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Speaker 1: Big banks start cutting fixed rate loans as the auction

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Speaker 1: market slows. Local investors rushed to exchange traded funds and

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Speaker 1: Boeing to cut seventeen thousand jobs and slow the production

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Speaker 1: of planes. Welcome to Fear and Greed. Daily business news

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Speaker 1: for people who make their own decisions. It is Monday,

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Speaker 1: the fourteenth of October twenty twenty four. I'm Michael Thompson

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Speaker 1: and good morning, Sean Aylmer.

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Speaker 2: Good morning, Michael.

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Speaker 1: Sean the main story this morning. It's been one of

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Speaker 1: the busiest weeks of the year for the housing market

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Speaker 1: and sales have been okay at best. Really, just as

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Speaker 1: major lenders start cutting interest rates on homelines.

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Speaker 2: Yeah, a lot going on now. The weather's warmer in

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Speaker 2: the footy seasons and mostly over people are selling houses

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Speaker 2: again in large numbers. There were more than twenty five

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Speaker 2: hundred auctions across the country last week, the sixth highest

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Speaker 2: for the year. In the preliminary clurance rate came in

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Speaker 2: at sixty six point six percent. That was better than

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Speaker 2: the very low sixty three point nine percent the previous

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Speaker 2: week thanks to a solid jump in Sydney came in

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Speaker 2: about sixty nine percent At Sydney that's according to core Logic,

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Speaker 2: Melbourne held most auctions more than one thousand, and its

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Speaker 2: preliminary clearance rate was sixty four point eight percent, while

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Speaker 2: the weekly rate across the country was close to the

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Speaker 2: ten year average. Certainly, the trend, as demonstrated by the

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Speaker 2: four week moving average, is down, and we know house

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Speaker 2: price growth across the nation slowed appreciably during the September

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Speaker 2: quarter to just one percent. We also know that Perth,

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Speaker 2: Brisbane and Adelaide prices have risen more than the rest

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Speaker 2: of the country, such that Melbourne is now a relatively

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Speaker 2: cheap city to buy in pretty amazing given it's not

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Speaker 2: that far off being the biggest metropolis. In fact, I

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Speaker 2: think it is the biggest metropolis now once they changed

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Speaker 2: their boundaries. Sydney's median price is one point six million,

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Speaker 2: way above the nine hundred and seventy thousand in Melbourne,

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Speaker 2: but in between those two cities of Adelaide, Canberra, Brisbane

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Speaker 2: and Perth. The next few weeks are big auction weeks,

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Speaker 2: culminating in the end of the spring selling season late

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Speaker 2: in November. It's a real test for the market because

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Speaker 2: there are more homes on sale and the cost of

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Speaker 2: buying a home i e. The interest rates on loans

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Speaker 2: have Pete.

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Speaker 1: It really is a staggering difference, isn't it Between one

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Speaker 1: point six million for Sydney and nine hundred and seventy

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Speaker 1: thousand dollars. You would not expect such a huge gap.

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Speaker 2: Especially because Sydney Melbourne of the two big cities. Now

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Speaker 2: I think officially Melbourne is now bigger than Sydney. They

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Speaker 2: adjust to their boundaries. You just don't expect to see

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Speaker 2: prices in the biggest city in the country being below

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Speaker 2: everywhere else. Now. We've spoken to our friends at Domain

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Speaker 2: about this, and there's all sorts of reasons from the

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Speaker 2: taxation of investors to supply on the market, but it

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Speaker 2: still is a surprise.

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Speaker 1: I got to say, Yeah, just the size of the

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Speaker 1: gap just gets me every time, Sean, you mentioned interest rates,

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Speaker 1: and on that point, the big banks are cutting fixed

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Speaker 1: home liane rates with A and Z on Friday, following

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Speaker 1: the leads of NAB, Westpac and Commonwealth Bank. So they're

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Speaker 1: all doing.

