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Speaker 1: JB hi Fi announces a slump in its profit and

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Speaker 1: a share price surgeres New arrangements mean the US or

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Speaker 1: UK could pull out of Orcust with a year's notice,

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Speaker 1: and the new deputy boss of the Reserve Bank has

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Speaker 1: a crack at economists. Welcome to Fear and Greed. Daily

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

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Speaker 1: is Tuesday, the thirteenth of August twenty twenty four. Are

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

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Speaker 2: Good morning, Michael.

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Speaker 1: Sewan got a bit of exciting news coming up a

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Speaker 1: little bit later on, But on with the news to

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Speaker 1: begin with the main story this morning. JB hi Fi

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Speaker 1: shareholders are happy today after the country's best regarded retailer

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Speaker 1: announced a big special dividend and at share price jumped

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Speaker 1: ten percent. But perhaps the underlying result isn't quite as

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Speaker 1: golden with reference to JB's signature color, which is more

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Speaker 1: supposed more yellow. Really wasn't such a bit of a stretch?

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Speaker 1: No no, no, no, no, no, like gold. We'll go with it.

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Speaker 1: Yes to all that that you've just said. JB hi

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Speaker 1: Fi was the first major retailer to report full year.

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Speaker 2: Results and it's better than expected result. Underlying profit for

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Speaker 2: the full year was four hundred and thirty nine million dollars,

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Speaker 2: pushed its share price sharply higher. Helping out was the

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Speaker 2: special eighty cent a share dividend, But the result was

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Speaker 2: down sixteen percent on last year and total revenue was lower,

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Speaker 2: so too, we're gross margins, demonstrating that it ain't all

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Speaker 2: good news for retailers thanks to cost of living pressures

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Speaker 2: and higher interest rates. This is the case of the

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Speaker 2: result being much better than expected, or at least a

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Speaker 2: bit better than expected, but those expectations had been beaten

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Speaker 2: down in recent months. JB is a really important result.

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Speaker 2: It isn't that big a company actually, at ranked sixty

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Speaker 2: five among the top two hundred, with a market cap

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Speaker 2: of just under eight billion dollars, but it is considered

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Speaker 2: the best run retailer in the country. So if it

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Speaker 2: can't make money, then what hope do the others have?

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Speaker 2: Or something like that. That's why the slide and revenue

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Speaker 2: and earnings is worth noting. The group will pay a

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Speaker 2: smaller final dividend, but a whopping special dividend. That's significant too,

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Speaker 2: because if JB thought it would be able to keep

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Speaker 2: up paying higher dividends into the future, then its final

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Speaker 2: dividend would not have gone backwards.

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Speaker 1: And JB hi FI also said Sean that it's branching

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Speaker 1: out beyond its business to consumer model.

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Speaker 2: Yeah, it's purchased something called e Ands Trading, which has

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Speaker 2: ten showrooms in Victoria and another in Camber. Paid almost

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Speaker 2: fifty million dollars for seventy five percent of the business

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Speaker 2: with an option to take out the remainder in twenty

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Speaker 2: twenty nine, and it gives the company entry into the

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Speaker 2: lucrative market for commercial builders. JB High Fire chief executive

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Speaker 2: Terry Smart sad it provided exposure to the premium home

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Speaker 2: appliance customers, the bathroom category, and large commercial construction customers,

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Speaker 2: as well as to boutique builders and architects. What's interesting

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Speaker 2: is that JB high Fhi's result boosted other discretionary retail

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Speaker 2: stocks like Harvey Norman and Super Retail. It's going to

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Speaker 2: be really interesting to see if those stocks can hold

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Speaker 2: onto the gains over the next few weeks when they report,

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Speaker 2: whether they're seeing their margins squeeze, whether they're seeing their

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Speaker 2: revenue go backwards. It's just that the expectations had been

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Speaker 2: beaten down so much that JB's result triggered the share

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Speaker 2: price surged, But you just want to know whether it

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Speaker 2: ain't just that golden underneath it all.

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Speaker 1: Now, all the headlines were really about JB hi Fi

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Speaker 1: in the last twenty four hours, But more broadly, how

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Speaker 1: did local markets perform?

