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Speaker 1: Welcome to Fear and Greed business news you can use today.

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Speaker 1: Fires in Victoria and floods in Queensland threaten lives and

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Speaker 1: property as federal and state government step in to offer

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Speaker 1: financial assistance. BHP closes in on Comwealth Bank in the

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Speaker 1: race to be the country's largest company, and investors and

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Speaker 1: economists are split on whether the Reserve Bank will hike

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Speaker 1: rates in twenty twenty six, plus, Rio Tinto and Glencore

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Speaker 1: in discussions to create the world's biggest mining company, and

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Speaker 1: investors take a punt that a thirty billion dollar bid

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Speaker 1: for Blue Scope Steel will ultimately succeed. It is Monday,

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Speaker 1: the twelfth of January twenty twenty six. I'm Michael Thompson

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Speaker 1: and good morning Sean Aylmer.

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Speaker 2: Good morning Michael.

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Speaker 1: Now Sean, we are back on board with all the

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Speaker 1: latest news and views every day. The main story this

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Speaker 1: morning bushfires in Victoria and floods and storms in Queensland

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Speaker 1: continue to threaten property and lives. It's really been a

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Speaker 1: horror few days in terms of the weather crisis. The

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Speaker 1: town of Euroa in Victoria at risk as the bush

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Speaker 1: fire in northeast Victoria continues to rage.

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Speaker 3: Fire in Victoria has scorched three hundred and fifty thousand

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Speaker 3: hectares and claimed three hundred homes and buildings. At least

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Speaker 3: one person has died as a result of the fires.

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Speaker 3: That person died near the central Victorian town of Seymour.

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Speaker 2: Last night.

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Speaker 3: There were thirty two active fires, including ten major blazers,

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Speaker 3: presenting the biggest threat across that state. Despite cooler weather,

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Speaker 3: multiple evacuations were ordered yesterday. Now. In Queensland, the risk

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Speaker 3: of fooding remains high after exo Tropical Cyclone Kogi made

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Speaker 3: landfall south of Townsville, with huge amounts of rainfall expected

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Speaker 3: along the North Queensland coast. A number of airports in

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Speaker 3: the region were closed. Fifteen thousand homes and businesses were

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Speaker 3: without power last night, and estimated forty five thousand head

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Speaker 3: of cattle have been lost in the floodwaters.

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Speaker 1: It's extraordinary, isn't It's just a reminder of how vast

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Speaker 1: this country is that you can have entirely different natural

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Speaker 1: disasters happening at the same time. The Prime Minister, Anthony Albernezi,

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Speaker 1: was in Victoria yesterday. He said that it was still

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Speaker 1: too early to tally the cost of the bush fire

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Speaker 1: and the flooding all taking place at the same time,

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Speaker 1: but his highlight to the growing costs of changing weather.

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Speaker 2: Patterns exactly right.

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Speaker 3: He offered assistance and to both states, Queensland and Victoria.

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Speaker 3: The Victorian Premier Center Allen said nine ene and a

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Speaker 3: half million dollars in relief payments will be made available

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Speaker 3: immediately for people in fire affected regions in the state.

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Speaker 3: The Insurance Council of Australia has declared the Victorian bushfires

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Speaker 3: to be a significant event that actually helps people get

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Speaker 3: access to insurance payments. Once that has been declared, we

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Speaker 3: still have a ways to go in this The weather

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Speaker 3: is cooler, particularly along the southeast of the country, so

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Speaker 3: that's promising, but very worrying with those mean thirty odd

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Speaker 3: bushfires still out of control.

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Speaker 1: Yeah, it is worrying. Now moving towards markets now shown

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Speaker 1: we have taken a bit of a break from the

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Speaker 1: daily news over the holiday period. We have had daily

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Speaker 1: episodes every day during that period. But while we have

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Speaker 1: just a little bit of a breather, the market hasn't.

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Speaker 1: And while we were away, Commonwealth Bank's share price has dropped,

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Speaker 1: BHPS has risen and the miner is now nipping at

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Speaker 1: the heels of the bank in terms of becoming the

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Speaker 1: country's largest stock.

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Speaker 2: Isn't this remarkable?

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Speaker 3: About the middle of last year we were saying Commonwealth

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Speaker 3: Banks fifty percent bigger than BHP, and how it had

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Speaker 3: just it was charging ahead. Come off bank of course,

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Speaker 3: the largest company in the country BHP number two, come

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Speaker 3: off bank. From fifty percent six months ago, it's now

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Speaker 3: just five percent bigger than BHP. If the trend continues,

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Speaker 3: BHP could soon once again become the largest stock.