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Speaker 2: It, sure are ain Z cut its fixed home loan

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Speaker 2: rates by up to zero point six percentage points for

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Speaker 2: owner occupiers and up to zero point seven percentage points

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Speaker 2: for investors at five point nine nine percent. Ain Z's

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Speaker 2: the lowest three year fixed rate remains higher than its

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Speaker 2: major bank competitors, with Commonwealth Bank, Westpac and National Australian

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Speaker 2: Bank all starting at five point eight nine percent. The

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Speaker 2: lowest three year fixed rate on rate Cities database is

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Speaker 2: four point nine nine percent from SWS Bank. Now, fixed

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Speaker 2: rate loans reflect the cost of money in bond markets,

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Speaker 2: and with bond yields falling, lenders the big banks can

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Speaker 2: afford to lower interest rates for home loan borrowers.

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Speaker 1: Now the three year.

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Speaker 2: Rate sits well below the standard variable interest rate, which

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Speaker 2: is actually around eight point nine percent. If you're going

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Speaker 2: to lender, they ask for a lower rate because you

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Speaker 2: get all sorts of discounts for all sorts of things.

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Speaker 2: But certainly a fixed three year rate is lower than

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Speaker 2: the standard variable rate, and that suggests that the banks

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Speaker 2: are very confident that over three years interest rates going

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Speaker 2: before quite a bit. The moral of this tale Michael,

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Speaker 2: shop around and get the best to deal.

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Speaker 1: Yeah, clearly there are some good offers out there at

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Speaker 1: the moment, especially if now all four of the big

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Speaker 1: four are there, and then Macquarie as well being a

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Speaker 1: bigger player now in the in the home landing market,

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Speaker 1: there is certainly there is reason to make a few

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Speaker 1: calls before you just sign up. Absolutely now, Jean, let's

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Speaker 1: take a look at local markets. Where do things finish up?

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Speaker 1: On Friday?

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Speaker 2: S and PASX two hundred closed down just a touch

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Speaker 2: to finish at eighty two hundred and fifteen points for

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Speaker 2: the week. The BOSS was up zero point seven percent

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Speaker 2: on Friday. The energy and utility sectors were among the best,

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Speaker 2: the materials among the worst. Wasn't it particularly busy to day?

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Speaker 2: The big banks were mixed. BHP and fourtyesqu Metals Group

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Speaker 2: were both down around one percent. Wistick Global was off

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Speaker 2: closer to two percent. Well, Zero finished about one percent high.

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Speaker 1: Jean, I know I'm biased, but we've had some really

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Speaker 1: good definitely biased when I say this, some really good

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Speaker 1: interviews of late and you mentioned Wise Tech and Zero

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Speaker 1: just then, and last week you spoke to Dushco Badgick

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Speaker 1: from First Centire Investors all about kind of why he

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Speaker 1: likes Wise Tech, why he likes Zero, why he likes Promedicus,

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Speaker 1: a few of those kind of tech stocks. Great interview,

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Speaker 1: but you've got a really good one coming up after

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Speaker 1: the show today and it is all about crypto. You're

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Speaker 1: speaking to Caroline Bowler, the CEO of BTC Markets.

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Speaker 2: Yes, so we haven't really checked in on crypto for

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Speaker 2: a while. Bitcoin's trading above sixty thousand US dollars a unit,

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Speaker 2: so it's doing pretty well at the moment. What's interesting,

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Speaker 2: according to Caroline from BTC Markets is the shift of

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Speaker 2: investors from retail investors mums and dads, to more sophisticated investors.

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Speaker 2: Now that might be institutions, but it might be home

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Speaker 2: offices that type of thing. Bitcoin and there's other majors

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Speaker 2: Solano and ethereum. They've got most of the support, but

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Speaker 2: it's just interesting that sophisticated investors are getting into it now.

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Speaker 2: We also talk about regulation of cryptos and the future

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Speaker 2: for the sector. It's a great chat with Caroline.

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Speaker 1: Yeah, it certainly is all right now. Checking international markets

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Speaker 1: thanks to blue chip communication, the experts helping financial services

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Speaker 1: companies market, communicate and grow, there's a blue chip coommunication

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Speaker 1: dot com, dot AU and all eyes have been on China.

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Speaker 1: Sean yep, sure have.

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Speaker 2: There were hopes that China would come out with another

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Speaker 2: big stimulus package over the weekend, but Beijing disappointed. The

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Speaker 2: government made some stimulus announcements, but nothing really that got

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Speaker 2: investors too excited. Beijing will issu you more debt to

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Speaker 2: boost the property market, recapitalized banks and help cash strapped

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Speaker 2: local governments. Officials said more steps for under discussion SOFA.

