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Speaker 1: Commonwealth Bank share price hits a new high as bank

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Speaker 1: stock surge even though most professional investors think they're over valued.

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Speaker 1: Chip maker Nvidia knocks off Apple as the second biggest

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Speaker 1: company on Wall Street behind Microsoft, and unions want eighteen

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Speaker 1: and nineteen year olds to be paid as adults. 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 Friday, the seventh of

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

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Speaker 1: Sean Aylmer.

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Speaker 2: Good morning, Michael, Sean.

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Speaker 1: The main story this morning the banking sector is booming,

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Speaker 1: with the Commonwealth Bank hitting a new all time high

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Speaker 1: yesterday of one hundred and twenty five dollars and ninety

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Speaker 1: seven cents. Yes, Michael, It's share price has now jumped

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Speaker 1: thirty percent over the past year, and Commonwealth Bank isn't

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Speaker 1: even the best performer of the big four banks over

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Speaker 1: the last twelve months. Nabs up thirty eight percent over

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Speaker 1: the past year, in close to nine year highs. Westpack

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Speaker 1: is up thirty five percent over the past year, it

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Speaker 1: isn't far off five year highs, and A and Z

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Speaker 1: is up twenty eight percent near seven year highs. That's

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Speaker 1: despite net interest margins for the banks. That's the difference

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Speaker 1: between what a bank receives and loans and pays out

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Speaker 1: on deposits. Narrowing the net interest margin is basically a

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Speaker 1: proxy for profit for the big four banks. It also

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Speaker 1: comes as loaner wears, customers fall behind inmpayments are rising,

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Speaker 1: comes as banks on a historical perspective are already very

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Speaker 1: very expensive, and it comes as the economy slows, which

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Speaker 1: should affect business and personal lending. Many banking analysts have

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Speaker 1: sell recommendations on the major banks and have had for

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Speaker 1: a while, but they just keep performing, at least on

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Speaker 1: the share market. Sean, you have just given us what

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Speaker 1: four or five reasons as to why this shouldn't be happening.

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Speaker 1: So why is it happening?

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Speaker 2: Well, there's all sorts of theories around the place. All

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Speaker 2: the banks, particularly Commonwealth Bank with its nine hundred thousand shareholders,

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Speaker 2: have many retail investors and they like the divinends on offer.

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Speaker 2: Having said that, the share price has risen so much

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Speaker 2: that in some cases someone investing today would do better

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Speaker 2: off putting their money in the bank and getting a

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Speaker 2: deposit rate, because that would be higher than the dividend yield,

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Speaker 2: quite incredible. Also, the sale of bank stock could trigger

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Speaker 2: a sizable cabal gain. Plenty of investors don't want that.

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Speaker 2: There's also been buying of bank stocks from offshore investors

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Speaker 2: such as pension funds. This is a good reason why

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Speaker 2: Commonwealth Bank seems to have done so well. If they're

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Speaker 2: passive investors, then they need to buy all the bank

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Speaker 2: shares because they're such a big part of the ax. Also,

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Speaker 2: money in Asia fleeing China could end up in Australia.

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Speaker 2: That could help the banks as well. In short, Michael,

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Speaker 2: there's no great answer to why the banks are doing

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Speaker 2: so well. They just are.

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Speaker 1: It's just that is fascinating. That is a terrific story.

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Speaker 1: It's just an extraordinary thing to watch. Sean taking a

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Speaker 1: broader look at local markets. Now, what happened yesterday?

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Speaker 2: There's in PAX two hundred closed up zero point seven

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Speaker 2: and twenty two points. The tech companies did best financials,

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Speaker 2: of course, we just talked about the banks, they did

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Speaker 2: pretty well. Healthcare industrials also did well. Ceusel West, Farmers

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Speaker 2: and a Quarry all jumped one percent or more. Wistech

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Speaker 2: Global rows three percent once again, the miners and the

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Speaker 2: energy companies underperformed. Plenty of corporate news around Auckland. Casino

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Speaker 2: operate A sky City cut its earnings guidance on the

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Speaker 2: back of the recession. That's in New Zealand. At the moment,

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Speaker 2: is share price fell fourteen percent. Bio pharmaceutical developer Telix

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Speaker 2: Pharmaceutical said it's going to list on the Nasdack in

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Speaker 2: the US and we'll raise three hundred million dollars. Mineral Resources,

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Speaker 2: which is an iron ore and lithium group, it sold

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Speaker 2: a forty nine percent interest in its Onslow iron ore

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Speaker 2: project Hall Road to Morgan Stanley Infrastructure Partners for one

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Speaker 2: point three billion dollars. It's a result its share price

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Speaker 2: fell slightly. There are also a few stocks yesterday to

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Speaker 2: hit all time highs. Data Center Operating Next TODC was one,

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Speaker 2: so too, software company Technology one and funds At Management

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Speaker 2: Group Regal Partners.