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Speaker 2: On the BURS. I think that is a remarkable to around.

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Speaker 2: That's amazing, it is, that's interesting.

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Speaker 3: I'm not really sure there was that much interesting in

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Speaker 3: the rest of the market, be perfectly honest. Over the

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Speaker 3: last few weeks or so, the S and PA SX

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Speaker 3: two hundred, it's pretty much done nothing, Michael. I mean,

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Speaker 3: trading has been thin with the holiday period.

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Speaker 1: Come on, you you have been a business journalist for

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Speaker 1: years and I'm sure that you were told never put

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Speaker 1: in your headline nothing's nothing happened.

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Speaker 2: So at least you're.

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Speaker 1: Led with Comwealth Bank and BHP hiding the fact that

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Speaker 1: not much else is going on.

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Speaker 3: That's well, there's actually been some couple of really big mergers,

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Speaker 3: which we'll get to a bit later on, But really,

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Speaker 3: I mean so far this year, the market is flat

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Speaker 3: finished Friday at eight seven hundred and eighteen points. Other

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Speaker 3: global markets, though, are trading near record levels at the moment.

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Speaker 3: We're about four or five percent of our October highs

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Speaker 3: so far in twenty twenty six. Resource stocks have done best,

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Speaker 3: banks the worst.

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Speaker 1: You mentioned global markets. Dare I ask what is happening

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Speaker 1: in global markets?

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Speaker 3: Well, I'm going to give you a brief updates plenty

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Speaker 3: going on. Wall Street hit a record high over the weekend.

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Speaker 3: Not with standing Donald Trump's forays into Venezuela and suggestions

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Speaker 3: the US will take Greenland, the employment market in the

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Speaker 3: US remains pretty robust. Traders don't think there will be

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Speaker 3: a rate cut from the Federal Reserve later this month.

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Speaker 3: That's pretty much what's driving that market. In the UK,

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Speaker 3: the Footsie one hundred hit a new record on Friday. Energy,

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Speaker 3: defense and mining stocks doing leading the way. The big

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Speaker 3: news over the past few sessions has been the confirmation

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Speaker 3: of renewed merged discussions between Glencore and Rio.

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Speaker 2: Will get to that one.

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Speaker 3: French, German and Italian stock exchanges are also training at

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Speaker 3: or near record levels. In fact, the real laggard I

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Speaker 3: reckon over the last twelve months when I was looking

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Speaker 3: at these numbers yesterday. So US done pretty well, Europe's

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Speaker 3: done really well, China has done really well, Poor Old Australia,

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Speaker 3: poor US well, and truly an underperformer.

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Speaker 1: That's not particularly a great way to start away from

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Speaker 1: stocks on. Oil prices remain under pressure, though they did

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Speaker 1: jump over the weekend a bit. What's happening in Venezuela

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Speaker 1: and the escalating protests in Iran, which we'll talk a

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Speaker 1: bit about later. They've thrown a bit of a scare

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Speaker 1: into a market which a week ago was actually worried

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Speaker 1: about oversupply.

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Speaker 2: That's right now.

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Speaker 3: Those relatively low oil prices we were seeing at the

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Speaker 3: petrol pump, I don't know about you, Michael. I was

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Speaker 3: filling up at them, you know, dollars seventy one, dollars

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Speaker 3: seventy three.

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Speaker 2: Is pretty happy about that.

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Speaker 3: Oh.

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Speaker 1: I was seeing prices of a dollar fifty five to

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Speaker 1: a dollar sixty, and then diesel, which just does not

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Speaker 1: seem to follow any logical pattern whatsoever, was still like

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Speaker 1: a dollar eighty when the petrol next to it was

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Speaker 1: a dollar sixty, so I was so furious.

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Speaker 3: I did see a dollar one hundred and forty nine,

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Speaker 3: so that was like the first time I've seen it,

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Speaker 3: just after i'd filled up.

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Speaker 2: Of course, we only see those numbers after you that's

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Speaker 2: whatever it is. But we digress. Gold.

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Speaker 3: If you haven't been watching, it's continued to appreciate of

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Speaker 3: about seven percent of the past month, more than forty

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Speaker 3: five hundred US dollars announced the OSSI dollars training around

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Speaker 3: sixty seven US dollars US since close to fifteen months

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Speaker 3: high close to your heart, this particular story, and we're

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Speaker 3: going to, I dare say, talk about this for the

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Speaker 3: next three months.