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Speaker 2: There's been quite a bit of monetary policy support, but

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Speaker 2: not much fiscal policy support, not much direct targeting of individuals,

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Speaker 2: money going directly to people. Stocks tumbled in China last

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Speaker 2: week after State planets had a press conference on the

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Speaker 2: economy but really failed to give any more of that

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Speaker 2: fiscal support. So it's a bit rocky, I would say

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Speaker 2: at the moment, and of course that matters for Australia

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Speaker 2: because we sell so much stuff to China. On Wall Street,

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Speaker 2: the S and P five hundred reset it's record high

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Speaker 2: for the forty fifth time this year over the weekend.

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Speaker 2: That came after some of the big banks JP, Morgan Wills,

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Speaker 2: Fargo as well as black Rock outlined September quarter earnings

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Speaker 2: which were a bit better than expected. Here's one for you, Michael,

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Speaker 2: because I know you spent time on the weekend on

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Speaker 2: this one. Elon mask he's showed off prototypes of Tesla's

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Speaker 2: next major products, cyber Cab and Optimist. Now I'm going

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Speaker 2: to ask you about it, but investors weren't in press

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Speaker 2: because the share price fell nine percent after the unveiling.

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Speaker 2: But what do you reckon of cyber Cab, which, of

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Speaker 2: course is a Tribalis cab, and Optimist, which is a robot.

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Speaker 1: Look, I do not spend a huge amount of time

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Speaker 1: on X. Occasionally, I'll just check in to see what's

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Speaker 1: going on. Of course, because Elon Musk owns X. There

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Speaker 1: was a great deal of discussion about the new robots,

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Speaker 1: the Optimus robot, and I don't know if you say,

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Speaker 1: go and check out some videos of the of when

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Speaker 1: this robot was unveiled and they walk out kind of

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Speaker 1: into the crowd. They walk out amongst everyone, and it

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Speaker 1: does look like it looks like a modern version of

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Speaker 1: C three po from Star Wars. I've got to say,

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Speaker 1: it looks quite sinister. And Elon Musk was even he

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Speaker 1: was even talking about the fact that he said, like,

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Speaker 1: the Optimist robots will walk among you, please be nice

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Speaker 1: to them. He said something about fact like we were

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Speaker 1: eighty percent sure that this is going to be good

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Speaker 1: for humanity, or something like.

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Speaker 2: That it's the other twenty percent I think we're most

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Speaker 2: worried about.

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Speaker 1: Indeed, and I'm paraphrasing there, but he was, he was

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Speaker 1: kind of there was you know how sometimes Elon Musk

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Speaker 1: gets a little bit carried away in his presentations and

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Speaker 1: almost as though he doesn't realize that every single thing

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Speaker 1: that he said is kind of being beamed out around

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Speaker 1: the world, and an admission like that is not great

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Speaker 1: for confidence. Anyway, go and check these things out. It is. Honestly,

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Speaker 1: it's a bit frightening. Yeah, yeah, yeah, yeah. We're fascinating

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Speaker 1: for the business though, because he did say that the

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Speaker 1: eventual price point for this is going to be about

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Speaker 1: twenty to thirty thousand dollars, which is very very low

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Speaker 1: considering what they're saying that it can do, that it

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Speaker 1: can replace a lot of menial labor like they do,

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Speaker 1: all kinds of jobs around the house in workplaces. At

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Speaker 1: twenty to thirty thousand dollars, the expectation from Elon Musk

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Speaker 1: is that this could be the most successful product ever.

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Speaker 2: He might think that investors didn't because I think I

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Speaker 2: think it's about sixty billion US dollars wipe off the

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Speaker 2: value of Tesla after the release.

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Speaker 1: I think everyone's clinging to that twenty percent risk of

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Speaker 1: it destroying humanity, maybe.

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Speaker 2: Just very quickly finishing global markets. Oils trading around seventy

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Speaker 2: nine US dollars a barrel, goals twenty six to fifty

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Speaker 2: seven US an ounce, and the Yossi dollars buying sixty

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Speaker 2: seven and a half US cents.

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Speaker 1: All right, we'll be back in a moment with the

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Speaker 1: rest of the day's business news. Sean ASX list at

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Speaker 1: exchange traded funds are on track for record growth this

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Speaker 1: year after a surge of investor inflows during the September quarter.

