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Speaker 1: Some of the country's largest superannuation funds underperformed last financial year,

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Speaker 1: but the returns are still pretty good. Retail sales rise,

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Speaker 1: but only because stores are discounting to win customers, and

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Speaker 1: US President Joe Biden under growing pressure to not run again.

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Speaker 1: Welcome to Fear and Greed. Daily business news for people

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Speaker 1: who make their own decisions. It is Thursday, the fourth

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Speaker 1: of July twenty twenty four. Are Michael Thompson and Good Morning,

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Speaker 1: Sean Aylmer.

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Speaker 2: Good morning Michael, Sean.

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Speaker 1: The main story this morning. The superannuation funds are announcing

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Speaker 1: their performance over the last financial year, and some of

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Speaker 1: the biggest funds aren't at the top of the rankings.

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Speaker 2: According to chant West, the median return for the last

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Speaker 2: financial year is forecast to be about nine percent plus,

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Speaker 2: so that's the benchmark. Australian Super the country's biggest super fund,

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Speaker 2: delivered an eight and a half percent return in its

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Speaker 2: balanced option, which is the fourth options for new members.

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Speaker 2: The result reflects the decision to become defensive around equities

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Speaker 2: early in the financial year, meaning the fund missed some

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Speaker 2: of the run on US tech stocks, specifically in video.

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Speaker 2: It's still a pretty good return, mind you, and well

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Speaker 2: above the fund's goal of CPI plus four percent. The

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Speaker 2: Australian Retirement Trust said it's my super option, which is

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Speaker 2: the default fund return to eleven point three percent. That

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Speaker 2: was very good, while hester's my super option returned nine

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Speaker 2: point one percent. There's no doubt super returns have done

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Speaker 2: very well. In twenty twenty four financial year. There is

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Speaker 2: three point nine trillion with t trillion dollars in suber

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Speaker 2: accounts across the country. That's at the end of March.

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Speaker 2: It's the second largest asset class behind property. The amount

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Speaker 2: being contributed by everyone into their fund increased from July

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Speaker 2: one from eleven percent to eleven a half percent. So

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Speaker 2: it's certainly big business. All of us are affected by it.

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Speaker 2: And so while some of the biggest IZI super example

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Speaker 2: may not quite have achieved the median, it's still not bad.

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Speaker 1: So that's what happened last year, Sean, What about this year?

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Speaker 1: I suppose the big question is can the super funds

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Speaker 1: repeat the performance of not just last year but also

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Speaker 1: the year before, where the median fund also came in

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Speaker 1: around nine percent. Can they go for three.

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Speaker 2: Yeah, the three pete let's hope. So that would be

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Speaker 2: a pretty good effort. In Australian Supers case, Chief investment

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Speaker 2: Officer Mark Delaney realized that equities markets weren't going to

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Speaker 2: tumble late last year and started buying stocks. He's now

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Speaker 2: slightly overweight equities. Remember when we were talking about these

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Speaker 2: super funds that they are talking about billions of dollars

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Speaker 2: here so overweight. They may only be slightly overweight, but

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Speaker 2: that's still a fair chunk of money there. Mister Delaney

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Speaker 2: told the Financial Review that the last two years have

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Speaker 2: been so good that he thinks something has to give.

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Speaker 2: About seventy three percent of Australian Supers balanced fund is

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Speaker 2: in publicly traded assets equities, bonds, cash, the rest is

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Speaker 2: in private markets now. UNI supers Chief investment Officer John

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Speaker 2: Pierce told within Review that tech stocks the Commonwealth Bank

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Speaker 2: shares are overvalued, but he conceded it's tough to care

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Speaker 2: and even harder for long term investors who will have

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Speaker 2: to eventually buy back in how they should value these

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Speaker 2: big tech stocks in the Commonwealth Bank. His quote, You're

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Speaker 2: going to have to live with overvalued assets. In uniservice case,

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Speaker 2: it's increased its allocation to private credits. It's been a

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Speaker 2: fan of bonds as well from Tier two bank bonds.

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Speaker 2: I think the best way to sum it up is

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Speaker 2: the CIOs of these big super funds are entering the

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Speaker 2: new financial year with some trepidation, to say the least.

