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Speaker 1: Today on Fear and Greed, Donald Trump promises big tariffs

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Speaker 1: on his closest neighbors, triggering a sell off in financial markets.

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Speaker 1: The Abenezi government passes legislation aimed to help homeowners and

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Speaker 1: general motors, wins a slot in Formula one racing and

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Speaker 1: will introduce the Cadillac brand to the sport. Plus budget blowouts,

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Speaker 1: coal deals and cheap evs. Welcome to Fear and Greed.

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Speaker 1: Daily business news for people who make their own decisions.

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Speaker 1: It is Wednesday, the twenty seventh of November twenty twenty four.

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

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Speaker 2: That is quite the introduction, Michael, Quite the introduction, plenty on.

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Speaker 1: We have a lot to cover in the next fifteen

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Speaker 1: or sixteen minutes. We're actually putting ourselves on quite a

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Speaker 1: tight time limit today, San, I'm not going to waste time.

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Speaker 1: The main story this morning, Donald Trump has We're going

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Speaker 1: to be saying that a lot, aren't we? The main

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Speaker 1: story this morning. Donald Trump is upended global trade rules

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Speaker 1: even before taking office, saying he will impose a twenty

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Speaker 1: five percent tariff on all products from Mexico and Canada

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Speaker 1: on his first day in office, and another ten percent

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Speaker 1: on goods from China.

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Speaker 2: Imagine if you were his friend, I would have thought like, well, actually,

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Speaker 2: imagine if you were his enemy. I think that's what

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Speaker 2: I'm saying.

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Speaker 1: If this is the way he's treating his friends right across,

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Speaker 1: right across the border, it makes things have been awkward

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Speaker 1: with Canada.

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Speaker 2: Right very aggressive comments aimed at the US's neighbors. In

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Speaker 2: Canada's it's closest to ally. He sided concerns over illegal

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Speaker 2: immigration that's in Mexico's case, and illicit drugs in the

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Speaker 2: case of Canada and China. He'll sign well. Donald Trump

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Speaker 2: says he will sign his first executive order on all

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Speaker 2: products capital A capitalil capital el all products coming into

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Speaker 2: the US. He put that on truth social media. Tariffs

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Speaker 2: will remain until the country's clamped down on drugs, especially

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Speaker 2: fentinal and migrants crossing the border illegally. Fentanyl is a

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Speaker 2: synthetic opioid that claims the lives about seventy five thousand

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Speaker 2: Americans every year. He also attacked China for not carrying

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Speaker 2: out the death penalty for people dealing infentanyl. While some

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Speaker 2: say Donald Trump's tweets are part of a negotiating position

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Speaker 2: he's establishing ahead of becoming president. They are certainly aggressive,

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Speaker 2: no doubt about that. He's goed investors the US dollar surge,

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Speaker 2: pushing the Aussie dollar back to the low sixty four

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Speaker 2: US cent range. That's its weakest level in four years.

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Speaker 2: It then bounced back towards sixty five US sense. Copper

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Speaker 2: and based metals, they tend to rise and fall in

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Speaker 2: line with expected future economic growth. They all fell. Bond

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Speaker 2: neils jumped. Now, slapping on tariffs like these will immediately

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Speaker 2: push up inflation. If you're buying something produced in Mexico,

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Speaker 2: such as a cheap fridge, that's going to be a

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Speaker 2: lot more expensive, pushes up inflation, pushes up bond neils.

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Speaker 2: The Canadian dollar had its lowest level since twenty twenty.

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Speaker 2: The Mexican peso tumbled, even coin went backwards. It's now

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Speaker 2: down six percent in three sessions. He's still training at

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Speaker 2: more than ninety four thousand US dollars a unit. Gold

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Speaker 2: prices bounced big reaction to these comments from Donald Trump.

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Speaker 1: Yeah, and then locally Sean yesterday, we saw a China's

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Speaker 1: ambassador in Canberra, Shao Chan, speaking, and this came after

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Speaker 1: those series of those tweets, and he said US trade

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Speaker 1: policy is an important element in Australia's relationship with the US.

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Speaker 1: So here we are, We're being drawn into this quite quickly,

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Speaker 1: aren't we.