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Speaker 1: All right, Jean, we need to talk about international markets

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Speaker 1: and this is thanks to blue chip communication, the experts

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Speaker 1: helping financial services companies market communicate and grow. Because I

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Speaker 1: want you to tell us about in video.

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Speaker 2: Yes, it's share price surged yesterday morning. The chip makers

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Speaker 2: now worth three point zero one trillion US dollars, surpassing

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Speaker 2: Apple as the second largest company on Wall Street. Apple

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Speaker 2: also rallied it's worth three trillion dollars. So in Vidia's

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Speaker 2: market cap is point zero one trillion dollars more. What

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Speaker 2: is that, Michael, point zero one trillion dollars.

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Speaker 1: That would be ten billion, ten billion.

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Speaker 2: Thank you. Microsoft is the largest company on Wall Street,

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Speaker 2: worth three point one five trillion US dollars.

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Speaker 1: Now.

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Speaker 2: The last time Video was worth more than Apple was

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Speaker 2: in two thousand and two, five years before the first

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Speaker 2: iPhone was released. According to Bloomberg. At the time, both

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Speaker 2: companies were worth less than ten billion US dollars each.

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Speaker 2: Ten billion to three trillion not bad, and video stock

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Speaker 2: has jumped nearly two hundred percent since late life las year.

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Speaker 2: One person who's really loving the surge is CEO Jensen Huang.

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Speaker 2: His wealth, which is almost all in n video stock,

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Speaker 2: jumped five billion dollars on Wednesday night. Now he's worth

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Speaker 2: about one hundred and seven point four billion dollars according

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Speaker 2: to Bloomberg Billionaires Index. How's that that.

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Speaker 1: Is just an amazing story? From ten billion dollars to

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Speaker 1: three trillion, and now the fact is that it's just

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Speaker 1: that ten billion dollars. That's the difference between the two

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Speaker 1: of them.

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Speaker 2: It's just incredible, incredible, interesting happenings in bond markets. Mike,

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Speaker 2: don't roll your eyes. I can see you. I can

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Speaker 2: see you know.

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Speaker 1: I have nothing but respect for bonds. And remember how

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Speaker 1: we talked previously about the potential. Maybe maybe for the

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Speaker 1: marketers that work in When I say marketers, marketing people,

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Speaker 1: maybe rename them James bonds. And then you'll have me

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Speaker 1: listening with baited breath.

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Speaker 2: You know, the quality, stylish bonds, they're probably the government bonds.

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Speaker 2: They're the James bonds. You've got the high risk, high

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Speaker 2: yielding bonds. I think we're calling those ones. They're trying

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Speaker 2: to think of some bonds in the middle. We're struggling

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Speaker 2: with that. But if anyone's got any ideas, bring him

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Speaker 2: in anyway.

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Speaker 1: I love that they are the two extremes. We've just

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Speaker 1: got the James bonds and the Allen bonds, and then

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Speaker 1: everything else is just in the middle. So we do

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Speaker 1: need to workshop this more, but please go on.

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Speaker 2: Well, the James bond yields and the US fell again

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Speaker 2: over the past twenty four hours. They're down twenty basis

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Speaker 2: points in the last month. The James Bond yils reflect

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Speaker 2: interest rate expectations, so falling yeels in this instance suggests

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Speaker 2: investors are increasingly confident that US interest rates beulfore later

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Speaker 2: this year. Well done, James, that's helped the Ausie dollar.

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Speaker 2: It's buying around sixty six point seven US since.

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Speaker 1: Sometimes I feel genuinely sorry for what I have done

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Speaker 1: to you with this show. You came into this interfering

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Speaker 1: greed four years ago, so much credibility and just and

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Speaker 1: so serious, and now now you are talking about James

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Speaker 1: Bond and you're doing it with us straight face. I

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Speaker 1: love it now, Sean, something else, I need to very

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Speaker 1: quickly mention the interview that we have coming out after

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Speaker 1: the show. This is a good one. It's worth sticking

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Speaker 1: around for. Are you talking to Tim Burrows, owner of

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Speaker 1: the Unmade newsletter.

