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Speaker 1: Today on Fear and Greed. Interest rates in Australia could

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Speaker 1: fall as soon as next month after inflation slows sharply,

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Speaker 1: whine exports to China jump, that sales to many other

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Speaker 1: markets fall, and we'll tell you the best time to

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Speaker 1: buy a cheap domestic and international flight. Plus, the local

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Speaker 1: share market closes in on a record high and Boeing

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Speaker 1: crashes to its second largest loss ever. Welcome to Fear

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Speaker 1: and Greed, Daily business news for people who make their

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Speaker 1: own decisions. It is Thursday, the thirtieth of January twenty

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

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Speaker 2: Good morning Michael, Sean.

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Speaker 1: The main story is one that we've been talking about

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Speaker 1: for some time. It's finally here. Inflation has fallen to

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Speaker 1: its lowest level in nearly four years. The consensus among

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Speaker 1: market economists at the Reserve Bank will start cutting interest

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Speaker 1: rates next month.

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Speaker 2: That's right. The details first, The Australian Bureau Statistics Consumer

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Speaker 2: Price Index was released yesterday morning. The headline figure for

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Speaker 2: the December quarter zero point two percent. For the annual

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Speaker 2: rate of inflation for twenty twenty four to two point

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Speaker 2: four percent. Now that's artificially low because of energy rebates

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Speaker 2: from the government. Housing costs are also lower. That reading

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Speaker 2: is the lowest since March twenty twenty one. The more

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Speaker 2: important reading, Michael, is the underlying rate. That's what the

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Speaker 2: Reserve Bank cares about when it's thinking about interest rates.

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Speaker 2: Zero point five percent for the quarter, three point two

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Speaker 2: percent for the year. That's down from three point five percent.

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Speaker 2: That figure may well be enough to start interst rate cuts.

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Speaker 2: The Reserve Bank Governor Michelle Bullock has said she will

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Speaker 2: start cutting rates when she believes underlying inflation is heading

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Speaker 2: sustainably into the two to three percent target band. Well,

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Speaker 2: three point two percent down from three point five percent

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Speaker 2: looks like it is heading in that direction. Yesterday, Federal

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Speaker 2: Treasurer Jim Chalmers today soft landing for the economy is

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Speaker 2: more and more likely. He said, we are making substantial

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Speaker 2: and sustained progress on inflation. A load of market economists

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Speaker 2: now believe a rate cut is likely next month, including

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Speaker 2: Westpax chief economist Lucy Ellis, who changed her view on

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Speaker 2: the back of yesterday's data. Ellis, of course, used to

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Speaker 2: be the Reserve banks chief economist, the Comwealth Bank and

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Speaker 2: A and Z already were at the position that they

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Speaker 2: thought there would be a rate cut next month. The

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Speaker 2: Aussie dollar felt sharply towards sixty two US sins after

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Speaker 2: the announcement. Basically, the Aussie dollar becomes relatively less attractive

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Speaker 2: to global investors when rates fall. The three year bond

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Speaker 2: yield hit a two month low three point seven nine percent.

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Speaker 2: What's that mean? Well, it tells us what you're laughing

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Speaker 2: at me? What investors think will happen to raids? I

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Speaker 2: reckon they're going down.

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Speaker 1: Sean digesting all of that right, People with mortgages must

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Speaker 1: be happy, people with business loans must be happy. And

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Speaker 1: I don't want to be a sinic here, but I

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Speaker 1: reckon the happiest person in the country today would have

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Speaker 1: to be Prime Minister Anthony Eberneze.

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Speaker 2: So true, a rate cut next month, the head of

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Speaker 2: a federal poll in coming months will do him no

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Speaker 2: harm whatsoever. Now it's worth noting that a rate cut

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Speaker 2: is not a done deal. But the readings yesterday are

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Speaker 2: lower than the Central banks forecasts. The Central Bank meets

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Speaker 2: on February seventeen eighteen, it can quite easily justify no change.

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Speaker 2: It could say we want to ensure inflation is under control.