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Speaker 1: So asking you to predict what the results would be

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Speaker 1: this year when we are only three days in now

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Speaker 1: it was probably asking a little bit much.

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Speaker 2: Yeah. I thought I'd talked my way around it quite well,

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Speaker 2: but you did bring out the obvious. I didn't answer

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Speaker 2: the question who knows? Who knows?

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Speaker 1: But Sean, you have given me the perfect segue and

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Speaker 1: the perfect opportunity to promote our bonus episode that we

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Speaker 1: have coming up later today, probably around about lunchtime, maybe

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Speaker 1: some good lunchtime listening. It is our new episode that

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Speaker 1: we put out a couple of times a week called

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Speaker 1: Ask Fear and Greed, where if a listener has a question,

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Speaker 1: send it into us via Fearangreed dot com, dot au

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Speaker 1: or any of the social media platforms, and if there's

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Speaker 1: something that's been bugging you about the economy or about business,

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Speaker 1: or about shares or anything, let's try and stump Sean. Actually, no,

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Speaker 1: that's that's that's unkind, isn't it short? But we've got

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Speaker 1: a great question coming up today. It is about economics,

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Speaker 1: and we are going to put that on it. And

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Speaker 1: it's only three or four minutes, isn't it. So it's

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Speaker 1: just a short, sharp, little injection of knowledge into your day.

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Speaker 2: Yeah, exactly, So keep an eye out.

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Speaker 1: For that one probably about midday today. Now, local markets,

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Speaker 1: how do they perform? Yesterday?

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Speaker 2: The S and p ASX two hundred closed up zero

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Speaker 2: point three percent, seven seven and forty points, with the

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Speaker 2: tech stocks leading the way thanks to a stronger not

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Speaker 2: on Wall street Wise. Tech Global reversed some of the

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Speaker 2: previous session's losses, finishing up nearly two percent. Zero also

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Speaker 2: did well. Good day for many of the miners. The

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Speaker 2: best on the bores for at least of the top

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Speaker 2: two hundred was uranium stock Deep Yellow, while the energy

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Speaker 2: stocks did well. BHP forty's, few medals and rear all

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Speaker 2: closed up one percent or better. Worst was Linetown Resources

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Speaker 2: than that was the best in Tuesday, so there's a

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Speaker 2: bit of profit taking going on yesterday.

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Speaker 1: The big banks were all lower.

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Speaker 2: In corporate news, online book retailer book Topia has been

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Speaker 2: placed in voluntary administration. The shares will remain suspended after

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Speaker 2: they were halted in mid June as the company searched

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Speaker 2: for more funding and APA Group. Its share price fell

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Speaker 2: after it said it expected a non cash impairment of

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Speaker 2: one hundred and forty five million dollars to its member

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Speaker 2: Sydney Ethane Pipeline.

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Speaker 1: And what about international markets?

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Speaker 2: The broad based S and P five hundred closed above

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Speaker 2: five five hundred points yesterday. That was the first time

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Speaker 2: that's ever happened. Was pushed high by tech stocks, notably

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Speaker 2: Tesla that finished up ten percent. More on that later

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Speaker 2: in the show. The tech heavy Nasdaq also finished at

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Speaker 2: a record above eighteen thousand points for the first time

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Speaker 2: after the US Federal Reserve chair Jerome Powell said he'd

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Speaker 2: seen some really good progress in a recent decline in

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Speaker 2: the feds preferred measure of inflation moving too Commodity markets,

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Speaker 2: oil prices remain on an upwards trend, with Brent fetching

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Speaker 2: close to eighty seven US dollars a barrel. Goals also

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Speaker 2: trading higher around twenty three thirty US dollars Announce. That's

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Speaker 2: two thousand, three hundred and thirty US dollars announce, Michael

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Speaker 2: not twenty three dollars thirty of course.

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Speaker 1: I thought we've got a bargain here, Sean.

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Speaker 2: Get in there. I ore prices earlier in the month

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Speaker 2: beforecast that drop blow one hundred US dollars a ton.

