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Speaker 1: Businesses are feeling the brunts of the economic slowdown, with

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Speaker 1: trading conditions getting tougher. The federal Treasury is optimistic that

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Speaker 1: inflation is coming back under control. And how McDonald's and

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Speaker 1: other fast food rivals stared down the naysayers and went

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Speaker 1: from strength to strength. 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 fourteenth of May twenty twenty four. I'm

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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: Now Sean, immediately after the show, you have an interview

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Speaker 1: coming up today with Andrew Lampertang, who is the managing

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Speaker 1: director of Management Consulting for publicer Sapient Sure did.

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Speaker 2: Andrew and I talked about the banks and the relationship

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Speaker 2: with consumers, and they've done a survey recently about how

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Speaker 2: consumers think about banks, and we talked about stuff like

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Speaker 2: branches and cash. It was just really interesting what the

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Speaker 2: survey turned up about the relationship between in customers and banks.

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Speaker 2: So we don't kind of see them as this big

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Speaker 2: macro organization. It's very much about an individual relationship. Discussion

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Speaker 2: fascinating from Andrew.

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Speaker 1: Yeah, and whether the banks have even recovered essentially from

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Speaker 1: the Royal Commission, which I thought was interesting on what

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Speaker 1: we expect from the banks, and as a customer of banks,

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Speaker 1: I found this really interesting. So it's coming up after

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Speaker 1: the show. It is well worth listening. It's also worth

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Speaker 1: heading on to Fear and Greed dot com today you

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Speaker 1: and signing up for our newsletter. It comes out tomorrow, Sean,

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Speaker 1: and basically it is your thoughts, your inner thoughts, which.

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Speaker 3: Sounds a bit scary, the thoughts not quite it is,

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Speaker 3: I mean obviously tomorrow well, I mean I'll write a

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Speaker 3: lot about the budget, because tonight it's a big night

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Speaker 3: for the federal budget.

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Speaker 2: But there'll be other things too, just my take on

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Speaker 2: a number of issues which well, at this early stage

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Speaker 2: twenty four hours away, I can't quite tell you what

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Speaker 2: those issues are, but that will be very relevant, I'm sure.

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Speaker 1: If you want exclusive and unrivaled access to Sean's in

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Speaker 1: a thought, head along Fear and Greed dot com dot

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Speaker 1: a you and pop your email address in it and

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Speaker 1: we'll get a mid morning tomorrow if you dare all

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Speaker 1: right on with the show shown. The main story this morning,

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Speaker 1: businesses are finding trading conditions a bit tougher and are

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Speaker 1: slowing down new hires and seeing a drop in sales

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Speaker 1: orders in coming months.

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Speaker 2: The National Australian Bank Monthly Business Survey says business conditions

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Speaker 2: are now back to long run averages and while business

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Speaker 2: confidence is steady, it's still below the long term average.

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Speaker 2: National Australian Bank Chief economist Alan Oster said the April

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Speaker 2: survey marks a milestone with conditions no longer better than average,

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Speaker 2: demonstrating how much the economy is slowing. While conditions and

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Speaker 2: the finance, business and property, transport and recreational services remain

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Speaker 2: pretty good, it isn't the case in retail. It's the

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Speaker 2: real week point for businesses. Mister Rostas said, it's worrying

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Speaker 2: for the economic outlook that forward orders have fallen, though

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Speaker 2: businesses are still investing. That's the good news. The survey

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Speaker 2: also shows some positive signs in terms of inflation easing.

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Speaker 2: The NAP survey gives a great book at different segments

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Speaker 2: of the economy and the overall take is that growth

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Speaker 2: is certainly slowing, as is inflation, so.

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Speaker 1: That's the business part of the economy. We also got

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Speaker 1: a pretty good look yesterday at the consumer side with

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Speaker 1: new Commonwealth Bank figures, highlighting the growing divide between homeowners

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Speaker 1: and renters in particular.

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Speaker 2: Yes, so the monthly Combank Household Spending Insights Index fell

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Speaker 2: last month, with spending growth over the past year just

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Speaker 2: two point six percent.

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Speaker 1: I'm not laughing. I'm not laughing at you, short, I'm

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Speaker 1: laughing at the Combank Household Spending Insights Index. I understand

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Speaker 1: what it is. It sounds, it is crystal clear from

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Speaker 1: the name what it is. But can't you Combank call

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Speaker 1: it like Combank spendethon or something like that really cuts through?

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Speaker 2: So the Combank Spendethon uses real time data from car

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Speaker 2: transactions across the bank, so it's more up to date

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Speaker 2: then let's say Strain Bureau Statistics release. It's fascinating, it is.