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Speaker 2: Yet it all looks pretty good. But you know, we

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Speaker 2: just wait a little bit longer. It could talk about

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Speaker 2: economies like the US signs of inflation there, global trade wars,

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Speaker 2: all that sort of stuff.

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Speaker 1: They have kind of built that kind of room to

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Speaker 1: do that. To wait a bit later into all of

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Speaker 1: the previous commentary is because Michelle Bullock has said so

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Speaker 1: many times that it is all about getting inflation down sustainably.

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Speaker 1: And Sean, you're full of lots of things. You're full

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Speaker 1: of kind of sayings and things like that kind of

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Speaker 1: the trend as your friend and swallow something something something

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Speaker 1: doesn't make a spring. I don't know. You could see

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Speaker 1: the Reserve Bank saying have we we want to see

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Speaker 1: this playing out for a longer period.

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Speaker 2: Right, Yeah, you could. There's also enormous amount of political

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Speaker 2: pressure going on though, and not I mean maybe sort

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Speaker 2: of covertly from government, but overtly from other groups. So

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Speaker 2: Sally McManus from the ACTU yesterday was out saying you've

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Speaker 2: got to cut rates. There are plenty of other business

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Speaker 2: leaders saying yep, it's time to cut rates. So Michelle

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Speaker 2: Bullock and the board at the Reserve Bank have to

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Speaker 2: put up with that. The next question will be hand,

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Speaker 2: we rate cuts are we going to get? And we don't.

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Speaker 2: You don't tend to get one rate cut or one

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Speaker 2: rate hike. They come in clumps. So economns are saying

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Speaker 2: maybe two or three rate cuts this year. I'm not

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Speaker 2: totally convinced that it's going to happen. Michael got to

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Speaker 2: be asked.

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Speaker 1: No, the political pressure or the pressure from other areas.

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Speaker 1: It's such an interesting idea, isn't it, Because you would

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Speaker 1: think that, of course, when you've got them the chief

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Speaker 1: chief economists of various banks everything, all saying yep, yep,

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Speaker 1: it'll happen. Surely, that's got to kind of weigh on

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Speaker 1: you if you were the Reserve Bank Board, right.

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Speaker 2: Well, maybe I think it's a pressure from government, from

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Speaker 2: AC to you. It's those sorts of organizations that probably

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Speaker 2: put more pressure on you. Actually, today's interview it's with

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Speaker 2: Warren Hogan from Judo Bank. It is a great chant

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Speaker 2: not just about yesterday's data but exactly what we're talking about.

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Speaker 2: And he has a great track record on interest rates.

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Speaker 1: Yeah yeah, and he basically takes this approach kind of

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Speaker 1: we don't need a rate cut and Here's why. The

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Speaker 1: thing I love about Warren is that he just tells

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Speaker 1: it exactly as he kind of sees it. He is

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Speaker 1: so plain spoken with all of this. He doesn't pull

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Speaker 1: any punches. He just just let's let's you know exactly

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Speaker 1: where we stand. So it is a great conversation if

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Speaker 1: you want to understand kind of what he sees as

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Speaker 1: the picture at the moment, Sean Asx, how did local

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Speaker 1: markets react to the news. What was the response?

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Speaker 2: Very quickly, they loved it. The market finished up zero

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Speaker 2: point six percent to four hundred and forty seven points.

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Speaker 2: That's less than one percent off its all time high

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Speaker 2: of late last year. Straight after the announcement had actually

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Speaker 2: jumped up even higher than that. Basically, lower rates should

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Speaker 2: help consumers and the cost of living crisis. As a result,

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Speaker 2: they should buy more stuff that helps corporate profits. Makes sense. Also,

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Speaker 2: the cost of corporate debt will fall if rates are lower,

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Speaker 2: So those two things together you get higher earnings that

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Speaker 2: pushes up share prices. There was another important factor, however,

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Speaker 2: influencing training. Yesterday, Michael, it was the day after the

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Speaker 2: day before. I'm not sure how that works, but you know,