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Speaker 2: Absolutely. It just shows the wide ranging ramifications of what

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Speaker 2: Donald Trump is proposing. The ambassador called on Prime Minister

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Speaker 2: Anthony Albanezi to remain a trading friend. Treasure Jim Chalmers

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Speaker 2: urged calm. He said the incoming US administration will bring

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Speaker 2: different policies. He's confident in Australia can navigate these changes. Elsewhere,

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Speaker 2: in a statement, the Chinese embassy in Washington said no

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Speaker 2: one would win a trade war. It said economic cooperation

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Speaker 2: is mutually benefit. The irony here, Michael, is it. Cracking

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Speaker 2: down on fentanyl manufacture and distribution is actually an area

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Speaker 2: where Beijing and Washington have been working together for the

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Speaker 2: last year or two, and there is no doubt there

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Speaker 2: is progress on combating both in China, both the manufacture

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Speaker 2: and distribution of it. So it is somewhat ironic that

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Speaker 2: this is what Donald Trump has picked on because it's

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Speaker 2: an area where they are making strides forward.

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Speaker 1: It's curious, and you do what you made the point

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Speaker 1: earlier that maybe this is just a negotiating tactic quite

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Speaker 1: early on, considering he is still weeks away from actually

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Speaker 1: taking office. That really it's about posturing at the moment

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Speaker 1: and just establishing a almost a precedent for how trade

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Speaker 1: negotiations and the like are going to be run.

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Speaker 2: Yeah, I mean imagine running trade negotiations like this. I

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Speaker 2: mean some people pointing out ten percent on Chinese goods

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Speaker 2: coming into the US. That's actually a lot better than

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Speaker 2: sixty percent, which is what he said previously. So it's

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Speaker 2: not too bad.

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Speaker 1: So look on the bright side here, it could be

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Speaker 1: a whole lot worse. Yeah, Now, show on the news,

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Speaker 1: I mean, this is this is this is one of

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Speaker 1: those big stories, right, isn't it that just kind of

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Speaker 1: hits everything all at once. And then you certainly hit

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Speaker 1: bank and energy stocks on the local market yesterday as well.

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Speaker 2: Yes, it did. All the talk of tariff's encouraged some

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Speaker 2: investors to jump in and take profits from stocks that

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Speaker 2: have run hard. The idea there is the companies have

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Speaker 2: done well, but the bad news is around the corner,

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Speaker 2: so let's get out before the bad news hits come off. Bank,

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Speaker 2: for example, it was down three and a half percent

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Speaker 2: yesterday all the banks were down A and Z, Westpac

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Speaker 2: and National Australia Bank dropped about one and a half percent.

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Speaker 2: By the close, y SMPA six two hundred was down

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Speaker 2: well zero point seven percent to eighty three hundred and

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Speaker 2: fifty nine points. The energy stocks were lower Woodside and

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Speaker 2: Santos for close to four percent, So that was as

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Speaker 2: much to do with reports with potential sixty day ceas

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Speaker 2: far in the Middle East. I'll come to that in

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Speaker 2: a moment. What was really interesting were the companies that

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Speaker 2: are involved. Australian companies listed here that are involved in

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Speaker 2: US manufacturing, particularly if you've got operations in that So

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Speaker 2: Blue Bluescope Steel, for example, jumped six percent. Building Products

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Speaker 2: Group James Hardy has major operations in the US, it

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Speaker 2: jumped more than two percent, Ansel Rose and Core Rose.

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Speaker 2: So those comments that tweet from Donald Trump, it just

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Speaker 2: hit all corners of the globe.

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Speaker 1: The power of a single tweet that is quite remarkable,

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Speaker 1: Sean after the show, worth quick mention now of your

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Speaker 1: interview that's coming up. Neil Rogan, Managing director and head

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Speaker 1: of Distribution at Russell Investment. Because we are talking kind

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Speaker 1: of about markets here, obviously and kind of things changing,

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Speaker 1: and it goes to the importance of getting good advice

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Speaker 1: during times of volatility, right.