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Speaker 2: When you talk to Kombank economist Gareth ed and Stephen

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Speaker 2: haw Marrick, they have at their fingertips this data about

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Speaker 2: what's happening in the real economy. And that's kind of

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Speaker 2: what makes this survey so interesting. It says, while spending

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Speaker 2: on essentials like education, utilities, and motor vehicles has risen,

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Speaker 2: consumers are pulling back on hospitality, food and beverage, and recreation.

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Speaker 2: But where The real disparity kicks in is between renters

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Speaker 2: we're spending growth is up just one point three percent

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Speaker 2: and homeowners who spent six point three percent more. That's

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Speaker 2: a massive difference between the two. Victoria is one of

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Speaker 2: the worst performing states over the past year or so,

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Speaker 2: while the greatest strength is in Tasmania, South Australia and

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Speaker 2: New South Wales.

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Speaker 1: Sure, and I can hear the excitement in your voice,

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Speaker 1: and I suspect it is, in fact just excitement, like

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Speaker 1: early excitement for the budget tonight. Correct titally it's pre budget. Yeah,

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Speaker 1: you just got the pre budget jitters exciting. Yeah. Local markets,

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Speaker 1: how did they perform yesterday? Do they have the pre

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Speaker 1: budget gitters as well? Yeah?

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Speaker 2: Absolutely, nothing happened like the number they closed up one

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Speaker 2: point to seven, seven hundred and fifty points. It's not

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Speaker 2: fair to say nothing happened, but aating was in a

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Speaker 2: very narrow range ahead of tonight. Consumer discretionary stocks did best,

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Speaker 2: while consumer staples also outperformed. The energy and techtogs were

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Speaker 2: among the worst performers among the large CAFs. The Comwealth Bank,

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Speaker 2: West Farmers, Woolies and Weistea Global Or finished up one percent.

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Speaker 2: Woodside and Rare both closed down one percent. Alien Zed

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Speaker 2: and Macquarie Group both went extravidend, falling three percent and

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Speaker 2: one point six percent, respectively. In corporate news, construction group

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Speaker 2: Fletcher Building was the biggest laggard after cutting earnings guidance

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Speaker 2: for fiscal twenty twenty four due to a notable slowdown

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Speaker 2: in house sales in New Zealand and a weaker Australian

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Speaker 2: property market. It was also hit by a court judgment

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Speaker 2: of and I quote, no substantive findings in its claim

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Speaker 2: against subcontractor works that allegedly caused significant fire related damages.

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Speaker 2: That's a loss for Fletcher in this case. Fletcher's share

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Speaker 2: price closed down nearly eleven percent yesterday. Another one I

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Speaker 2: should just mention. We talked about them last week. Avz

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Speaker 2: Minerals It delisted from the AX yesterday, two years after

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Speaker 2: its share price was suspended. Of course, company has been

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Speaker 2: in dispute for control of the world's largest hard rock

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Speaker 2: with him deposit in Africa. It had more than twenty

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Speaker 2: one thousand shareholders paper wealth of two point eight billion dollars,

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Speaker 2: probably not getting any of that back.

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Speaker 1: And what's happening in international markets, well, oil prices have

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Speaker 1: fallen again amid signs of weak fuel demand.

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Speaker 2: In the US, Sprint crudes training under eighty three US

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Speaker 2: dollars a barrel, its lowest level than two months, golds flat,

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Speaker 2: with an ounce of the precious metal fetching twenty three

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Speaker 2: fifty US dollars, Bitcoin's worth around sixty one thousand US

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Speaker 2: dollars a unit, and the Aussie dollars buying around at

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Speaker 2: sixty six US cents.

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Speaker 1: All right, we'll be back in a moment with the

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Speaker 1: rest of the day's business news. Sean Tonight's federal budget

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Speaker 1: is likely to forecast inflation falling back to within the

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Speaker 1: Reserve Bank's target range by December this year, which would

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Speaker 1: be good news in terms of interest rates and the

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Speaker 1: cost of living crisis.

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Speaker 2: The reason we have interest rates at twelve year highs

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Speaker 2: is to get inflation back control, and Federal Treasury's forecast

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Speaker 2: will show inflation dropping to two point seventy five percent

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Speaker 2: by December. That's December this year. It will stay at

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Speaker 2: that level into next year and eventually drop to two

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Speaker 2: and a half cent by the end of twenty twenty five.