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Speaker 2: it's the day after the mass of sell off on

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Speaker 2: Wall Street and in tech stocks because of the news

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Speaker 2: about deep Seek. Now deep Sea is essentially a company

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Speaker 2: that's going to take on Chat GPT. That's the theory

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Speaker 2: behind it. What it did more than anything was just

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Speaker 2: show that there are other competitors out there to the

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Speaker 2: big US tech groups. Some of the companies that were

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Speaker 2: sold off big time on Tuesday, I think the Data

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Speaker 2: Center Group's Goodman and next DC, the tech leader's Wise

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Speaker 2: Tech Global and Zera. They pretty much bounced yesterday. Same

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Speaker 2: to deal with a bunch of uranium stocks like Boss

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Speaker 2: Energy and Deep Yellow. And just before we leave the markets,

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Speaker 2: Michael Primary Investment yesterday became a much smaller company because

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Speaker 2: of course it's combining it's apparel business. I think just

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Speaker 2: Jean's Portman's JJ's with Meyer. So his share price fell

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Speaker 2: twenty two percent yesterday, not surprising because it's lost all

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Speaker 2: those assets. Mayer was down five percent.

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Speaker 1: All right, big start to the show, Sean, who still

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Speaker 1: have plenty more to come. We are talking Ossie wine exports.

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Speaker 1: We are looking at the best time to book a

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Speaker 1: flight with Boeing's bad run very aircraft and airline heavy aircraft. Yeah,

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Speaker 1: it feels like you've kind of prepared today's show just

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Speaker 1: for me, So so much more to come. Don't go anywhere.

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Speaker 1: We'll be back in a moment with the rest of

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Speaker 1: the day's business news sewn. Australian soldier Oscar Jenkins, who

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Speaker 1: was captured in eastern Ukraine, has been confirmed alive and

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Speaker 1: in custody, not dead as was previously feared.

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Speaker 2: Certainly good years. The thirty two year old Melbourne teacher

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Speaker 2: was serving in Ukraine's armed Forces. He was captured by

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Speaker 2: Russian forces last year. There were reports that he had

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Speaker 2: been executed in Russia. Yesterday, Foreign Minister Penny Wong said

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Speaker 2: he was alive, but she also threatened an unequivocal response

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Speaker 2: against Russia should mister Jenkins face harm, citing serious concern

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Speaker 2: for his well being. Not a lot of information on

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Speaker 2: this at the moment, but at least mister Jenkins is alive.

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Speaker 2: He's a prisoner of war now. Pennywong yesterday called on

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Speaker 2: the government to release mister Jenkins. She said, if Russia

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Speaker 2: doesn't provide mister Jenkins the protections he's entitled to under

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Speaker 2: international humanitarian law, our response will be unequivocal.

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Speaker 1: All right now, Sean I mentioned Australian wine exports well,

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Speaker 1: they jumped by more than one third last year to

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Speaker 1: two point five to five billion dollars thanks to the

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Speaker 1: abolition of Chinese tariffs on the local drop.

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Speaker 2: There was an immediate improvement from late March last year

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Speaker 2: when those tariffs were dropped. In fact, for the full year,

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Speaker 2: winshaus to China up thirty four percent. That took the

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Speaker 2: total value of exports to two point five to five

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Speaker 2: billion dollars last year, according to Wine Australia. Now China

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Speaker 2: takes about thirty six percent of all exports. That's good news.

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Speaker 2: Bad news. Exports to the rest of the world slipped

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Speaker 2: by about thirteen percent. There were big drops in some

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Speaker 2: major markets, so the United Kingdom was down three percent,

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Speaker 2: the US was down ten percent, Hong Kong was down

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Speaker 2: forty percent. That would have been a bit of shifting

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Speaker 2: from Hong Kong to China in that but those three, UK,

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Speaker 2: US and Hong Kong are all major markets for US. Broadly,

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Speaker 2: wine exports are facing challenges. Health and wellness concerns, rise

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Speaker 2: and costs of living have combined to hit demand for

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Speaker 2: our exports. Also, there's a global oversupply at the moment

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Speaker 2: that's not helping prices. So tough times, but at least

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Speaker 2: sales China are up.