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Speaker 2: Tim is an the ultimate expert in media companies, and

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Speaker 2: in this instance we're talking about the outlook for the

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Speaker 2: big broadcast medium so Free too, ARETV, the radio stations,

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Speaker 2: how the platforms Meta Google are playing it. The fact

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Speaker 2: that there's a big argument at the moment about the

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Speaker 2: flow of money between the two or the two sides

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Speaker 2: at least. We talked to Tim about all those things

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Speaker 2: and what he has. He has an index, a media index,

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Speaker 2: and what it's uncovered is that basically, in the last

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Speaker 2: couple of years, the value of media stocks in the

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Speaker 2: ASEX have harved intertality compared to where they were a

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Speaker 2: couple of years ago. Not good times for some of

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Speaker 2: those traditional media companies.

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Speaker 1: No, certainly not. But it is a very good interview

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Speaker 1: and well worth a listen this morning. We'll be back

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

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Speaker 1: Sean Federal Treasurer Jim Chalmers was defending the state of

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Speaker 1: the economy yesterday, following the very weak growth figures that

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Speaker 1: came out on Wednesday.

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Speaker 2: Yes economic growth of the March quarter came in at

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Speaker 2: zero point one percent one point one percent for the year,

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Speaker 2: the weakest in more than thirty years outside the COVID period.

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Speaker 2: Of course, Dr Chalmers said the economy will continue to grow,

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Speaker 2: but quite softly. He avoided a question about a per

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Speaker 2: capita recession, which we've been in for five quarters now,

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Speaker 2: instead blaming higher interest rates. Dr Chalmers said it's important

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Speaker 2: to fight inflation without smashing the economy and to provide

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Speaker 2: cost of living help in a responsible way. He added

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Speaker 2: that he doesn't believe the tax cuts on July one

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Speaker 2: will hurt efforts to tame inflation.

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Speaker 1: Loans in the housing sector arising particularly to investors as

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Speaker 1: higher rentals attract buyers into the market.

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Speaker 2: It's kind of against what you'd expect to be happening,

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Speaker 2: so it's an interesting little story. The value of new

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Speaker 2: loans to investors for housing jumped nearly six percent in April,

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Speaker 2: thirty six percent higher than a year earlier, according to

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Speaker 2: the Australian Bureau of Statistics. Now, the value of new

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Speaker 2: loans to owner occupiers rose nearly five percent, up eighteen

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Speaker 2: percent higher than a year earlier. To first home buyers

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Speaker 2: three percent for April, nineteen percent for a year earlier.

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Speaker 2: The data suggests that in New South Wales and Queensland,

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Speaker 2: investors are basically borrowing more to take advantage of the

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Speaker 2: higher rents on offer. It's also the fact that building

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Speaker 2: costs are a lot higher, therefore people have to borrow

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Speaker 2: more money. So it probably does make sense, but at

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Speaker 2: first BLUs it just looks a bit counter to what's happening.

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Speaker 1: Yeah, you're right, and now wo'd be very interested to

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Speaker 1: see what people think of this one Sean, The Retail

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Speaker 1: and Fast Food Workers Union has launched a landmark case

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Speaker 1: to abolish junior rates for more than half a million

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Speaker 1: workers who are aged eighteen years and older.

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Speaker 2: The Shop Distributive and Allied Employees Association has filed a

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Speaker 2: Fair Work Commission case to ensure work is eighteen and

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Speaker 2: over in retail, fast food and pharmacy are paid the

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Speaker 2: full twenty one year old rate. The case, invoking award

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Speaker 2: objectives to maintain the living standards of the low paid

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Speaker 2: and work value reasons, is definitely going to be hotly

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Speaker 2: contested by employers who argue that increasing junior rates will

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Speaker 2: deter hiring. Under the retail, fast food and Pharmacy Rates Award,

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Speaker 2: an eighteen year old is paid seventy percent of the

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Speaker 2: adult age nineteen year old is paid eighty percent. The

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Speaker 2: SDA National Secretary Gerard Dwyer said, it just doesn't make sense.

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Speaker 2: The union will also argue that young people in Australia

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Speaker 2: face the same cost of living pressures as others in

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Speaker 2: the country, but are discriminated against when it comes to

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Speaker 2: their wages. For workers younger than eighteen, the SDA wants

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Speaker 2: to raise rates for those under sixteen years from forty

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Speaker 2: five percent of the full rate to fifty percent. Seventeen

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Speaker 2: year olds they say should be getting seventy five percent,

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Speaker 2: not sixty percent of the full rate. It is going

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Speaker 2: to be a mighty battle. It will take more than

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Speaker 2: a year to work through. But it's going to be

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Speaker 2: great fun to watch, certainly.

