is now down to twelve billion dollars. While

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Speaker 3: on the banks, Comic Pack hasn't had a good twelve months,

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Speaker 3: in large part because it rent so hard early last year,

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Speaker 3: the other three have had a really good time, though Westpac, National,

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Speaker 3: Australian Bank and AMS ed. The big banks now comprise

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Speaker 3: four of the five largest companies on the AX, PHP

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Speaker 3: of course, being the other one, followed by Wes Farmer's

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Speaker 3: cslum Ac Quarry Group.

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Speaker 1: All Right, quick Breakshan back in a moment with the

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

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Speaker 2: Sean.

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Speaker 1: The federal opposition is likely to attempt to block anti

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Speaker 1: vilification laws in response to the Bondeo massacre when Parliament

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Speaker 1: sits next week, but the government the Labor government could

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Speaker 1: still pass legislation with the support of the Greens.

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Speaker 3: Coalition MPs Tim Wilson and Andrew Hasty yesterday raised concerns

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Speaker 3: about free speech if Labour's hate laws passed. Last night,

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Speaker 3: Coalition leader Susan Lee convened a meeting of her most

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Speaker 3: senior MPs and expressed serious reservations about the rushed nature

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Speaker 3: of the bill and said the opposition could not be

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Speaker 3: expected to vote for it.

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Speaker 2: According to media.

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Speaker 3: Reports, she cited the lack of adequate explanation from bureaucrats

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Speaker 3: on the scope of the bill during this week's parliamentary inquiry.

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Speaker 3: There are concerns over the religious text exemption and fears

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Speaker 3: the racial vilification provision is too broad. The country's top

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Speaker 3: Muslim body yesterday joined with major Christian and Jewish groups

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Speaker 3: in calling for a delay to allow more time to

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Speaker 3: review the scope and impact of legislation.

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Speaker 1: Now there's good news for renters Sean, but perhaps not

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Speaker 1: necessarily for investors. Australia's rental market are slowing across many

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Speaker 1: cities as renters reached the limit of what they can afford.

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Speaker 1: This is according to Domain's December quarter rent report.

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Speaker 4: After several years of sharp rental increases, growth has eased

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Speaker 4: and is now uneven, varing by city and by whether

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Speaker 4: people are renting houses or units. Rents are still high,

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Speaker 4: but increases a slower and more selective, a trend that

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Speaker 4: is expected to can ditin you also, vacancy rates remain low,

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Speaker 4: suggesting the landlord still holds the upper hand. And all this,

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Speaker 4: house rents across the combined capital cities rows two point

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Speaker 4: three percent over the quarter this December quarter, it's about

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Speaker 4: fifteen dollars first increase in a year. Adelaide, Perth and

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Speaker 4: Darwin recorded no change, but rents in all three cities

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Speaker 4: remained pretty high. Melbourn is the only capital city where

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Speaker 4: house rents are lower than a year ago. Brisbane's the

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Speaker 4: only capital city where rents are clearly picking up again.

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Speaker 4: Also of note, the gap between house and unit rents

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Speaker 4: has narrowed, particularly in places like Perth and Brisbane.

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Speaker 1: Okay. Now, Australia's exchange traded fund market ended twenty twenty

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Speaker 1: five worth three hundred and thirty one billion dollars, with

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Speaker 1: funds under management rising by thirty five percent over the year.

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Speaker 1: The growth in ETFs is huge phenomenal.

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Speaker 3: There are now four hundred and sixty two ETF products

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Speaker 3: in the market, driven by fifty three billion dollars in

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Speaker 3: net inflows last year. Positive market performance helped two and

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Speaker 3: unlisted funds converted into active ETFs. Precious metals lead performance

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Speaker 3: in December. You know, gold, silver, Platinum Paladin. They all rallied,

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Speaker 3: according to ETF provider global X, and that certainly helped

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Speaker 3: the ETFs who followed those commodities.