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Speaker 1: Yeah, that is at least some good news now. Sean

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Speaker 1: shareholder meetings to approve the Sigma Healthcare and Chemist Warehouse

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Speaker 1: merger were held last night and it got the green

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Speaker 1: light to create a thirty billion dollar company.

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Speaker 2: That's right. Sigma is listed on the Australian Stock Exchange.

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Speaker 2: Shareholders love the deal. Basically, it's triggered a total rerating

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Speaker 2: of Sigma Healthcare. Before this deal was announced, Sigma was

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Speaker 2: training at seventy six point five since share on Tuesday closed.

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Speaker 2: It didn't trade yesterday, but Tuesday was its last day

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Speaker 2: as a stand line entity three dollars and three certainly

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Speaker 2: a strong performer in the second half of last year.

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Speaker 2: Chemists Warehouse is a family owned business or mostly family owned.

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Speaker 2: Any deal will make the founders Jack and Sam Grants,

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Speaker 2: as well as Mario Verocki billionaires Combined. Those three own

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Speaker 2: about forty eight percent of the company that's worth about

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Speaker 2: fifteen billion dollars, so that surprising they voted for the

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Speaker 2: deal as well. Shares are set to begin trading on

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Speaker 2: thirte and through February because the new company is so big,

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Speaker 2: plenty of index funds index investors will be forced to

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Speaker 2: buy into the company and that should support its price.

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Speaker 1: Bit of rare good news now sean for Star Entertainment.

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Speaker 1: Yesterday it said that it is selling several Sydney assets

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Speaker 1: and that sent its share price up to thirteen percent.

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Speaker 2: Wow. I like that start selling several Sydney assets A

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Speaker 2: lot of a lot of sibilants, yes, exactly, and acid

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Speaker 2: being sold is the Star Sydney event Center plus some

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Speaker 2: other spaces. Star will reap about sixty billion, sixty billion.

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Speaker 2: I'd love that Star will reap about sixty million dollars

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Speaker 2: for the assets that sold it to the Foundation. Theaters.

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Speaker 2: Foundation already has assemblies on Lyric Theater at the Start

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Speaker 2: in Sydney. Of course, this is part of the Star's

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Speaker 2: efforts to avoid collapse. I got to say what I

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Speaker 2: read when I saw this story yesterday. I remember when

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Speaker 2: Star So Star in Sydney opened in nineteen ninety five

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Speaker 2: at a temporary site, and they built the permanent casino

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Speaker 2: that opened in nineteen ninety seven, So I must be

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Speaker 2: about ninety six early ninety seven. I was a journalist

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Speaker 2: at the finn Review and I went on a tour

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Speaker 2: of the Star before it opened, and I went into

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Speaker 2: that Sydney event center and I think it's got two

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Speaker 2: or three hundred people capacity, and they were talking about

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Speaker 2: Elton John and David Bowie and all sorts of people

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Speaker 2: coming and having kind of small intimate shows for rich gamblers. Oh.

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Speaker 2: I remember the time thinking to myself, really like, maybe

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Speaker 2: that happened. I have never heard of it happening, but really,

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Speaker 2: do you think John's going to come and play for

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Speaker 2: two hundred people unless you're going to pay him a

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Speaker 2: lot of money?

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Speaker 1: A lot of money. It does feel like there's been

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Speaker 1: a few missteps along the way, because then you think

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Speaker 1: about the fact that the entire decision to build the

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Speaker 1: casino facing the wrong way, and that then required them

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Speaker 1: to do this massive remodeling, the big about that huge

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Speaker 1: refurbishment to basically turn it around to focus more on

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Speaker 1: the fact that it is on the.

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Speaker 2: Water on Sydney Harbor.