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Speaker 1: I remember working at BILO when I was kind of fifteen, sixteen, seventeen,

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Speaker 1: and it was great. Every year you just get a

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Speaker 1: pay rise on your birthday. I had no idea what

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Speaker 1: was going on. They just said, oh, look you're a

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Speaker 1: year older, you got a bit extra in your pay Like,

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Speaker 1: oh fantastic. No idea, I was just but I'm going

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Speaker 1: to say it, Sean. Don't you think that young people

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Speaker 1: these days are so much more aware of the way

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Speaker 1: that all of this works and of what their entitlements are.

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Speaker 2: Yes, totally agree. They're so much more savvy about this

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Speaker 2: stuff than I ever was.

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Speaker 1: It's going to be a very very interesting story to

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Speaker 1: watch see how this one plays out now, Sean. The

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Speaker 1: government has hundreds of investigations open into potential fraud cases

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Speaker 1: within the NDIS, in addition to twenty prosecutions underway and

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Speaker 1: twelve that are ready to go.

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Speaker 2: There are also five ten active compliance investigations on foot.

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Speaker 2: Minister for Government Services and the National Disability Insurance Scheme

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Speaker 2: Bill Shorten said to ABC Radio. He added that working

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Speaker 2: out where frauds are happening is a big and ongoing task.

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Speaker 2: His quote was, crooks don't self report. That's why we

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Speaker 2: don't know the full extent of it. Fair enough, if

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Speaker 2: follows the Senate Committee hearing earlier in the week, they

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Speaker 2: said ninety percent of NDIS plan managers that organized funding

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Speaker 2: for up to one hundred participants, it's actually about nine

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Speaker 2: hundred plan managers show signs of fraud. Nine percent of

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Speaker 2: the nine hundred show signs of fraud. Mister Shorton said

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Speaker 2: the frauds run into billions of dollars and that it's

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Speaker 2: unacceptable that people are rauting the system.

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Speaker 1: The administrators have collapsed. Low cost carrier bondser have conceded

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Speaker 1: the hopes of finding a buyer for the airline are

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Speaker 1: fading ahead of today's deadline to sell the business.

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Speaker 2: Instead, they're more likely to pursue a claim against Bonds's insurers.

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Speaker 2: Haul Chadwick's Richard L. Barron told the confidential meeting of

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Speaker 2: creditors yesterday that he now considered a sale unlikely. He

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Speaker 2: expects the jobs of airline's staff to be permanently terminated

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Speaker 2: early next week after being suspended in April. According to

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Speaker 2: The Financial Review early last month, all Chadwick said has

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Speaker 2: had expressed interest in buying Bonzer, terming a meaning of

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Speaker 2: credit as a budget carrier owes more than one hundred

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Speaker 2: million dollars.

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Speaker 1: IDP Education has warned of a large reduction in its

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Speaker 1: business due to increasingly restrictive policy in Australia and around

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Speaker 1: the world for international students.

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Speaker 2: Fascinating little story this time. This company places international students

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Speaker 2: into educational programs in Australia and New Zealand, US, UK, Ireland.

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Speaker 2: They've got a business in Canada as well. What's happening

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Speaker 2: in Australia. This backlash against surging student numbers post COVID

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Speaker 2: is happening in other countries as well. Yesterday, IDP said

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Speaker 2: it expected student placements to decrease by as much as

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Speaker 2: twenty percent next financial year in its key markets here

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Speaker 2: in Australia, in the UK and in Canada. Changed immigration

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Speaker 2: policies in recent months will have a negative impact on

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Speaker 2: the size of the international student market or generally it

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Speaker 2: certainly hurt Idp's business. Now its share price was down

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Speaker 2: about seven a half percent yesterday. This has been a

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Speaker 2: really volatile share price. Has been a great company to

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Speaker 2: watch with him felt around eleven dollars fifty during COVID,

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Speaker 2: then sawed to not far off forty dollars in late

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Speaker 2: twenty twenty one. It's about a third of that level now.

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Speaker 2: It's also one of the most shorted stocks on the

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Speaker 2: ax mening investors have bet that its share price will fall.

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Speaker 2: So just fascinating to watch in a share price sense,

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Speaker 2: but also the policy, the government policy, how that feeds

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Speaker 2: through to a business, a local business.

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Speaker 1: Okay, turning to international news now, in Canada has become

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Speaker 1: the first major economy to cut interest rates, and economists

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Speaker 1: forecasting other major economies will soon follow suit.