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Speaker 1: How about this one, Sean Bluescope Steel Yesterday's surprised investors

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Speaker 1: by announcing a special four hundred and thirty eight million

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Speaker 1: dollar dividend, just days after rejecting a thirteen point two

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Speaker 1: billion dollar takeover offer that had been lobbed by the

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Speaker 1: Stokes family controlled industrial conglomerate SGH Limited and its American

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Speaker 1: bidding partner, Steel Dynamics.

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Speaker 3: The country's large to steel makers, said the special payment

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Speaker 3: of one dollar per share, to be paid on February

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Speaker 3: twenty four, was not designed to keep shareholders happy after

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Speaker 3: last week's rejection. Instead, the company said it had a surplus.

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Speaker 3: It had surplus cash. That's according to the fin review,

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Speaker 3: No one's really buying that. Michael Manager said there was

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Speaker 3: no doubt that the special dividend, which was not expected,

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Speaker 3: was gamesmanship. As a the stakes company and Steel Dynamics

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Speaker 3: consider their next move. SGACH and Steal Dynamics want to

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Speaker 3: split Bluescope into two, with the nastack listed producer Steal

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Speaker 3: Dynamics to control the North American business that includes a

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Speaker 3: flagship north Star mill in the Ohio. Bluescope's share price

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Speaker 3: closed slightly lower yesterday.

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Speaker 1: Okay, turning to international news now, China's trade surplus. I

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Speaker 1: mentioned this at the top of the show. It has

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Speaker 1: climbed to one point two trillion dollars in twenty twenty five.

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Speaker 1: That is the largest ever recorded by an economy, extending

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Speaker 1: a record run. As the tariff war, of course, started

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Speaker 1: by President Donald Trump, sent exports in search of markets

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Speaker 1: beyond the.

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Speaker 3: US, So the story here is pretty much about all

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Speaker 3: the economies outside the US, so shipments to reach from

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Speaker 3: China regions like South East Asia, Latin America, Europe basically

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Speaker 3: made up for the drop in sales to the US. Yes,

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Speaker 3: overall exports were up about six point six percent from

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Speaker 3: a year earlier. Notwithstanding the imposition of tariffs on the US.

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Speaker 3: The US share of China's title exports fell to a

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Speaker 3: historic eleven percent in twenty twenty five. So about six

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Speaker 3: or seven years ago that eleven percent was actually nineteen percent.

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Speaker 3: So Trump's tariffs have changed the way global trade flows

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Speaker 3: are flowing. China is not selling anywhere near as much

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Speaker 3: into the US, but Wow, is it flooding other markets now?

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Speaker 3: Might be good for consumers, but of course that has

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Speaker 3: flow on effects for European producers, Latin American producers, Southeast

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Speaker 3: Asian producers, because China is a monster in many areas.

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Speaker 3: So what's really fascinating about this record trade surplus? It

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Speaker 3: just shows China's power and how the US tariffs might

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Speaker 3: be good for consumers but not necessarily producers in some

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Speaker 3: of these other econo.

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Speaker 1: How you talk about it reordering trade flows around the world.

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Speaker 1: Is that a permanent thing, do you think or is

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Speaker 1: it the case that if these tariffs were to be lifted,

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Speaker 1: say in kind of three years, if there was a

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Speaker 1: change in president in the US and the tariffs were removed,

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Speaker 1: when everything just go back to normal. Or is it

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Speaker 1: the case that once these markets new markets have been

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Speaker 1: established that it's kind of like, has this caused a

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Speaker 1: permanent change to global trade?

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Speaker 4: Do you think.

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Speaker 2: It's somewhere in between.

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Speaker 3: There are some things that you just can't wind back,

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Speaker 3: whereas you know, like Australian wine producers when they couldn't

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Speaker 3: export to China something China dropped the tariffs and we

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Speaker 3: started selling into China again. So there will be a

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Speaker 3: bit of a winding back of it. But I think

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Speaker 3: some of the re kind of configuration of these trade

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Speaker 3: flaws will be permanent because China's found all these great

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Speaker 3: new markets, and what it will also do is make

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Speaker 3: some of the producers in these new markets South Stays,

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Speaker 3: for example, actually think about what they're best at, what

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Speaker 3: they're best producing at. I wouldn't be surprised at long term.