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Speaker 2: Yesterday? The S and PASX two hundred finished up half

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Speaker 2: a percent to seven eight hundred and fourteen points, with

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Speaker 2: information technology and consumer discretionary stock doing best. The former

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Speaker 2: reflects what happened on Wall Street over the weekend. The

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Speaker 2: latter reflects the conference that JB high fire results instilled

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Speaker 2: in investors. Why I said Global was the best of

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Speaker 2: the large caps, ending up two and a half percent,

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Speaker 2: but it had plenty of friends. National Australia Bank gains

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Speaker 2: zed West Parmer's, Macquarie, Goodman Group, Aristocrat Leisure and QBE

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Speaker 2: sun Corp as well. They all closed up more than

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Speaker 2: one percent. Rio Tinto, FORESCU Metals and Area were among

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Speaker 2: the worst performers of the large caps. Beach and as

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Speaker 2: You share price fell twelve percent, worst on the day

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Speaker 2: after it downgraded reserves at a field in Victoria that

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Speaker 2: started up only two months ago. Tab Cork was best

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Speaker 2: on the day, up more than ten percent.

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Speaker 1: You've got an interview coming up after the show with

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Speaker 1: Nicola Powell from Domain which is reporting later in the week,

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Speaker 1: which isn't really relevant to the chat, but just that

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Speaker 1: I dropped that little d nugget in there for you.

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Speaker 2: Sean, thank him. Excellent. Yes, I talked to Nicolo all

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Speaker 2: about what's happening in the housing market, obviously, but what's

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Speaker 2: really interesting is they do a deep dive into the

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Speaker 2: different cities and the regions about how long it takes

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Speaker 2: to sell a property. And what's really interesting is the

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Speaker 2: time taking to sell a property is expanding, and by inference,

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Speaker 2: that suggests that the upcoming selling season, the upcoming spring

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Speaker 2: selling season may indeed be a better one for buyers.

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Speaker 2: Last couple have been great for sellers, not so much buyers.

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Speaker 2: Perhaps that's changing. We talked to Nicolo about that.

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Speaker 1: Yeah, it is a really interesting conversation and Nicola is

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Speaker 1: great to talk to. She is coming up after the show,

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Speaker 1: So stick around international markets. What's happening.

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Speaker 2: Oil was high yesterday, following last week's first weekly gain

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Speaker 2: since early July. The market really is still waiting, though,

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Speaker 2: for Iran's response to last month's assassination of hamas leader

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Speaker 2: in Tehran. Gold steady just under twenty four to forty

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Speaker 2: US dollars announce on alls up a bit training just

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Speaker 2: above one hundred US dollars a ton, and the Ausi

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Speaker 2: dollar is buying just under sixty six US since.

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Speaker 1: Sean got a bit of exciting news to announce.

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Speaker 2: Here, very exciting, yes, go on, go on.

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Speaker 1: We are thrilled to announce, really really hyping this up here,

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Speaker 1: that our Mea mugs have arrived.

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Speaker 2: We've been promising what for four years.

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Speaker 1: Yeah, a very very long time, and they have finally arrived.

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Speaker 1: The Meya Mea. The Meya is the most enthusiastic advocate.

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Speaker 1: It is a terrible acronym that we came up with

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Speaker 1: one day on the show, just on the fly, and

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Speaker 1: somehow it's stuck. The Mea the most enthusiastic advocate. It

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Speaker 1: is a limited edition, very rare collectible mug with fear

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Speaker 1: and Greed emblazoned upon it. And the best part is

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Speaker 1: Sean that we are giving them away to listeners who

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Speaker 1: are the most enthusiastic advocates of fear and greed. So

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Speaker 1: if you are telling your colleagues about us, then let

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Speaker 1: us know. Post about Fear and Greed on LinkedIn or

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Speaker 1: on Instagram or Facebook, make sure to tag us. We

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Speaker 1: are on the lookout for me as for most enthusiastic

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Speaker 1: advocates to receive the limited edition collectible mea mug, what

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Speaker 1: a prize.

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Speaker 2: Shop People are rushing to their phones right now. I'm sure.

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Speaker 2: In fact, we do have a few that we need

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Speaker 2: to already send out because there have been people over

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Speaker 2: the years who have been very good to us. And

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Speaker 2: one of those people, I've got to say is eychief

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Speaker 2: economist Schuelle Murphy. She's been on the show a bit.

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Speaker 2: She's always she's been a fan for a long time,

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Speaker 2: and she's always recommending us to people. So I think, well,

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Speaker 2: might be well one of the very first mail outs.

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Speaker 2: I think you are.

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Speaker 1: So you are so going to go rogue with this

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Speaker 1: and just send them out to everyone. It's going to

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Speaker 1: be the new currency.

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Speaker 2: Another woman who's been very big fan, my mother. Absolutely

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Speaker 2: she gets two something like that.