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Speaker 2: Yes Overnight, the European Central Bank was expected to cut rates,

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Speaker 2: with the reductions marking the official end to the record

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Speaker 2: fast hiking cycle that began with the outbreak of COVID

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Speaker 2: nineteen and continued with sawing inflation as governments pumped money

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Speaker 2: into economies to keep them afloat the back of Canada

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Speaker 2: last cut rates in March twenty twenty. Governor Tiff macklum

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Speaker 2: said officials were increasingly confident that inflation was returning to

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Speaker 2: its two percent target range, down from peak of more

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Speaker 2: than eight percent. He also left open the possibility of

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Speaker 2: another rate cut. The US FED is due to meet

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Speaker 2: next week, though no one really expects them to cut rates.

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Speaker 2: Markets have priced in two rate cuts in the US

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Speaker 2: later in the year. Of course, back Home Reserve Bank

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Speaker 2: isn't expected to do anything to at least the end

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Speaker 2: of the year, if at all.

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Speaker 1: Sean, I know you're a big social media user. You're

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Speaker 1: particularly big on TikTok.

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Speaker 2: A hound.

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Speaker 1: Describe yourself as a social media hound.

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Speaker 2: Yes, yes, yes, a hound?

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Speaker 1: Okay. Former US President Donald Trump has posted his first

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Speaker 1: video to TikTok on the weekend, and he's already amassed

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Speaker 1: more followers and likes than President Joe Biden's campaign account.

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Speaker 2: Yes, no politician has used social media better than Donald Trump,

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Speaker 2: and his first post, which showed him standing next to

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Speaker 2: the Ultimate Fighting Championship. Chief executive Officer Darnald White, has

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Speaker 2: garnered five point nine million likes and his account has

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Speaker 2: five point six million followers. This is just after four days.

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Speaker 2: Joe Biden's campaign account, which has posted hundreds of since

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Speaker 2: its debut in February, has three hundred and sixty three

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Speaker 2: hundred and sixty one thousand followers and four point seven

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Speaker 2: million lights. Oh dear. Trump actually tried to ban TikTok

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Speaker 2: while in office, but has since come out in support

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Speaker 2: of it. TikTok still faces a possible ban in the

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Speaker 2: US if its Chinese parent company, byt Edance, doesn't divest

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Speaker 2: its ownership stake in the platform by the beginning of

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Speaker 2: next year. But you've got a somewhat feel sorry for

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Speaker 2: Joe Biden's campaign that Donald Trump can come out and

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Speaker 2: in four days absolutely smash the Biden TikTok account.

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Speaker 1: It's got to hurt a little bit. Fear and greeds

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Speaker 1: on TikTok.

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Speaker 2: Certainly is in fact, we don't do enough dancing in

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Speaker 2: fear and greed TikTok.

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Speaker 1: I don't think we've done any dancing on fear and

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Speaker 1: greed TikTok. Would you do one for us? Maybe next week?

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Speaker 2: Sure? Sure, when the appropriate story comes up, I'll be there.

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Speaker 1: I can't believe you've committed to this. This is going

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Speaker 1: to be a defining moment in Fear and Greed could

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Speaker 1: also be the end of Fear and Greed as we know.

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Speaker 1: But head along, go to TikTok and follow Fear and

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Speaker 1: Greed podcast on there so that you do not miss

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Speaker 1: what I'm sure it's going to be an absolute highlight

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Speaker 1: of everybody's year. Up next is a Fear and Greed

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Speaker 1: daily interview. You're speaking today with Tim Burrows, media commentator,

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Speaker 1: owner of the Unmade newsletter.

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Speaker 2: All about the outlook for the media companies in Australia,

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Speaker 2: what happens with the big platforms like Meta and Google,

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Speaker 2: how they interact with the broadcast TV guys and the

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Speaker 2: radio guys. Great chat. No one knows media better than Tim.

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Speaker 1: Yeah. Indeed, it's up next in the Fear and Greed

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Speaker 1: playlist on your podcast platform or at Fearangreed dot com

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Speaker 1: dot au, which is also where you can sign up

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Speaker 1: for our free weekly newsletter. It comes out next Wednesday,

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Speaker 1: so you've got a bit of time to get on

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Speaker 1: there now and pop your email address in so you

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Speaker 1: don't have to think about it until it lands next Wednesday.

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Speaker 1: Thank you, Sean, Thank you Michael. It is Friday, the

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Speaker 1: seventh of June. Twenty twenty four. Make sure you're following

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Speaker 1: the podcast and please join us online on LinkedIn, Instagram, x, Facebook,

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Speaker 1: and TikTok. As I mentioned, I'm Michael Thompson. This's the

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