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Speaker 3: You know, the economy that misses out in all this

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Speaker 3: is actually the US because of their protectionists, whereas these

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Speaker 3: other economies they're going to you know what, you're going

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Speaker 3: to get cheap at consumer goods, but producers are actually

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Speaker 3: going to have to become a lot more efficient too,

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Speaker 3: and they will be much more competitive.

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Speaker 1: It's fascinating. It is fascinating watching this play out now.

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Speaker 1: The crisis in Iran is continuing. Sean and US President

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Speaker 1: Donald Trump yesterday said the US will take very strong

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Speaker 1: action against Iran if it executes protesters, after earlier telling

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Speaker 1: Iranians that help is on the way.

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Speaker 3: They came as relatives of twenty six year old Earthen Sultani,

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Speaker 3: who was detained last week, told BBC that he was

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Speaker 3: due to be executed overnight, more than twenty four hundred

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Speaker 3: anti government demonstrators have been killed in a violent crackdown

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Speaker 3: by Iranian authorities. That's according to a US based rights

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Speaker 3: groups been weighing military and other options in response. He's

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Speaker 3: already in ounce twenty five percent tariffs in any country

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Speaker 3: trading with Iran. Iran's government, for its part, has accused

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Speaker 3: US of seeking to manufactory pretext for military intervention, saying

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Speaker 3: this playbook has failed before.

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Speaker 2: Of course, there's an internet blackout still going on.

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Speaker 3: Some people in Iran are able to call people outside

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Speaker 3: the country, but it's very difficult to.

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Speaker 2: Get and verify information.

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Speaker 3: According to the BBC, I think what was it? It

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Speaker 3: really is on a nice edge this and Donald Trump

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Speaker 3: has shown that he's prepared to take military action.

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Speaker 2: So we just have to sort of wait with baited breath.

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Speaker 1: I suppose, yeah, indeed, Okay. Coming up in the Fear

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Speaker 1: and Greed playlist a little bit later on today, Sean,

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Speaker 1: is the next installment of the Fear and Greed summer series.

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Speaker 1: You're speaking again today with Lucy Ellis, the chief economist

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Speaker 1: at Westpac, and we're just talking about our international trade

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Speaker 1: and tariff's and today the topic of conversation is the

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Speaker 1: global economic outlook and basically what Westpac is expecting to

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Speaker 1: see play out in twenty twenty six.

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Speaker 3: Yeah, exactly. I mean, Lucy has great insights into the

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Speaker 3: economic world. She was actually in the media yesterday too

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Speaker 3: for supporting comments, well sort of just suggesting that Jerome Powell,

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Speaker 3: the pressure on him, probably wasn't great for global economic policy.

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Speaker 2: More broadly.

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Speaker 3: We don't talk about that specifically this morning, but we

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Speaker 3: do talk about the outlook.

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Speaker 2: Yeah.

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Speaker 1: And the other thing that Lucy talks about, and I'm

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Speaker 1: not going to spoil it, is the nine billion dollar

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Speaker 1: export that nobody talks about. Yes, right, a fast growing

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Speaker 1: but I suppose underappreciated success story. And it's a really

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Speaker 1: interesting conversation. So that's coming out today. It'll be in

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Speaker 1: your playlist at around about one o'clock around good lunchtime listening.

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Speaker 1: This one is part of our summer series thanks to Westpac.

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Speaker 1: Thank you very much, Sean, thank you, Michael. It is Thursday,

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Speaker 1: the fifteenth of January twenty twenty six. Make sure you're

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Speaker 1: following the podcast and please join us on line, on LinkedIn, Instagram,

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Speaker 1: ex TikTok and Facebook. I'm Michael Thompson, and that was

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Speaker 1: fear and greed. Have a great day.