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Speaker 1: These are getting increasingly rare and increasingly collectible because you're

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Speaker 1: just going to just pass them out to everyone. Anyway,

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Speaker 1: post online, LinkedIn, Facebook, Fear and Greed send us an

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Speaker 1: email via Fearangreed dot com dot au. Let us know

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Speaker 1: what you're doing to spread the word about fear and greed,

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Speaker 1: and you may be the recipient of the limited edition

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Speaker 1: Me and Marg Let's get back on track, Seawan. We'll

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

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Speaker 1: day's business news.

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Speaker 2: Sewan.

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Speaker 1: The US or the UK could pull out of the

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Speaker 1: Orcus Submarine Deal with just a year's notice if if

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Speaker 1: either nation decides the pact weakens their own nuclear submarine programs.

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Speaker 1: This is according to two new documents that have just

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Speaker 1: been revealed.

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Speaker 2: An updated Orchist Agreement and a Political Understanding between the countries,

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Speaker 2: tabled in Parliament yesterday establish a fifty year legal framework

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Speaker 2: for the transfer of nuclear materials and equipment to Australia.

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Speaker 2: The understanding says that the US and UK should not

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Speaker 2: unreasonably withhold nuclear information or equipment from Australia. This is

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Speaker 2: according to report in The Australian, but it includes an

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Speaker 2: escape clause for either country if they decide the Orchest

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Speaker 2: deal adversely affects their ability to meet their respective military

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Speaker 2: requirements and to not degrade their respective naval nuclear propulsion programs.

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Speaker 2: It's an out. The new agreement and additional political commitments

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Speaker 2: were revealed by Joe Biden last Thursday in a letter

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Speaker 2: to the US Congress, but their contents were only disclosed

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Speaker 2: yesterday morning when they were tabled here now. On Friday,

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Speaker 2: the Prime Minister Anthony Alberanezi downplayed any changes, but there

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Speaker 2: is no doubt when you read it that the US

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Speaker 2: and UK can pull out within a year if they

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Speaker 2: want to.

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Speaker 1: Has delayed green lighting the merger of Chemist Warehouse and

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Speaker 1: Sigma Healthcare needs more time to decide on the impact

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Speaker 1: the deal would have on smaller pharmacies.

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Speaker 2: It's the biggest merger deal of the year, worth almost

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Speaker 2: nine billion dollars. It would create a listed pharmaceutical retailing

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Speaker 2: and wholesaling giant. The Competition watchdog had originally expected to

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Speaker 2: decide whether to approve the deal next month. Now it's

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Speaker 2: already raised five orange flags and a preliminary assessment of

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Speaker 2: the deal if it goes ahead. The new company makes

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Speaker 2: Chemist Warehouse, so it wholesales and retails drugs. So it

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Speaker 2: would sell as a wholesaler to retailers, obviously to its

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Speaker 2: own shops, but also to competitors to its own shops,

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Speaker 2: and that's really what has worried the hable see. According

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Speaker 2: to media reports, the decision to delay the decision is

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Speaker 2: due to difficulty in assessing the impact of the deal

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Speaker 2: on a network of pharmacies by suburb.

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Speaker 1: The relatively new Deputy Governor of the Reserve Bank, Andrew Hauser,

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Speaker 1: has labeled the economic commentators false prophets whose poor predictions

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Speaker 1: could make people worse off. What do you make of this?

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Speaker 2: Show people in glasshouses? Perhaps the Central Bank is definitely

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Speaker 2: better known for being conservative. It's only been a few

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Speaker 2: months that the governor has even been giving press conferences.

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Speaker 2: Now mister House has come out yesterday was talking to

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Speaker 2: an Economic Society of Australia event, and he said a

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Speaker 2: vibrant public economic debate with diverse views is healthy, fair enough.

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Speaker 2: What's less desirable is the extraordinary certainty with which individual

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Speaker 2: views about the outlook for the economy in the path

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Speaker 2: of monetary policy can sometimes be expressed. He doesn't like

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Speaker 2: people's opinion, I think he's saying there. He went on

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Speaker 2: to say economic commentators had created and I quote, a

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Speaker 2: world of winners and losers, gurus and Charlatan's geniuses and buffoons.

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Speaker 2: Those seeing things differently are castigated as incompetent bias or

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Speaker 2: on the make and changers in view are presented as

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Speaker 2: disastrous or humiliating failures into growth, he said. Commentators claiming

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Speaker 2: supreme confidence or certainty over what is an intrinsically uncertain

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Speaker 2: and ambiguous outlook is a dangerous game and at worst

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Speaker 2: risks driving poor analysis and decision making that good harm

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Speaker 2: the welfare of all Australians. Go get them, Housi.