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Speaker 2: The story there is very much about interest rates, whether

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Speaker 2: or not the FED will cut.

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Speaker 1: How many times do you reckon? I'm going to ask

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Speaker 1: you over the next few months. Is now a good

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Speaker 1: time to buy US dollars ahead of my trip to

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Speaker 1: the States?

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Speaker 2: And you will.

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Speaker 1: You will give me the same advice you have given

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Speaker 1: me before. Just keep doing it every month, do the

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Speaker 1: same amount every month, and it'll average out over the

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Speaker 1: long run.

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Speaker 3: If you've got five months and you want to spend

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Speaker 3: five thousand dollars to one thousand dollars, a month because

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Speaker 3: you'll average it out.

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Speaker 1: See I do listen, you do that.

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Speaker 3: We haven't had that discussion for a couple of years.

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Speaker 3: That's amazing.

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Speaker 1: I remember everything. Sometimes I actually put your advice into play. Sean. Okay,

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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.

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Speaker 2: Sean.

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Speaker 1: Ahead of the break, you mentioned the rate cut debate

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Speaker 1: driving the Aussie dollar. What's the late economic news.

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Speaker 3: Well, in short, investors and economist are still split over

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Speaker 3: whether or not there'll be a rate hike this year,

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Speaker 3: or perhaps no change to rates. The November Consumer Price

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Speaker 3: Index data, which came out last week shows inflation just

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Speaker 3: a touch weaker than expected. They're still above the Reserve

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Speaker 3: banks two to three percent target. The biggest problem rents

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Speaker 3: and housing. That's according to the Reserve Bank, they're still

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Speaker 3: way too high. Worth a mention from last week, Building

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Speaker 3: approval figures jumped fifteen percent, the best monthly increase in

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Speaker 3: four years. Puts it on track for about a two

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Speaker 3: hundred and five thousand new build per year, which is

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Speaker 3: not quite where the government wants it, but way better

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Speaker 3: than it's been for quite some time. Terms of interest rates,

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Speaker 3: I'm afraid no one really thinks this going to be

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Speaker 3: a rate cut this year, or hardly anyone thinks that

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Speaker 3: December quarter inflation at the end of this month could

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Speaker 3: well determine when the next hike is.

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Speaker 1: As worth having a listen to today's interview, which has

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Speaker 1: actually been released around lunchtime today. You're speaking with Lucy

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Speaker 1: who is of course the chief economist at Westpac about

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Speaker 1: all of this, and she's got a great take on

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Speaker 1: everything to do with inflation and interest rates and all

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Speaker 1: of that.

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Speaker 3: Her ability to dive deeply into data and then turn

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Speaker 3: it around and say so this is actually what it

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Speaker 3: means is almost unparalleled. It's probably unfair on some other

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Speaker 3: people out there. Play in English, Yeah, but she's just

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Speaker 3: her ability to really get to the number of it

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Speaker 3: is quite incredible.

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Speaker 1: Yeah. Yeah, it's coming up later. That will be in

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Speaker 1: your playlist at around about lunchtime today. Now, you mentioned

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Speaker 1: before the Rio Tinto and glen Core talks. This has

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Speaker 1: been fascinating because just the scale of it's so big.

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Speaker 1: What's going on.

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Speaker 3: So they've reready started talks over a potential mega merger

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Speaker 3: to create the world's largest mining company. Last time they

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Speaker 3: spoke about a year ago, those talks collapsed, it would

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Speaker 3: create a company with the value of about two hundred

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Speaker 3: and sixty billion US dollars. Now, the biggest mining company

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Speaker 3: in the world is BENJP two hundred and sixty billion.

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Speaker 3: Usty is about sixty percent bigger than BHP. Comes at

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Speaker 3: a time, of course, when everyone wants copper very much,

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Speaker 3: is reshaping the sector. Late last week, the two said

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Speaker 3: that they were in preliminary discussions about a possible combination

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Speaker 3: of some or all of their businesses, which could include

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Speaker 3: an all share merger between Rio Tinto and Glencore. Now

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Speaker 3: Rio is bigger than grigen Core, and the structure probably

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Speaker 3: means the Aussie company buys the Swiss company. Over the weekend,

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Speaker 3: investors kind of back that theory. Glennclaw's share price jumped

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Speaker 3: nine percent. Rio was down six percent. This also kind

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Speaker 3: of puts some pressure on BHP. We're talking about it

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Speaker 3: taking over from Commonwealth Bank BHP because we had the

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Speaker 3: Anglo American Tech Resources.