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Speaker 1: It's on Sydney Harbor and the back of the casino

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Speaker 1: backs onto the harbor. And so what was that Probably

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Speaker 1: about ten years ago, ten to fifteen years ago, there

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Speaker 1: was the big, huge, huge redevelopment in order to basically

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Speaker 1: spin it around and make more of its location. So

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Speaker 1: there have been a few bumps along the way for

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Speaker 1: Star Entertainment they have.

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Speaker 2: The current CEO, Steve McCann, yesterday said the company continues

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Speaker 2: to work a number of potential non core asset transactions.

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Speaker 2: Yesterday morning, The fin Review reported that New York behemoth Cerberus,

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Speaker 2: Have I got that right? C E R B E

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Speaker 2: r US Cerberus Capital Management is interested in buying some

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Speaker 2: of the group's debt. What's important about that is that

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Speaker 2: that probably gives it an extension of that debt, So

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Speaker 2: very relevant.

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Speaker 1: Cerberus is the one the dog with the three heads,

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Speaker 1: isn't it.

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Speaker 2: I can't remember, off the top of my head.

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Speaker 1: Being on your Greek mythology or I don't know who

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Speaker 1: would have thought that we'd be discussing Greek mythology in

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Speaker 1: today's podcast. Maybe that stick to business? What about this one?

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Speaker 1: What do you make of this? The boss of Pilber

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Speaker 1: Minerals has called the bottom of the lithium market. He

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Speaker 1: says that prices the producer is now receiving are better

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Speaker 1: than early last year. That sounds like a big call, though,

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Speaker 1: don't you think.

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Speaker 2: Yeah? Look, Nicols sector was probably hit hardest, but lithium

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Speaker 2: was next. Over the last couple of years and they

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Speaker 2: said there's had this oversupply and then lower demand for

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Speaker 2: electric vehicles, prices fell. We ended up having a bunch

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Speaker 2: of companies including Pilbra mothballing Plants. Well, yesterday chief executive

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Speaker 2: Dale Henderson came out. He said that Pilbro, which is

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Speaker 2: Australia's biggest pure lithium play, was actually receiving higher prices

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Speaker 2: or did so in the December quarter and he called

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Speaker 2: it an inflection point. His theory is that the ev

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Speaker 2: freight train is off and running, off and running is

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Speaker 2: how he put it. That's not going to stop, according

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Speaker 2: to mister Henderson, so he reckons that we're at an

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Speaker 2: inflection point for his saken, for Pilbra Minerals and all

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Speaker 2: the lithium minus. I hope that's the case.

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Speaker 1: Cerberus is a three headed dog in Greek mythology well done.

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Speaker 1: His role is to guard the gates of hadesn't allow

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Speaker 1: any allowed dead people in, but no one else there

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Speaker 1: You go, sorryn't. I wouldn't normally revisit something if I

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Speaker 1: was wrong, But if I'm right, then absolutely I got

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Speaker 1: to give myself a bit of credit here sean booking

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Speaker 1: an international airfare on a Sunday night eight weeks in

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Speaker 1: advance and flying on a Thursday, preferably in January. I

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Speaker 1: hope you hope you're taking notes here. That is the

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Speaker 1: best way to save money on airfares.

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Speaker 2: That's according to expeediers report called air Hacks. It looked

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Speaker 2: at was literally and tens of thousands of bookings across

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Speaker 2: its site, across carriers. It found that booking on a

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Speaker 2: Sunday saved as much as seventeen percent off international fairs

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Speaker 2: twenty percent of domestic fares. So Sunday lunch, that's what

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Speaker 2: you should be doing thinking about booking somewhere to go.

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Speaker 2: If you fly over season a Thursday, you can say

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Speaker 2: about eight percent. If you fly domestically on a Saturday,

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Speaker 2: you can save about twenty six January's the cheapest month

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Speaker 2: for domestic and international flights. It's about eleven percent less

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Speaker 2: than September, which is the most expensive month. The quietest

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Speaker 2: month for air travel is February, So if you don't

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Speaker 2: want to get stuck in the middle of four seats

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Speaker 2: in the middle of the plane, try February. And in

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Speaker 2: terms of booking ahead. Everyone says you've got a book

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Speaker 2: months and months ahead internationally. Well, according to air hacks,

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Speaker 2: eight weeks for international is prime, six months for domestic.