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Speaker 2: We speak about that specifically. So Russell Investments have put

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Speaker 2: out a report, the Value of an Advisor Report. It's

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Speaker 2: their annual report basically tells you what an advisor gives

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Speaker 2: to you, and we talk about the need in times

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Speaker 2: of turmoil. That's where an advisor really comes to the

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Speaker 2: fore and really does a great job in helping you

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Speaker 2: get through funninancial stress and financial volatility. So we go

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Speaker 2: into that, into the findings of the report and actually

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Speaker 2: quantify the value of an advisor and it's really really interesting.

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Speaker 1: Yeah, it's a great chat. It's coming up after the show.

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Speaker 1: Don't go anywhere though. We are still to talk politics

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Speaker 1: and budget blowouts and big news from Google and evs

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Speaker 1: plenty more coming up. Will be back in a moment

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

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Speaker 1: is in full swing, but one bill that's unlikely to

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Speaker 1: be passed this week and possibly not even before the

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Speaker 1: next election, to be honest, is legislation to increase the

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Speaker 1: earnings tax on superannuation accounts worth more than three million

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Speaker 1: dollars this has been a pretty controversial one it has.

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Speaker 2: Finance Minister Katie Gallagher conceded it was a big ask

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Speaker 2: to get that one through. It doesn't have the support

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Speaker 2: of the opposition or the crossbencheres. She said it still

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Speaker 2: remains labor policy even though the Government hasn't been able

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Speaker 2: to negotiate it through Spencers. We do have two sitting

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Speaker 2: weeks scheduled for February next year, so they could still

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Speaker 2: try and bring it then before the next election. That is,

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Speaker 2: assuming we don't get an election called between now and then.

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Speaker 2: The social media legislation that will pass though Yesterday National

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Speaker 2: Maverick Matt Canavan, the NATS Bridget Mackenzie, Independent MP Kylie

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Speaker 2: at Tink they all indicated they had concerns about it

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Speaker 2: and particularly the speed it's been pushed through parliament. Laws

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Speaker 2: to back a sixteen billion dollar fund boosting public schools

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Speaker 2: and a three point six billion dollar wage increase for

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Speaker 2: child care workers they were set to pass, and the

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Speaker 2: big one the Green's back down in their fight against

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Speaker 2: the government's helped to buy and build to rent housing scheme.

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Speaker 2: We're talking about this twenty four hours ago, saying that

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Speaker 2: the government looked like they were really going to lose

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Speaker 2: out on this one. Well, it flipped in a moment,

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Speaker 2: with the Greens leader Adam Bandt seemingly changing his mind

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Speaker 2: on the spot. A weird One big win for the

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Speaker 2: government helped to buy is the idea that the government

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Speaker 2: will co own first sort of houses with first homeowners.

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Speaker 2: The bill to around taxing centers for investors coming and

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Speaker 2: build more homes, both pieces of legislation which were election promises,

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Speaker 2: passed the Senate yesterday.

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Speaker 1: Yeah, a couple of big wins for the government. There

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Speaker 1: perhaps not such a big win coming though. Sean Deloitt

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Speaker 1: Access Economics forecasting a blowout in the budget deficit this

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Speaker 1: financial year on the back of a softer economic outlook.

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Speaker 2: Don't you love a blowout?

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Speaker 1: Love any kind of a blowout? That's exciting hardly now.

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Speaker 2: Deloit Access is among the most reputable budget forecasters in

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Speaker 2: the country. I would say it reckons. There's about an

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Speaker 2: underlying cash balance of thirty three point five billion dollars

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Speaker 2: this financial year the twenty twenty five financial year. That's

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Speaker 2: more than five billion dollars worse than expected at the

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Speaker 2: last budget. Net debt will come in around twenty percent

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Speaker 2: of GDP in line with expectations. Now, remember the last

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Speaker 2: two budgets were in surplus, but the government got a

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Speaker 2: free kick. We had inflation and so that pushed up prices,

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Speaker 2: so they got more money that way, and commodity prices

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Speaker 2: were doing really well. So one hundred and ten hundred

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Speaker 2: and twenty bucks a ton, we're getting plenty of money

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Speaker 2: from higher commodity prices. We don't have those tailwinds anymore.