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Speaker 2: They've shown some great resilience. They're trading around one hundred

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Speaker 2: and eight US dollars a ton, obviously good for the

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Speaker 2: Ossie exporterers. In currency markets, bitcoin is worth under sixty

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Speaker 2: one thousand US dollars a unit, and the Aussie dollars

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Speaker 2: buying sixty six point eight US cents. A massive zero

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Speaker 2: point one US cent increase in twenty four hours, and

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Speaker 2: in fact I think it's a zero point two US

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Speaker 2: cent increase in the last three days.

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Speaker 1: It's really cutting loose for the new financial years. Oh god,

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Speaker 1: the thrills and the Aussie dollar currency. It's giving me

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Speaker 1: the vapors. Sean, all right, we'll be back in a

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

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Speaker 1: Prime Minister Anthony Abernezi has told Parliament he expects Fatima

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Speaker 1: Payman to quit the Labor Party in coming days.

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Speaker 2: I mean expectations the rebel senator will move to the

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Speaker 2: cross bench with the backing of Muslim groups. He said

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Speaker 2: the plan had been in train for more than a month.

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Speaker 2: Senator Payment crossed the floor last week to support a

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Speaker 2: Green's motion to recognize the state of Palestine. That and

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Speaker 2: her subsequent refusal to abide by party rules resulted in

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Speaker 2: her indefinite suspension from the caucus. Mister Alberzi has met

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Speaker 2: with Senator Payment on two separate occasions to discuss her

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Speaker 2: future in the Labor Party and has repeatedly maintained that

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Speaker 2: he hoped she would return to caucus. Doesn't sound like

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Speaker 2: that's going to happen.

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Speaker 1: No, it's looking a little unlikely now. Retail sales jumped

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Speaker 1: zero point six percent in May, though most of that

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Speaker 1: was on the back of discounting by retailers.

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Speaker 2: It was actually a pretty good number. Now, it's a

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Speaker 2: number that I reckoned. Stephen Coacoola's would have liked a

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Speaker 2: resident economist on the show every Monday morning. I reckon

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Speaker 2: he would have liked it until he actually looked at

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Speaker 2: the details. Then maybe not.

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Speaker 1: They should just do what I do. Just look at

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Speaker 1: the headline. The details depressed me.

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Speaker 2: Sean, Yes, true, very true, and sometimes tedious. Basically, shoppers

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Speaker 2: took advantage of early end of financial promotions and sales.

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Speaker 2: According to the Australian Bureau of Statistics. Retailers continue to

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Speaker 2: rely on discounting and sales events to encourage shoppers to spend.

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Speaker 2: They're not getting what they really want to get for

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Speaker 2: the process selling. While seasonally adjusted spending rows, underlying spending

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Speaker 2: was actually stagnant compared to a year ago. The trend

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Speaker 2: is only up one and a half percent. Retailers are

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Speaker 2: working very hard to burst sales at the moment, and

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Speaker 2: we know that from spate of companies who have warned

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Speaker 2: shareholders about soft turnover. IMP's chief economist Shane Oliver. Yes,

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Speaker 2: they said, we're in the midst of the worst retail

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Speaker 2: recession we've seen in the history of the data, both

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Speaker 2: in terms of length and magnitude. What's going to be

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Speaker 2: really interesting, of course, is what happens to retail sales

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Speaker 2: this month now that the Stage three tax cuts have kicked.

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Speaker 1: In and staying in the economics world Sewan, there was

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Speaker 1: a welcome jump in dwelling approvals in May.

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Speaker 2: Yes, so only a little, only little.

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Speaker 1: Again, I offer kind of a bit of positive good

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Speaker 1: retail sales number, good jump in dwelling approvals, and then

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Speaker 1: you come in with the big.

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Speaker 2: But economists and none as the dismal scientists remember that.

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Speaker 1: Yes, well, you are certainly proving that to be true.

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Speaker 2: Go on now, these numbers jump around a febit keep

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Speaker 2: them in mind. But approvals for rose five and a

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Speaker 2: half percent in May, following a year two percent jump

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Speaker 2: in April. The increase in May was driven by big

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Speaker 2: rise in approvals apartments, townhouses, that sort of stuff, not

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Speaker 2: so much for houses. Approvals were up most in Western

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Speaker 2: Australia than Queensland, South Australia, Tasmania, in New South Wales.

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Speaker 2: Given the slump in the building industry in recent years,

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Speaker 2: any good news in terms of building approvals is very welcome.