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Speaker 2: In the first nine months of this year, investors put

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Speaker 2: twenty three point three billion dollars into ETFs, of which

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Speaker 2: more than half came in the September quarter. The four

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Speaker 2: year inflow record was twenty twenty one, when inflows hit

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Speaker 2: twenty three point six billion, where more or less they're

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Speaker 2: already in just nine months. Investors are directing the bulk

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Speaker 2: of their capital into index tracking ETFs, which now account

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Speaker 2: for more than ninety percent of total Australian ETF industry assets.

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Speaker 2: The majority of money coming into these ETFs is for

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Speaker 2: international equity ETFs. There was also a jump in fixed

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Speaker 2: income ETFs, reflecting the higher interstrates that much more attractive

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Speaker 2: fixed income ETFs and rates are higher. The value of

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Speaker 2: the Australian ETF industries, now more than forty six billion dollars,

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Speaker 2: help not only buying flows but also strong share market gains.

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Speaker 2: According to Vanguard, these are all Vanguard figures. There are

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Speaker 2: now more than two point two million ETF investors in Australia.

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Speaker 2: That's about the same number as property investors. It's big time.

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Speaker 1: Yeah, certainly is our billionaire. WIS Tech founder Richard White

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Speaker 1: has offloaded around sixty million dollars in shares in the

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Speaker 1: logistics software provider.

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Speaker 2: The Tech Group CEO sold four hundred and sixty one

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Speaker 2: eight hundred and ninety one shares at around one hundred

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Speaker 2: and thirty two dollars apiece, which is close to their

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Speaker 2: all time high. Mister White has frequently sold down his

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Speaker 2: stake in the company, last month selling about forty six

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Speaker 2: million dollars worth of shares. Another quirky aside from the market.

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Speaker 2: On Friday, Seven Group Holdings is changing its registered company

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Speaker 2: name to SGH Limited. Chief executive Ryan Stake since seven

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Speaker 2: has evolved into one of Australia's leading industrial focus diversified

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Speaker 2: operating companies, and the rebrand better aligns the company with

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Speaker 2: its co operation, which, basically, Michael is another way of

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Speaker 2: saying everyone keeps thinking we're the TV station, but we

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Speaker 2: are much much bigger than that, and our name needs

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Speaker 2: to reflect that.

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Speaker 1: Sean Foreign Minister Penny Wong on Friday said less than

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Speaker 1: five hundred million dollars worth of trade impediments remain after

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Speaker 1: a deal was sealed with China to create a timetable

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Speaker 1: to allow the full resumption of Australian live rock lobster

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Speaker 1: exports by the end of this year.

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Speaker 2: Now, I don't want to have a bias towards anything,

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Speaker 2: but if you're going to export something, rock lobsters are

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Speaker 2: pretty cool, don't you reckon?

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Speaker 1: Yeah? Oh, absolutely anything with clause.

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Speaker 2: Yeah yeah, and just the name rock lobs. I mean

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Speaker 2: it might be the song, yes, if you've got to

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Speaker 2: a song, but no, I'm not going to. I'm not

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Speaker 2: going to, said the rock loster trade was worth seven

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Speaker 2: hundred million dollars in the industry was shut down in

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Speaker 2: twenty twenty. Now China halted rock lobster imports in twenty

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Speaker 2: twenty along with a bunch of other things. After Australia

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Speaker 2: called for a view of China's role in the origins

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Speaker 2: of COVID nineteen actually claimed they'd stopped the imports due

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Speaker 2: to biosecurity concerns held by the Chinese Trade minist Don

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Speaker 2: Farrell said the government had resolved all those biosecurity issues,

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Speaker 2: not surprising. Basically, twenty billion dollars worth of exports that

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Speaker 2: China was stopped. We're pretty much got a more back now.

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Speaker 1: This story, Sean, I don't know. I don't know what

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Speaker 1: to make of this one. Qantas has had to apologize

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Speaker 1: after a recent flight from Sydney to Tokyo featured an

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Speaker 1: R rated movie shown on every single screen on the plane.

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Speaker 2: I must say I kind of ignored it. We tried

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Speaker 2: try and ignore salacious stories here at Fear and Greed.