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Speaker 1: It didn't miss did he do you reckon? He just

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Speaker 1: do you reckon? He's just walking in and goes, you

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Speaker 1: know what, I'm going to go off script. I'm going

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Speaker 1: to liven things up. Let's see if we can get

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Speaker 1: a rise out of these guys. And that's what he

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Speaker 1: came up with. That is a fantastic, fantastic take.

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Speaker 2: I love it.

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Speaker 1: Bit of theater. Now. Meanwhile, Federal Parliament shown is back

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Speaker 1: and whether the Albaneze government is helping or hindering rate

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Speaker 1: cuts is going to play out in the run up

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Speaker 1: to the next election.

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Speaker 2: The election must be held by May next year, and

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Speaker 2: yesterday Prime Minister Anthony Albanize he maintained that Labor is

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Speaker 2: helping the Reserve Bank in its fight against price pressures

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Speaker 2: He added that inflation has harm since labor came into offers.

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Speaker 2: He also defended his government's cost of living plans while

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Speaker 2: criticizing the coalition's own economic credentials. Treasure Jim Chalmers Well

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Speaker 2: He accused Opposition treasury spokesperson Angus Taylor of desperately wanting

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Speaker 2: inflation and interest rates to push higher for his own

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Speaker 2: political advantage. I reckon, We're going to hear a lot

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Speaker 2: about this stuff in the next few months, Michael, I

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Speaker 2: suspect you.

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Speaker 1: Might be right, Sean. Now, rail hauliage group Arizon has

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Speaker 1: announced to twenty five percent jump in annual on that

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Speaker 1: profit and will spend one hundred and fifty million dollars

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Speaker 1: buying back shares.

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Speaker 2: But Horizon didn't meet its growth target for the network

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Speaker 2: and coal businesses, and the result was below expectations. As

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Speaker 2: a result, at share price tumbled nine percent. All the

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Speaker 2: coal business did pretty well, the consumer goods transport business

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Speaker 2: isn't as successful, with chief executive Andrew Hardy saying the

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Speaker 2: containerized freight market is softer than industry expected. He blamed

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Speaker 2: inflation and high interest rates. Horizon has primarily been a

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Speaker 2: coal houliage company, but is pushing into soft goods, particularly

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Speaker 2: long the East Coast. The share price is off fourteen

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Speaker 2: percent this year.

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Speaker 1: Trade unions are making inroads into the big miners, with

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Speaker 1: BHP being forced to the negotiating table and RIO tinto

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Speaker 1: under a little bit of pressure to do the same.

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Speaker 2: Yeah, so BHP will need to negotiate under recent industrial

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Speaker 2: relations changes introduced by Labor, despite assurances that the laws

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Speaker 2: wouldn't affect the sector. According to a report in the

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Speaker 2: fin Review, the move has already drawn the eye of

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Speaker 2: the Minerals Council, whose chief executive ten Yure Constable said

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Speaker 2: it was the start of a union power grab. Now.

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Speaker 2: Before the changes were introduced, unions would have had to

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Speaker 2: establish that they represented most workers before BHP or RIO

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Speaker 2: were forced to negotiate with them. Brad Gandhi, the Australian

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Speaker 2: Workers Union state secretaries and wages and conditions for iron

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Speaker 2: ore miners are not as good as many people thought.

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Speaker 2: Now Government Agency Jobs and Skills Australia estimates the medium

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Speaker 2: wage in the mining industry, not iron or but mining

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Speaker 2: industry is twenty four hundred and fifty two dollars per week.

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Speaker 2: It's about sixty percent higher than the averall median across

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Speaker 2: the economy.

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Speaker 1: Okay, turning to international news. Now, foreign investors pulled a

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Speaker 1: record amount of money from China last quarter, likely reflecting

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Speaker 1: deep pessimism about the world's second largest economy.

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Speaker 2: So, China's direct investment liabilities in its Balance of payments,

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Speaker 2: that's the official title, that's where we're getting the figure

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Speaker 2: from dropped by almost fifteen billion dollars in the three

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Speaker 2: months to the end of June, marking only the second

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Speaker 2: time this figure has turned negative. It was actually down

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Speaker 2: about five billion dollars for the previous three months. If

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Speaker 2: it continues for the year, it would be the first

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Speaker 2: annual net outflow since at least nineteen ninety when data

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Speaker 2: began being collected. We've heard lots of stories about foreign

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Speaker 2: investors pulling out of China and putting it into other

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Speaker 2: regional assets ie Commonwealth Bank shares. There's been talked that's

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Speaker 2: why Commonwealth Bank has gone so hard overseas. People not

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Speaker 2: wanting to invest in China wanting to invest in Commonwealth Bank.