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Speaker 2: The good news is a labor market remains strong, but

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Speaker 2: the government will really have to work harder to keep

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Speaker 2: budgets in balance or at least minimize deficits. The point

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Speaker 2: is the budget has had an unexpected revenue gain in

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Speaker 2: the back of the economy the last couple of years.

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Speaker 2: Whoever has to do it next year, in the year after,

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Speaker 2: and the year after, it's going to be much much tougher.

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Speaker 1: Sean tech giant Google has backed Australia Connect, which is

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Speaker 1: a connectivity project that will build two new subsea cables

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Speaker 1: between mainland capital cities and Christmas Island.

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Speaker 2: You know how you love space and aircraft. I find

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Speaker 2: fiber optic cables on the seabed fascinating.

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Speaker 1: That's quite a niche topic to be it is really,

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Speaker 1: isn't it. But it doesn't surprise me finding that out

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Speaker 1: about you.

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Speaker 2: I used to live with a guy who worked for

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Speaker 2: a crowd called Alcatel who used to operate in Sydney,

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Speaker 2: and his job, he was an engineer, and his job

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Speaker 2: at times was to sit on the back of a

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Speaker 2: ship and they just rolled out the fiber optic cable

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Speaker 2: and he'd just make sure that it rolled out sank

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Speaker 2: to the bottom and then they'd have to splice between

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Speaker 2: cables when they were swapping cables over and that was

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Speaker 2: his job. What a cracking job.

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Speaker 1: And so it's not actually secured as you go, like,

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Speaker 1: it's just kind of just sitting there loose on the bottom.

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Speaker 2: Yeah, we had this great debate about this was twenty

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Speaker 2: years ago or longer, where there's great debate about the

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Speaker 2: environmental damage being done. And I won't say. His nickname

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Speaker 2: was Bear the Great Bear, and he said there's no

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Speaker 2: environmental damage, and I say, there's lots of environmental damage

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Speaker 2: and many beers we had talking fiber optic cables playing

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Speaker 2: on the bottom of the ocean. So it's always been

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Speaker 2: one of my favorite topics.

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Speaker 1: Oh my god, So your interests a niche even your

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Speaker 1: drinking arguments.

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Speaker 3: A niche yeah, A boring, Yeah, I was trying to

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Speaker 3: be Yeah, but I do find it kind of interesting,

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Speaker 3: Like anything to do with it feels like such an

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Speaker 3: engineering feat to do anything like that.

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Speaker 2: I'm amazed light and I mean most of the world's

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Speaker 2: Internet traffic runs through these cables the speed of light.

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Speaker 2: They're far abrupting speed of light, and I think it's

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Speaker 2: quite phenomenal.

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Speaker 1: Anyway, what's Google doing in this space?

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Speaker 2: Straight to connect? Well, the first cable run between Darwen

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Speaker 2: and Christmas Island. There'll be a second cable between Melbourne

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Speaker 2: and Perth. They'n onto Christmas Island and Singapore. According to

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Speaker 2: the Sydney Morning Herald, subse cable technology is deployed across

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Speaker 2: thousands of kilometers of ocean floor. Of the ocean floor,

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Speaker 2: Google's formed the consortium to build the next project includes

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Speaker 2: data center provider next DC, Telco Group, Focus Cable Provide,

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Speaker 2: a Subco, the Sunshine Coast City Council and a bunch

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Speaker 2: of state governments. Communications Minister Michelle Rowland said the cables

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Speaker 2: will expand and strengthen not just digital connectivity insude Australia,

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Speaker 2: but in the Pacific as well. Seabed infrastructure is really

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Speaker 2: critical to national security. Do you remember a story last

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Speaker 2: week and it was the twelve hundred kilometer under sea

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Speaker 2: fiber optic cable linking Finland and Germany and they thought

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Speaker 2: they were talking about Russians severing it, which starts out

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Speaker 2: your communications tatally. This is kind of the same subt

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Speaker 2: of deal. I love this story.

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Speaker 1: That's a really cool story. It is the US minor

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Speaker 1: Peabody Energy and Indonesia's now is this Buma?

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Speaker 2: Is it? I thought we're gonna have to go Buma.

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Speaker 2: I don't think the Indonesians would say Boomer.