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Speaker 2: But the pace of approvals is now running at only

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Speaker 2: one hundred and sixty one thousand dwellings perenum. The peak

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Speaker 2: during the apartment building boom in twenty sixteen was about

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Speaker 2: two hundred and forty thousand perenum. Underlying demand is about

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Speaker 2: two hundred and fifty thousand perenum on imp estimates. This

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Speaker 2: chronic undersupply of housing remains a big, big problem for

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Speaker 2: the economy, and it will also keep pressure on prices

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Speaker 2: and rents.

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Speaker 1: Tech giant Google will likely face increased competition for search

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Speaker 1: services on Android devices following undertakings by telco giants Telstra

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Speaker 1: and Optus to the competition regulator.

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Speaker 2: Really interesting this the Australian Competition and Consumer Commissions ongoing

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Speaker 2: investigation into Google's search services in Australia led to it

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Speaker 2: discovering agreements the tech group entered into with Telstra and

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Speaker 2: Optus a few years back. Under the deals, Google search

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Speaker 2: service was installed as the default service on Android devices.

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Speaker 2: The companies supplied to customers in return for a share

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Speaker 2: of its advertising revenue. Google, which developed the Android operating system,

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Speaker 2: have had the agreement since at least twenty seventeen. According

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Speaker 2: to report in The Australian. The deals limited the ability

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Speaker 2: for rival search engines to be pre installed or promoted

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Speaker 2: on Android devices, and the agreements expired on June thirty.

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Speaker 2: Both telcos have now told the HRIABLEC that they won't

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Speaker 2: renew or enter into any similar arrangements with Google. The

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Speaker 2: HABLEC has found that there are strong consumer devices towards

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Speaker 2: default settings on mobile devices. Google search market share is

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Speaker 2: about ninety eight percent. Now, the HRIABLEC is tiring to

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Speaker 2: take action to ensure that these preloaded services aren't skewing

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Speaker 2: the market and.

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Speaker 1: Finally showing the electronics design software group Altiam looks set

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Speaker 1: to leave the ASX after US authorities okayed a takeover

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Speaker 1: by a Japanese semiconductor company. Why are the US authorities okay?

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Speaker 2: Because it's based in San Diego listed here. Now the

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Speaker 2: company receives a nine point one billion dollar offer from

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Speaker 2: a group called Rnassis Electronics. That offer is why ol

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Speaker 2: Tiam is one of the best performing stocks last financial year.

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Speaker 2: Now the board of al team has recommended the bid.

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Speaker 2: It actually went had to go to competition authorities in

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Speaker 2: a bunch of jurisdictions where it operates, so here in Australia,

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Speaker 2: in the US, in Germany and Turkey. There will now

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Speaker 2: approve the proposal. Shareholders meet on twelve July to vote

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Speaker 2: on the deal, but it should pass thereby taking yet

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Speaker 2: another company off the AX.

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Speaker 1: This is really becoming a trend, isn't it.

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Speaker 2: It certainly is.

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Speaker 1: After the show, sean quick mention of this one, You

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Speaker 1: have an interview coming up today with Stuart Price, who

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Speaker 1: is the CEO of CISL, Australia's leading litigation funders. This

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Speaker 1: is an interesting space.

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Speaker 2: So we were sitting around talking about who would be

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Speaker 2: interesting to be on the show, and we kind of

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Speaker 2: got this conversation going you me and Adam Langou wonderful

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Speaker 2: esteemed colleague, who is our judge and our weekend edition.

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Speaker 2: If you haven't listened to the weekend edition, you'll understand

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Speaker 2: why I'm saying, wonderful esteem.

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Speaker 1: Could it be any more sarcastic? You are still bitter

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Speaker 1: about the lashing.

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Speaker 2: I gave you? Yes? Probably. Anyway, We're talking about asset

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Speaker 2: classes that we don't talk much about, and litigation funding

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Speaker 2: is a really interesting asset class. It gets a bit

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Speaker 2: of a bad rap, but an actual fact, you know

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Speaker 2: when we talk to Stewart, as he puts it, what

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Speaker 2: we're trying to do. We raise money and we take

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Speaker 2: on the fight that individuals probably couldn't afford to take

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Speaker 2: on themselves, and they have an incredible success. Right. There's

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Speaker 2: all sorts of hoops they jumped through before they decide

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Speaker 2: to take on a case, a class action primarily, and

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Speaker 2: you know, investors invest money and then get a return

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Speaker 2: on that. But it's just a really interesting chat about

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Speaker 2: how that whole world works.