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Speaker 2: These numbers we're seeing yesterday is kind of the first

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Speaker 2: half of that story. The fore comes despite Beijing's growing

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Speaker 2: efforts to attract and retain foreign investment. Now, According to Bloomberg,

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Speaker 2: the government wants to show it remains open and attractive

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Speaker 2: to foreign businesses in the hope that companies will bring

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Speaker 2: advanced technologies and resist pressure from the US and elsewhere

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Speaker 2: to decouple from China.

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Speaker 1: The US is upping its presence in the Middle East

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Speaker 1: ahead of an anticipated Iranian attack on Israel, and is

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Speaker 1: sending a guided missile submarine to the area.

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Speaker 2: According to a readout from a core between US Defense

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Speaker 2: Secretary Lloyd Austin and Israeli Minister Yuav Gland, Austin accelerated

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Speaker 2: the timeline for the arrival of the USS Abraham Lincoln,

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Speaker 2: an aircraft carrier with F thirty five that was meant

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Speaker 2: to replace the outgoing USS Theodore Roosevelt. However, both ships

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Speaker 2: will now be there together. Austin also discussed Israel's efforts

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Speaker 2: to avoid civilian harm after an Israeli attack on a

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Speaker 2: school killed at least eighty people. Israel said the school

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Speaker 2: was being used as a mass command and control center.

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Speaker 1: Last one, John, sorry, a little bit lighter here to

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Speaker 1: finish on and if you ken for your thoughts on it.

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Speaker 1: The one day work flight where you get up early

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Speaker 1: in the morning fly to a destination and then return

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Speaker 1: home late at night is out of fashion at SAMs,

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Speaker 1: with companies dumping the practice post COVID.

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Speaker 2: Yeah, so the new normal and corporate travel has changed.

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Speaker 2: According to the boss of the Global Industry trade body,

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Speaker 2: the one day flight trip for work went out the

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Speaker 2: door at the beginning of COVID and hasn't really come back.

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Speaker 2: According to Suzanne Dafang, head of the Global Business Travel Association,

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Speaker 2: delays and canceled flights are partly responsible for fewer trips

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Speaker 2: since the pandemic, with fifty percent of respondence to a

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Speaker 2: twenty twenty three survey saying concerns about disruptions or an

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Speaker 2: unpleasant experience have somewhat will greatly reduced their willingness to

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Speaker 2: travel for work now. According to The Financial Times, environmental

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Speaker 2: and sustainable factors have also played a part, as corporates

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Speaker 2: are trying to limit flying, packing more meetings into fewer trips,

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Speaker 2: or only taking a plane for long journey. So there's

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Speaker 2: a bunch of companies out there like PwC, y Marsh mcclennan.

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Speaker 2: They've all outlined plans to cut missions by reducing air

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Speaker 2: travel for example. Also, the thing adds a bit of

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Speaker 2: human element. You know, day trips are really hard no

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Speaker 2: matter what, even on the best days, they are hard.

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Speaker 2: Very early starts in late returns. Got an agree more, Sesanne.

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Speaker 1: So this is actually when I first heard this story,

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Speaker 1: I thought it was essentially saying that, hey, we're just

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Speaker 1: going to ease it out kind of. You can head

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Speaker 1: down the night before and stay the night or stay

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Speaker 1: a couple of nights. But really it's actually an overall

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Speaker 1: cut back in corporate travel in general.

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Speaker 2: So it's interesting. Corporate travel numbers are definitely lower, and

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Speaker 2: they don't expect the number of corporate travels travelers to

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Speaker 2: catch up to pre COVID numbers until late this decade,

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Speaker 2: like twenty eight twenty nine. However, the cost of corporate

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Speaker 2: travel has risen significantly, so it's not necessarily less profitable

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Speaker 2: for the airlights.

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Speaker 1: Okay, interesting story up next sean as the Fear and

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Speaker 1: Greed Daily Interview. Your guest today Nicola P from Domain, all.

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Speaker 2: About the upcoming spring selling season and just the fact

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Speaker 2: that it's just taking longer for sellers to sell, which

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Speaker 2: means it might actually be a better buyers market this season.

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Speaker 1: It is coming up next in the Fear and Greed

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

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Speaker 1: dot au. Whihich is where you can sign up for

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Speaker 1: our Fear and Greed free weekly news letter out tomorrow,

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Speaker 1: and keep an eye on your playlist today at midday

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Speaker 1: for the next bonus episode of Ask Fear and Greed,

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Speaker 1: where we tackle listener questions and you can also submit

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Speaker 1: your questions if you'd like us to get to that one.

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Speaker 2: Thank you, Sean, Thank you Michael.

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Speaker 1: It's Tuesday, the thirteenth of August twenty twenty four. Make

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

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

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