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Speaker 2: Therese just forecasts, but it does demonstrate that Treasury has

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Speaker 2: confidence inflation is getting back in control, probably more confidence

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Speaker 2: than what the Reserve Bank has, or at least based

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Speaker 2: on the numbers, Treasury is more confident about it. Of course,

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Speaker 2: when inflation comes back into control, the Reserve Bank's likely

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Speaker 2: to lower the official cash rate, sending other rates on mortgages,

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Speaker 2: personal loans, credit cards, et cetera, or lower. Treasury will

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Speaker 2: also forecasts at the unemployment rate will rise from three

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Speaker 2: point eight percent today to around four and a half

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Speaker 2: percent over the next twelve months, but Finance Minister Katie

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Speaker 2: Gallagher said the job isn't done yet and the budget

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Speaker 2: will alleviate cost of living pressures.

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Speaker 1: Now. We'll have all of the news on the budget

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Speaker 1: tomorrow morning, including a special interview with our resident economist,

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Speaker 1: Stephen Cocoulis. He is one very excited human right now.

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Speaker 2: He's jity. He's more gittery than anyone.

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Speaker 1: Oh yeah, between the two of you, you just kind

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Speaker 1: of due to bugs. Yeah, oh, well played. Sean serious

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Speaker 1: story of this one. Videos showing the stabbing of a

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Speaker 1: Sydney bishop had been allowed back on social media site

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Speaker 1: x globally after the Federal court refused to continue orders

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Speaker 1: barring them from view.

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Speaker 2: The decision yesterday morning is a blow for the government,

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Speaker 2: which had attacked EX owner Elon Musk over his free

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Speaker 2: speech stance towards the videos. The e Safety Commissioner had

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Speaker 2: persuaded the court to issue an emergency ruling last month

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Speaker 2: ordering the videos to be hidden around the world, and

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Speaker 2: a hearing that was at too late notice for Ex's

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Speaker 2: lawyers to properly engage with now On Friday last week,

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Speaker 2: Ex's lawyers argued that the videos were not sufficiently graphic

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Speaker 2: to ban globally, that X had already taken steps to

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Speaker 2: bock them for Australian users, and that the Commission had

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Speaker 2: not followed legal processes in demanding X hide the videos

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Speaker 2: in the first place. The videos were also widely available

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Speaker 2: else where, X's lawyers noted, and then the decision yesterday

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Speaker 2: to allow those videos back.

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Speaker 1: On X sewn casino group Star Entertainment was leaderless and

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Speaker 1: susceptible to criminal exploitation as it lagged more than a

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Speaker 1: year behind in remediation efforts. The Bell II inquiry heard yesterday.

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Speaker 2: Council assisting the inquiry, Casper Condy, said a three point

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Speaker 2: two million dollar fraud committed against Star last year involving

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Speaker 2: malfunctioning cash machines, so the company was still vulnerable to

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Speaker 2: criminal activities as the ranks of its senior executive team

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Speaker 2: remained depleted. Mister Condy, in closing oral submission, said the fraud,

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Speaker 2: which allowed winning gambling tickets to be reused in ticket

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Speaker 2: in cash out machines, was committed by eighteen people who

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Speaker 2: undertook eighteen hundred fraudulent transactions. The inquiry, the second by

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Speaker 2: Adam lac into whether the Star is suitable to retain

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Speaker 2: its Sydney casino license, heard the fraud was a failure

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Speaker 2: of internal controls at the company. According to a report

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Speaker 2: in The Australian. Mister Condy said it may not be

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Speaker 2: possible to decide a time when Star Entertainment will be

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Speaker 2: suitable to retain its Sydney caxino license, referring to a

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Speaker 2: lost fourteen months in the company's reform efforts since mister

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Speaker 2: Bell's first inquiring.

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Speaker 1: Property giant Lendlease said it has been hit with a

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Speaker 1: one hundred and twelve million dollar tax bill after a

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Speaker 1: whistleblower alleged that it's double dipping on tax benefits for

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Speaker 1: its retirement living business.