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Speaker 1: I think it feels like it's It's right for kind

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Speaker 1: of misinterpretation here anyway. Together they will pay close to

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Speaker 1: five billion dollars for the Queensland coal mines of Anglo American.

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Speaker 2: Peabody will control four Queensland coking mines, while Buma will

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Speaker 2: get one. Cocing coal is used for steel making, as

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Speaker 2: opposed to thermal coal, which is used for power generation.

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Speaker 2: Peabody doesn't have a great track record in Australia. About

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Speaker 2: thirteen years ago it bought Queensland minor MacArthur Cole for

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Speaker 2: nearly five billion dollars. Ultimately, it then went into Chapter

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Speaker 2: eleven bankruptcy. Anglo, which in May knock back a seventy

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Speaker 2: five billion dollar bid from BHP, has spent the past

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Speaker 2: six months offloading coal assets, particularly including stakes in Lake

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Speaker 2: Vermont and Gelember coal mines in Queensland. I think that

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Speaker 2: means it's pretty much out of coal in Australia now. Coincidentally,

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Speaker 2: the six month time limit imposed under the UK law

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Speaker 2: which has prevented BHP from coming back and making another

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Speaker 2: bid for Anglo, expires on Friday.

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Speaker 1: There you go, okay. New gaming laws landed in Victorian

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Speaker 1: Parliament yesterday with major changes aimed at nullifying problem gambling Sean.

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Speaker 2: Things like the maximum amount in a machine at one

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Speaker 2: time goes from one thousand dollars to one hundred dollars.

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Speaker 2: Machines will be forced to slow between each game. Card

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Speaker 2: and play will also be introduced. Basically, you have to

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Speaker 2: use a card. The hope there is it can limit

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Speaker 2: how much money a gambler can use. Almost thirty percent

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Speaker 2: of Victorians who play gaming machines experience gambling harm, and

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Speaker 2: the government is trying to do something about it.

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Speaker 1: Car Dealers. We mentioned this at the top of the show.

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Speaker 1: Car dealers are being forced to sell luxury electric vehicles

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Speaker 1: at a loss as demand at the top end succumbs

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Speaker 1: to changing consumer tastes and competition from Chinese evs.

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Speaker 2: Dealerships reporting too many seventy thousand dollars plus evs, including

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Speaker 2: from manufacturers like jqu and Mercedes beans BMW, according to

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Speaker 2: the fin Review. A report by investment bank Molus says

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Speaker 2: the local market is mismatched at the moment. Too many

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Speaker 2: prestige vehicles on the lots, just when the cost of

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Speaker 2: living crunch is binding doesn't work, could get worse next year. Apparently,

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Speaker 2: under the government's new Vehicle Efficiency Standard legislation, car manufacturers

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Speaker 2: are incentivized to increase their volumes of lower emissions vehicles.

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Speaker 2: That might be a hybrid, might be an EV, so

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Speaker 2: there're certainly incentivized to get those onto the lots here

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Speaker 2: in Australia. Now, that happened in the UK, and what

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Speaker 2: ended up happening is prices fell, so not just evs,

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Speaker 2: but also the secondary market used evs, their value fell.

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Speaker 2: That could well happen in Australia. Another big factor here

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Speaker 2: is the success of BYD. Its growth is much stronger

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Speaker 2: than Tesla and also charging infrastructure in Australia, it still

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Speaker 2: remains too problematic for many buyers.

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Speaker 1: Okay. Turning to international news now and US President Joe

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Speaker 1: Biden and French President Emmanuel Macron are expected to announce

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Speaker 1: a ceasefire in Lebanon between armed group Hezbollah and Israel imminently,

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Speaker 1: according to a report on Router's.

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Speaker 2: Very imminently, Michael, we do this very early in the morning,

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Speaker 2: so it could happen anytime. In Washington, White House National

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Speaker 2: Security spokesperson John Kirby said we're close, but nothing is

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Speaker 2: done until everything is done. The French presidency said discussions

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Speaker 2: on a ceasefire had made significant progress. In Jerusalem, a

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Speaker 2: senior Israeli official said Israel's cabinet would meet overnight to

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Speaker 2: approve a true deal with Hesbler signs of a diplomatic breakthrough,

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Speaker 2: though we're accompanied by heavy Israeli airstrucks on Beirut's Hesblow

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Speaker 2: controlled southern suburbs, as Israel pressed on with the offensive

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Speaker 2: it launched in September after almost a year of cross

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Speaker 2: border hostilities.