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Speaker 2: But then when I was reading about it in the

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Speaker 2: New York Times on the weekend, I thought, who am

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Speaker 2: I to filter this story? It's it's just a good yarn. Basically,

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Speaker 2: the flight crew played the movie following the malfunction of

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Speaker 2: Personal Inflight Entertainment or the Personal inflight Entertainment system last week.

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Speaker 2: I love the information actually comes to people who are

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Speaker 2: on the plane. They recounted the flight experience on Reddit.

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Speaker 2: One user said that the film features sexually explicit language,

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Speaker 2: images and words displayed on the screen. It played for

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Speaker 2: almost an hour before it was shut off. According to

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Speaker 2: online comments from people who said they were passengers on

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Speaker 2: the flight, the movie couldn't be turned off. He was

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Speaker 2: stuck on live. Quantas said in a statement that the

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Speaker 2: crew chose the movie based on the request from a

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Speaker 2: number of passengers.

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Speaker 1: So this is the problem with putting things to a

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Speaker 1: public vote. Yeah, go together people that have already had

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Speaker 1: a couple of wines, and they go, let's put this

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Speaker 1: one on. Everyone's gonna love it. The kids will go

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Speaker 1: nuts for it.

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Speaker 2: Apparently, the movie was something called Daddy a Daddo Daddyo,

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Speaker 2: starring Decata Johnson, she of Fifty Shades of Fame, and

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Speaker 2: Sean Penn. Qantas said it's reviewing how the movie was selected.

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Speaker 1: Can you just imagine if you had kids on that plan?

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Speaker 1: Kids avert your eyes. You just have the flight crew

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Speaker 1: going around and handing out kind of the eyemasks so

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Speaker 1: they can't turn the screens off. You've got to avert

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Speaker 1: your eyes some other way. I love that story, and

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Speaker 1: I love the fact that we had to wait until

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Speaker 1: The New York Times ran it before before.

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Speaker 2: We did have some credibility.

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Speaker 1: Yeah. No, we're clinging to credibility, Sean. It's a tenuous

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Speaker 1: grasp at Times International News Now and Boeing will cut

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Speaker 1: about seventeen thousand jobs and delay the first delivery of

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Speaker 1: its Triple seven X jet as it confronts deepening losses

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Speaker 1: and the effects of a week's long strike by its

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Speaker 1: largest labor union.

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Speaker 2: Chief executive at Kelly Ortberg announced the cuts, equivalent to

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Speaker 2: ten percent of the airline maker's workforce, in a message

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Speaker 2: to staff over the weekend. Financial troubles have escalated a

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Speaker 2: Boeing since the start of the year, when a door

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Speaker 2: panel flew off one of its seven three seven Max

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Speaker 2: jets and a passenger flight. Regulators demanded a slow down

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Speaker 2: and manufacturing fixed quality problems, which reduced the amount of

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Speaker 2: cash flowing into the company. Last month, thirty three thousand

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Speaker 2: workers walked out of Boeing plants in Washington State after

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Speaker 2: members of the machinists union overwhelmingly rejected a new contract.

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Speaker 2: This is all according to The Financial Times. The work

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Speaker 2: stoppage halted production of the company's seven sixty seven and

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Speaker 2: Triple seven planes, further cutting revenue, putting strain on its

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Speaker 2: supplies and customers. Then the debt rating agency SMP warned

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Speaker 2: of a possible downgrade of Boeing's bonds to junk status.

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Speaker 2: Nothing is going right and now they had to cut

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Speaker 2: seventeen thousand jobs.

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Speaker 1: Yeah, that is extraordinary, Shaw, And we are in the countdown, really,

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Speaker 1: aren't we? To the US presidential poll on November five.

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Speaker 1: Is only its mere weeks away. That's taking all the headlines,

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Speaker 1: of course, but already sixty seven countries where the total

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Speaker 1: population of about three point four billion people have held

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Speaker 1: elections this year.

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Speaker 2: Incredible, isn't it. The good news, according to the Economist magazine,

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Speaker 2: is that voter turnout has risen for the first time

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Speaker 2: in two decades, based on the average for all countries

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Speaker 2: that have held elections. Among places categorized as full democracies

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Speaker 2: that's by the Economist Intelligence Unit, turnout held steady. In

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Speaker 2: flawed democracies, it rose sharply by about three percentage points.