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Speaker 2: So Lendley said it had been issued with a statement

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Speaker 2: of a position and an amended tax assessment relating to

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Speaker 2: an audit of the partial sale of the retirement living

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Speaker 2: business back in the twenty eighteen financial year. Now the

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Speaker 2: particular statement relates to the sale of twenty five percent

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Speaker 2: of a retirement living trust got about four hundred and

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Speaker 2: fifty million dollars. It sold it to a Dutch pension

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Speaker 2: fund called APG. Lendley's yesterday said's confidence of its position

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Speaker 2: and will dispute the amended assessment, adding that further sale

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Speaker 2: with the assessments about the twenty five percent, it then

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Speaker 2: went and sold another fifty percent that had hasn't attracted

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Speaker 2: amended assessments, and Lendle said that is significant and it

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Speaker 2: believes that its position is fine. This has been an

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Speaker 2: ongoing issue for the group, with former external tax advisor

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Speaker 2: turned whistleblower Anthony Watson alleging Lenlease is still under reporting

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Speaker 2: potential tax liabilities. Obviously that hasn't been proven. If that

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Speaker 2: is the case, there's a potential for the ATO to

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Speaker 2: impose pretty heavy penalties on len Lease as well. The

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Speaker 2: upshot Lenlease's share price closed down three and a half

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Speaker 2: percent yesterday.

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Speaker 1: We talked a bit about this one yesterday, Sean, and

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Speaker 1: it continues to develop. Arn Media is scrambling to revive

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Speaker 1: its attempt to buy rival Southern Cross Ostereo after its partner,

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Speaker 1: private equity group Anchorage Capital, pulled out of the deal.

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Speaker 2: Aarn yesterday said an indicative proposal was on the way

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Speaker 2: for the company to buy the same radio stations and

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Speaker 2: brands from Southern Cross as under the previous deal, and

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Speaker 2: also take digital audio assets in exchange for shares. Now,

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Speaker 2: under that original deal would have taken Southern Cross as

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Speaker 2: Kiss and Triple and radio stations along with dozens of

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Speaker 2: regional stations. Anchorage Capital partners would have received a smaller

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Speaker 2: number of stations and the Southern Cross regional TV networks

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Speaker 2: that fell over over the weekend. This is a new

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Speaker 2: deal from arn Ira and chair Haemish mccleannon said a

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Speaker 2: deal would deliver a business of scale necessary to compete

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Speaker 2: against global platforms Southern Cross. I'm not so sure about

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Speaker 2: that idea, because they said it means shareholders will end

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Speaker 2: up with interest in two competing media businesses, one of

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Speaker 2: which will be well and truly sab scale. It would

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Speaker 2: also reduce SCA's exposure to digital media.

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Speaker 1: And the corporate regulator SEAN is investigating A and Z

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Speaker 1: over its execution of a long term Australian government bond

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Speaker 1: issue last year.

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Speaker 2: Slightly pointing headed this one very relevant. Michael slightly pointed

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Speaker 2: headed The Big four Banks explained that it had been

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Speaker 2: appointed by the Australian Office of Financial Management to act

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Speaker 2: as a risk manager in relation to the issuance of

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Speaker 2: ten year treasury bonds in twenty two three. That particular

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Speaker 2: trade is now subject to a formal investigation with the

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Speaker 2: Austraining Securities and Investments Commission investigating suspected contraventions of the

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Speaker 2: ASSE and Corporations Act. AAN Zed said it's fully cooperating

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Speaker 2: with ACIK.

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Speaker 1: I know it's very important, sure, but you know how

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Speaker 1: I like to double in marketing and kind of suggest

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Speaker 1: better ways to present things. Yes, yes, let's don't be

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Speaker 1: apprehensive about this bond. Do you think more people would

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Speaker 1: be interested in them and more excited about it? I

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Speaker 1: know it's important and very worthy. If they are instead

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Speaker 1: called James.

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Speaker 2: Bonds, maybe what you could do right is James bond

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Speaker 2: would be the government bond, but then you have a

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Speaker 2: corporate bond, so like you could have A six. So

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Speaker 2: government bond is kind of the main secure, risk free

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Speaker 2: one James bond the games. But then you have the

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Speaker 2: corporate bond. Yeah, I have absolutely know what sort of

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Speaker 2: bond that would be.

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Speaker 1: Well, what one would your class as an Alan bond?

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Speaker 2: See, that would be the high risk, high yielding once

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Speaker 2: down is junk bond. Bond got to bed and so

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Speaker 2: you've got James bond at one level, Alan bond at

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Speaker 2: the other. Sorry Alan bond, but you know, and then

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Speaker 2: in the midst you'd have to have else know, any bonds.

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Speaker 1: Out there Bond Street because bond streets are respected streets,

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Speaker 1: isn't it. I mean it's on the Monopoly bond. It's

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Speaker 1: one of the green squares on Monopoly, so I always

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Speaker 1: consider that to be that's.

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Speaker 2: Pretty Maybe Bond Street would actually be the government bond,

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Speaker 2: and then the investment grade bond would be the James bond.

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Speaker 2: Like you're pretty sure everything will be okay, but not

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Speaker 2: totally I mean basing that last poor ending.