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Speaker 1: Finally, Sean, how about this one? General Motors has taken

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Speaker 1: a major step towards competing in Formula one car racing

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Speaker 1: under its Cadillac brand as the sport expands quickly in

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Speaker 1: the US. You are a fan of F.

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Speaker 2: One, No, people in this house are a fan of this.

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Speaker 2: Of F one and the Drive to Survive Netflix show

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Speaker 2: effectively opened up the US market because NASCAR had a

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Speaker 2: hole in the US market, of course, the biggest market

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Speaker 2: in the world. F one have gone from one race

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Speaker 2: a year to three. They're about to go to four

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Speaker 2: races in the US a year. Big, big business there.

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Speaker 1: It seems like the growth of that sport has rivaled

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Speaker 1: only by the growth in pickleball. Yes, isn't that an

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Speaker 1: extraordinary success story. I know we're getting off topic here,

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Speaker 1: but seriously, anyway back to General Notice.

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Speaker 2: So everyone said it has reached an agreement in principle

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Speaker 2: with the US car maker General Matters, under which Cadillac

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Speaker 2: will become the eleventh team on the series grid from

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Speaker 2: twenty twenty six, a significant breakthrough in the talks between

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Speaker 2: the two sides, although GM's application to join the F

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Speaker 2: one World Championship is formally still ongoing. Liberty Media owns

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Speaker 2: its owned F one since twenty seventeen, and the sport

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Speaker 2: has expanded into the US, new races in Miami and

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Speaker 2: Las Vegas. GMS plan to join F one highlights its

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Speaker 2: attractiveness not only as teams have sought in value due

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Speaker 2: to the growth the sport, but also because of limits

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Speaker 2: placed on how much they can spend on developing cars.

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Speaker 2: It sort of protects shareholders from runaway costs. So if

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Speaker 2: you're a GM person, you know there's a limit to

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Speaker 2: how much they can spend on the F one. According

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Speaker 2: to the FT, General Motors President Mark Russ said it

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Speaker 2: was an honor to join F one and describe the

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Speaker 2: sport as a global stage to showcase engineering expertise in

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Speaker 2: technology leadership at an entirely new level.

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Speaker 1: Up next is the Fear and Greed Daily Interview with

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Speaker 1: Neil Rogan, Managing director and head of Distribution at Russell

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Speaker 1: Investments and coming out in just a few hours. Sean,

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Speaker 1: you better get cracking the Fear and Greed newsletter, the

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Speaker 1: free weekly newsletter. Head along to Fearangreed dot com dot

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Speaker 1: a you and sign up for that one. Any idea

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Speaker 1: on what you're going to be unloading on in this

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00:19:38,640 --> 00:19:41,639
Speaker 1: bist about your opinion, your insight, your take on a

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Speaker 1: whole bunch of stories.

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Speaker 2: Yeah, I mean one thing, Donald Trump. I don't want

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Speaker 2: to ride about him. But oh my god, there's some

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Speaker 2: revisionism going on at the moment. People saying, look, he

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Speaker 2: won't be as bad. People making up reasons to like

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Speaker 2: Donald Trump, driving me crazy.

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Speaker 1: Oh okay, we're going to get your pure, unadulterated, unfiltered

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Speaker 1: inner thoughts.

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Speaker 2: Today, which would be very confusing. If I actually did do.

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Speaker 1: That, I would subscribe for that Fear and Greed dot

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00:20:15,400 --> 00:20:17,240
Speaker 1: com dot au. Sign up for the newsletter. It comes

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Speaker 1: out in a few hours. Thank you very much, Sewan.

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Speaker 2: Thanks Michael.

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Speaker 1: It is Wednesday, the twenty seventh of November twenty twenty four.

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

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00:20:24,800 --> 00:20:29,359
Speaker 1: online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael

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Speaker 1: Thompson And that was Fear and Greed. Have a great day.