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Speaker 1: Yeah, it is a good one. Who's coming up after

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Speaker 1: the show, so stick around. For that. In international news,

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Speaker 1: Sean Joe Biden is under increasing pressure to drop out

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Speaker 1: of the presidential race after a Democratic congressman from Texas

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Speaker 1: called on him to drop out, and state governors sought

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Speaker 1: a White House meeting to discuss his candidacy. This is

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Speaker 1: not looking good. No.

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Speaker 2: Lloyd Doggett, which is a cracking name. Doubleget Lloyd Doggett.

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Speaker 1: He sounds like a movie character.

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Speaker 2: He or someone who probably should be the first person

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Speaker 2: from the president's own party to publicly call for him

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Speaker 2: to step down.

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Speaker 1: If I didn't know he was from Texas, I would

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Speaker 1: say he's from Texas.

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Speaker 2: Yep. Well, you're right. Basically, mister dogget said there's too

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Speaker 2: much at stake to risk a Donald Trump victory in

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Speaker 2: November's election. Also, a Democratic congressman from Maine said he

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Speaker 2: had no confidence in Joe Biden's ability to win the election,

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Speaker 2: while another from Washington State said she thought mister Biden's

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Speaker 2: performance in last week debate had cost him the election.

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Speaker 2: The concern among Democrats, including state governors who are reportedly

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Speaker 2: gathering in Washington, DC, is Joe Biden's age and fitness.

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Speaker 2: The Supreme Court decision this week, which gives the president

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Speaker 2: legal immunity when acting in an official capacity has actually

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Speaker 2: rallied Democrats who are very fearful that Donald Trump, if elected,

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Speaker 2: would actually abuse that right. Joe Biden said his performance

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Speaker 2: in the debate last week reflected his travel schedule ahead

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Speaker 2: of the two meeting, though he did actually spend the

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Speaker 2: week immediately before last Thursday's debate at Camp David preparing.

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Speaker 2: So I don't know how that flies anyway. A lot

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Speaker 2: of noise about the place, even, you would say, momentum

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Speaker 2: growing to try and convince Joe Biden to step down.

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Speaker 1: Yeah, it sounds like it. And while we're still in

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Speaker 1: US politics, Sewan, Donald Trump's sentencing hearing in the Manhattan

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Speaker 1: hush money case has been pushed back to mid September.

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Speaker 1: The man hadn't hush money case sounds like a hardy

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Speaker 1: boy's mystery. Oh yeah it does, doesn't it. That's pretty good?

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Speaker 2: Yeah, but you digress.

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Speaker 1: I do so.

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Speaker 2: Mister Trump, who's the first former president to be convicted

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Speaker 2: of a crime, was set to be sentenced in a

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Speaker 2: week's time, but following that Supreme Court ruling last week,

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Speaker 2: lawyers for mister Trump wrote to Justicewan Merchant, who iver

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Speaker 2: saw the Manhattan hush money case and asked for more

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Speaker 2: time to appeal the verdict. They argued that some of

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Speaker 2: the evidence used at trial, including social media posts and

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Speaker 2: public statements, might have been official acts and therefore inadmissible

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Speaker 2: under the Supreme Court's decision. So we can already see

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Speaker 2: the implications of that decision.

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Speaker 1: Earlier in the week, now, Sean, you mentioned Tesla earlier

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Speaker 1: in the show, the share price for the ev maker

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Speaker 1: junk ten percent after the company reported a second consecutive

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Speaker 1: quarterly drop in deliveries on the back of sloding demand

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Speaker 1: and tough competition from cheaper Chinese rivals.

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Speaker 2: But Michael, the good years complaining about me, I was

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Speaker 2: giving you the bad years. The slowdown is lesson expected,

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Speaker 2: hence the urging Tesla's share price. The company stock is

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Speaker 2: now up thirty five percent since June eleven. Full of

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Speaker 2: good news.