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Speaker 2: Turnout increased in many countries, including France, Indonesia, South Korea,

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Speaker 2: and Mexico. It was even higher in the European parliamentary election.

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Speaker 2: The report said that efforts to undermine elections, often via

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Speaker 2: social media, have generally failed, and elections have become more peaceful.

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Speaker 2: Increasingly voters are holding leaders accountable. However, some elections remain

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Speaker 2: what can only be described as a sham. Think Russia,

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Speaker 2: think Algeria. There are still some places where the outgoing

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Speaker 2: leaders will power. So Indonesia's Jocko Wudodo's son was elected

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Speaker 2: as vice president, so there's a lot of talk that

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Speaker 2: Yoko Wadodo will continue to have some sway in that country. Finally,

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Speaker 2: in Europe, the other notable thing, according to the economist,

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Speaker 2: is that there's been a real splintering of parties. Germany

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Speaker 2: is a good example where you have far right, far left,

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Speaker 2: and then the middle parties have become splintered. Makes for

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Speaker 2: somewhat difficult power sharing arrangements.

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Speaker 1: And finally, shown companies owned by private equity firms are

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Speaker 1: landing in default more frequently than other speculative grade borrowers.

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Speaker 1: According to a report from Moody's Ratings.

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Speaker 2: Private equity back companies defaulted at a rate of seventeen

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Speaker 2: percent between January twenty twenty two. In August this year

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Speaker 2: twice the rate of non private equity backed companies. Among

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Speaker 2: the twelve largest private equity sponsors as ranked by Moody's,

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Speaker 2: the default rate was slightly lower, at around fourteen percent.

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Speaker 2: Platinum Equity had the highest number and share of defaults,

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Speaker 2: followed by a Global Management. According to a report in Bloomberg,

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Speaker 2: private equity back companies tend to have more debt and

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Speaker 2: lower credit ratings than their peers, contributing to the high

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Speaker 2: default rate. Higher interst rates have also weighed on corporate

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Speaker 2: balance sheets, especially among borrowers with floating rate debt, which

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Speaker 2: many financial sponsors prefer for flexibility.

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Speaker 1: Default or default. It's one of those words, isn't it.

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Speaker 1: And I'm sure there's a correct way to do it,

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Speaker 1: and I'm sure I went the other way.

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Speaker 2: I think the Queen's English would be default. Wouldn't it

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Speaker 2: not default?

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Speaker 1: Yeah, you would imagine default. Default. You know what default?

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Speaker 1: I don't think there is an answer.

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Speaker 2: Someone will tell us, someone will, someone will.

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Speaker 1: We shall wait and see what happens. Shown up next

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Speaker 1: is Fear and Greed. The Week Ahead, featuring resident economist

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Speaker 1: Stephen could cool.

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Speaker 2: Us all about the unemployment numbers that which are out

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Speaker 2: on Thursday. Lot more interested in unemployment now because we

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Speaker 2: seem to be getting on top of inflation, even if

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Speaker 2: getting it into the target band is taking a little

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Speaker 2: bit longer than we'd hoped. What we don't want is

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Speaker 2: for the economy to collapse and for the jobs market

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Speaker 2: to plummet and as a result, unemployment to rise. So

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Speaker 2: that's kind of really an important part of the data

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Speaker 2: set at the moment. So Steven's very excited about that.

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Speaker 1: And after that is the Fear and Greed Daily Interview

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Speaker 1: with Caroline Bowler, CEO of BTC Markets.

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Speaker 2: All about cryptos and the interesting fact that sophisticated investors

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Speaker 2: now getting more and more interest in the bitcoins of

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Speaker 2: the world.

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Speaker 1: Indeed, they are both coming up in the Fear and

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

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Speaker 1: Today you thank you, Sean.

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Speaker 2: Thank you. Michael.

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Speaker 1: It is Monday, the fourteenth of October twenty twenty four.

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Speaker 1: Make sure you're following the podcast and please join us

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Speaker 1: on line, on LinkedIn, Instagram, x TikTok and Facebook. I'm

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Speaker 1: Michael Thompson and that was Fear and Greed. Have a

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Speaker 1: great day.