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Speaker 1: That requires a lot of decisions to be made in.

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Speaker 2: Advance an organization.

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Speaker 1: Yeah, yeah, that's tough turning into international news.

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Speaker 2: Now.

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Speaker 1: Wall Street was somewhat calmer yesterday. You touched on this

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Speaker 1: before Sean. With the market rebounding from the emergence of

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Speaker 1: Chinese AI player.

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Speaker 2: Deep Seek, Nvidia and Oracle, which lost hundreds of billions

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Speaker 2: of dollars worth of value on Tuesday night, rebounded pretty sharply. Now.

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Speaker 2: The latest on that deep Seek story is that Microsoft

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Speaker 2: and open Ai, which owned chat GPT, I'm now investigating

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Speaker 2: with a data output from the group was obtained in

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Speaker 2: an unauthorized manner by group linked to deep Seak. That

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Speaker 2: to me sounds like I don't believe that deep seat

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Speaker 2: can do what it did without some sort of help. Anyway,

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Speaker 2: I'm sure we're going to hear a lot more about

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Speaker 2: that story. The rebound met Wall Street closed high sure.

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Speaker 1: On the turbulence. For Boeing continues that we guessed there

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Speaker 1: are lazy puns to make about airlines, aren't there. But

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Speaker 1: Boeing has has crashed to its second largest annual loss

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Speaker 1: in its one hundred and nine year history, as the

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Speaker 1: planemaker deals with the fallout of a major safety scandal.

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Speaker 1: This has been ongoing now for some time.

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Speaker 2: That's right. So it lost eleven point eight billion US

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Speaker 2: dollars last year nineteen billion. I was he dollars? How

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Speaker 2: do you do that? It has lots more, But that

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Speaker 2: was during the pandemic. So outside that year in the

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Speaker 2: pandemic where it basically couldn't sell any planes. Outside that year,

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Speaker 2: by far, the worst year it's ever had. Its total

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Speaker 2: losses over the past five years is now thirty five

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Speaker 2: billion dollars. Ouch terrible year twenty twenty four. It had

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Speaker 2: a mid air blowout of a door plug in one

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Speaker 2: of its passenger aircraft. That didn't help. There were walkouts

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Speaker 2: by tens of thousands of factory workers at the Bowing factories.

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Speaker 2: There were a string of falts aboard a spacecraft it

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Speaker 2: built for NASA. Ennis horribolous, Do I get that right? Yeah,

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Speaker 2: NNI's horribulous for Bowing.

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Speaker 1: Oh, finishing the show on a bit of Latin. We've

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Speaker 1: had Latin, We've had Greek mythology. We've had a little

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Speaker 1: bit of everything today.

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Speaker 2: You can learn. You can learn lots of things on

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Speaker 2: Fear and Greed that have got nothing to do with

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Speaker 2: the economy or business.

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Speaker 1: They should play this podcast in primary schools right around

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Speaker 1: the country.

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Speaker 2: Maybe it's sleep time for the infantes.

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Speaker 1: Pop you all off to sleep, kidd soon Up next

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Speaker 1: Fear and Greed Daily Interview with Warren Hogan. Definitely worth

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Speaker 1: a listener. All about the inflation figures yesterday. It is

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Speaker 1: coming up in the Fear and Greed playlist on your

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Speaker 1: podcast platform or at Fearangreed dot com dot au.

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Speaker 2: Thank you Sean, Thank you Michael.

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Speaker 1: It is Thursday, the thirtieth of January twenty twenty five.

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

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Speaker 1: online on LinkedIn, Instagram, x TikTok and Facebook. Our Michael

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Speaker 1: Thompson And that was.

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Speaker 2: Fear and Greed. Have a great day.