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Speaker 1: You're full of something, my.

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Speaker 2: Mind. You the value of the company's still around sixty

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Speaker 2: percent of its peak that was back in November twenty

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Speaker 2: twenty one.

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Speaker 1: Full of something.

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Speaker 2: I've been thrown here anyway.

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Speaker 1: Sorry, sorry, I'll sit down.

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Speaker 2: Tesla had delivered four hundred and forty four thousand vehicles

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Speaker 2: in the three months to the end of June. It's

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Speaker 2: back as number one EV maker in the world after

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Speaker 2: China's byd said it delivered at four hundred and twenty

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Speaker 2: six thousand vehicles in that same period. That further good

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Speaker 2: news for mister Muski's had a pretty good few weeks.

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Speaker 2: Shareholders recently reapproved his fifty six billion dollar paypacket that

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Speaker 2: had been struck down by Delaware court. They also agreed

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Speaker 2: to move the company to Texas. It's been repositioned as

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Speaker 2: a robotics and AI company. They came out and said

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Speaker 2: the robot taxi is supposed to be unveiled in August eight.

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Speaker 2: Elamsk's having a good run.

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Speaker 1: Really, yeah, there is a lot going on for him.

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Speaker 1: One more sean one last story, Google's greenhouse gas emissions.

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Speaker 1: This is from Google right. The greenhouse gas emissions of

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Speaker 1: the company have served forty eight percent in the past

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Speaker 1: five years due to the expansion of its data centers

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Speaker 1: that underpin artificial intelligence systems things like that.

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Speaker 2: The tech giants commitment to get to net zero by

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Speaker 2: twenty thirty is now definitely in doubt, and the dilemma

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Speaker 2: very much highlights a less beneficial consequence of the growth

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Speaker 2: of cloud computing and artificial intelligence, basically the huge demand

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Speaker 2: for power. Google's pollution amounted to fourteen point three million

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Speaker 2: tons of carbon equivalent last year, which is forty eight

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Speaker 2: percent more than its twenty nineteen baseline and a thirteen

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Speaker 2: percent rise since the previous year. According to report in

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Speaker 2: the Financial Times, the tech giant said the future environmental

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Speaker 2: impact of AI was complex and difficult to predict. It's

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Speaker 2: now calling its twenty thirty target of net zero extremely ambitious.

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Speaker 2: Mind it did add which I liked, in its statement

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Speaker 2: that there is a tremendous opportunity for climate solutions that

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Speaker 2: are enabled by AI. Maybe maybe, but I hope they

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Speaker 2: get there.

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Speaker 1: Up next, Fear and Greed Daily Interview your guest today,

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Speaker 1: as we mentioned Stuart Price from CISL, one of Australia's

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Speaker 1: litigation funders. Fascinating stuff.

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Speaker 2: Yeah, all about investing in litigation funding and sorts of

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Speaker 2: returns that it's providing. It is a as you say,

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Speaker 2: it's a very interesting chat.

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Speaker 1: Yeah sure. It is. Up next to 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 and Sean I forgot to mention yesterday that

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Speaker 1: the new episode of How Do They Afford That is

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Speaker 1: out well now. It is our sister podcast featuring me

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Speaker 1: and financial planner Canna Campbell, and this time we were

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Speaker 1: joined in the studio by a man named Adam McCabe

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Speaker 1: who is a mortgage broker, and he was actually talking

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Speaker 1: about the likelihood that, look, if interest rates do actually

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Speaker 1: go up again, potentially as soon as August, that there

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Speaker 1: are some things that you can do to kind of

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Speaker 1: prepare best for that, and they include conversations with your bank,

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Speaker 1: conversations with the mortgage broker, and some things that you

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Speaker 1: can do to try and lessen the impact of a

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Speaker 1: potential rate hike. It is worth a listener. I'll put

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Speaker 1: a link in today's show notes and you can find

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Speaker 1: How Do They Ford That wherever you listen to podcasts

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Speaker 1: as well. Thank you Sean, Thank you Michael. It is Thursday,

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Speaker 1: the fourth of July twenty twenty four. Make sure you're

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

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Speaker 1: x TikTok and Facebook. I'm Michael Thompson. And that was

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