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Speaker 2: Wasn't the deal from last year. We've got this one.

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Speaker 3: BHP doesn't want to be left out on its own

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Speaker 3: too much. Even though it is the biggest, it needs

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Speaker 3: more copper assets. It's going to be very, very interesting

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Speaker 3: to watch.

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Speaker 1: And the other big m and a announcement over the

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Speaker 1: past fortnight as a bid for blue Scope Steel High

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Speaker 1: consortium including Kerry Stokes as SGHS Limited.

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Speaker 3: Yes, I said, Kerry Stakes. It's actually the Stokes family,

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Speaker 3: but of course we all know Kerry Stokes runs the

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Speaker 3: Stakes family.

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Speaker 1: Da'mi he's the head of the family, right, yeah.

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Speaker 3: Yeah, yeah. The thirteen point two billion dollar bid was

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Speaker 3: rejected by Bluescope, with shareholders saying it is too low.

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Speaker 3: The bid was about a twenty five percent premium to

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Speaker 3: what Bluescope was training ahead of the announcement, also at

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Speaker 3: a level I mean post the bid, it jumped the

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Speaker 3: twenty five percent now at a level not seen the

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Speaker 3: steel company in about seventeen years. Bluescope closed on Friday

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Speaker 3: at thirty dollars a share. That's about the bid price.

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Speaker 3: So obviously investors think a deal will be done SGH

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Speaker 3: and a US company, Steel Dynamics one to split Bluescope

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Speaker 3: into two, with the Ohio Steel Works effectively being spun out.

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Speaker 3: The sicking point, it appears, is the value of the

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Speaker 3: company's property holdings. Now, there were many reports in the

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Speaker 3: last couple of days with one of the biggest shareholders,

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Speaker 3: one of the big super fun saying that it's not enough.

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Speaker 3: But obviously there's a going to be this toing and froing,

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Speaker 3: and just the fact that investors have priced Bluescope at

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Speaker 3: the bid price, it suggests that investors reckon will be done.

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Speaker 1: All right. Turn into international news now, hundreds of people

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Speaker 1: are believed to have been killed in Iran as authorities

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Speaker 1: crack down on protests.

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Speaker 2: That's right, I mean very worrying this.

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Speaker 3: It's very much a powder key situation. I don't think

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Speaker 3: that's overstating it. The US has repeatedly said that killing

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Speaker 3: protesters by the Iranian authorities would be met with a

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Speaker 3: military response from America. Iran blames the US for turning

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Speaker 3: peaceful protests into what it calls violent, subversive acts and

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Speaker 3: widespread vandalism. Social media footage out of the country, notwithstanding

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Speaker 3: there's a blanket shutdown of internet and telecommunications networks, show

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Speaker 3: hundreds of thousands of people marching and chanting anti regime slogans. Meanwhile,

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Speaker 3: have the Week and US President Donald Trump ordered large

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Speaker 3: scale strikes on Islamic state groups in Syria. Tens of

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Speaker 3: thousands of people marched through Minneapolis of the weekend to

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Speaker 3: protest the shooting by ane agent of a protester in

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Speaker 3: that city. More than a thousand rallies were planned nationwide

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Speaker 3: over the weekend against the federal government's deportation drive, ice,

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Speaker 3: of course, being the people who have been asked by

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Speaker 3: the White House to deport what they claim to be illegals,

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Speaker 3: whether it is in Minnesota, whether it is in Iran,

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Speaker 3: in Syria, Greenland. Will throw that into like it really

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Speaker 3: is such a difficult situation to predict, and Donald Trump

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Speaker 3: is unpredictable, which he may actually think is a good thing.

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Speaker 2: It does make things difficult, though.

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Speaker 1: It certainly does, especially when it is changing not just

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Speaker 1: by the day, but almost by the hour in many

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Speaker 1: of these situations. Exactly right, All right, coming up next

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Speaker 1: you'll hear it in your playlist at around lunchtime. It

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Speaker 1: is our special Summer series episode with Lucy ellischief economist

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Speaker 1: at Westpac. Thank you very much, Sean.

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Speaker 2: Thanks Michael.

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Speaker 1: It's Monday, the twelfth of January twenty twenty six. Make

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Speaker 1: sure you're following the podcast and join us online as

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Speaker 1: well on LinkedIn, Instagram, x TikTok, and Facebook. I'm Michael Thompson.

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Speaker 1: That was fear and breed. Have a great day.