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Speaker 1: Oh spoiler, this has got legs. I mean I know

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Speaker 1: that I'd don't want to trivialize things here, but of

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Speaker 1: course not. But this has legs. This is seriously promising yeah, really,

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Speaker 1: thank you for your confidence in me, Sean. Shall we

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Speaker 1: move on to international news?

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Speaker 2: Yes, I think so.

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Speaker 1: President Joe Biden will quadruple tariffs on Chinese electric vehicles

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Speaker 1: and sharply increase levies for other key industries this week,

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Speaker 1: framing the measures as a defense of American workers in

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Speaker 1: an election year. This feels a little bit kind of

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Speaker 1: Trump esque, doesn't it it is.

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Speaker 2: I mean, obviously this is happening in an election year.

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Speaker 2: As you just mentioned, it probably doesn't have a huge

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Speaker 2: effect on the Chinese economy as such, So Biden will

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Speaker 2: hiker add tariffs in targeted sectors after nearly two years

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Speaker 2: of review. According to Bloomberg, the tattle tariff on Chinese evs,

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Speaker 2: for example, will rise to one hundred and two point

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Speaker 2: five from twenty seven and a half percent. Other tariffs

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Speaker 2: will double or triple. The administration has spent recent weeks

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Speaker 2: finalizing the measures, including which items to hit, which to avoid.

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Speaker 2: Some are actually inputs in to American products, so they're needed,

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Speaker 2: so they're not going to be hit with tariffs. For example,

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Speaker 2: items used in the US solar industry will be excluded.

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Speaker 2: Biden's planned for more tariffs is probably mostly symbolic as

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Speaker 2: China doesn't rely on US consumers in many of those

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Speaker 2: targeted sectors, even Chinese evs, they were sort of locked

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Speaker 2: out of the US market years ago by the existing

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Speaker 2: tariffs that were put in play, or by the tariffs

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Speaker 2: that were put in place the twenty seven percent one.

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Speaker 2: But it is certainly symbolic because Biden wants to look

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Speaker 2: tough against China in the election.

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Speaker 1: Yet finally, Sean I mentioned this one at the top

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Speaker 1: of the show. This month marks the twentieth anniversary of

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Speaker 1: the movie Super Sized Me. Have you seen that one,

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Speaker 1: wouldn't she? Yeah? Yeah, yeah, where director and star Morgan

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Speaker 1: Spurlock he ate only McDonald's for a month to demonstrate

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Speaker 1: the ill effects that the fast food chain had on people.

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Speaker 1: The movie was a big hit. It grows to twenty

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Speaker 1: two million dollars on a sixty five thousand dollars budget.

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Speaker 1: That's not a bad return, but it did little little

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Speaker 1: to stop the growth of McDonald's and fast food more

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Speaker 1: generally across the USA.

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Speaker 2: Yeah, so the film itself worked somewhat, with McDonald's discontinuing

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Speaker 2: its supersized menu six weeks after it was released, and

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Speaker 2: awareness of the dangers are too much fast food were

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Speaker 2: certainly raised, but twenty years later, McDonald's is much bigger

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Speaker 2: than ever before, forty two thousand locations around the world.

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Speaker 2: In fact, in the US are about forty fast food

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Speaker 2: chains with more than five hundred locations each. According to

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Speaker 2: report in The New York Times, fast food is now

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Speaker 2: the second largest private employment sector in the country. In

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Speaker 2: the US, after hospitals and thirty six percent of Americans,

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Speaker 2: about eighty four million people eat fast food on any

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Speaker 2: given day. The three major appeals of fast food are

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Speaker 2: the same as they've always been, cheap, convenient, and taste.

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Speaker 2: The share price of McDonald's is up nearly one thousand

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Speaker 2: percent since supersized Me came out. That's twice the return

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Speaker 2: of the broader s and p five hundred. In the end,

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Speaker 2: in that battle, McDonald's has one, hands down.

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Speaker 1: I had no idea that fast food was the second

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Speaker 1: largest private employment sector but behind hospitals. Fascinating.

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Speaker 2: Yeah, well, I mean, the hospital system in the US

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Speaker 2: is private, and so the hospital system here is one

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Speaker 2: of the largest employees in the country, So same deal.

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Speaker 1: Goodness. I learn a lot on this show that, like

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Speaker 1: I'm trying to redeem myself after that James Bond Nonsense.

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Speaker 1: Up next, Sean, is the Fear and Greed Daily Interview.

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Speaker 1: You're speaking to Andrew lampertang Managing director of Management Consulting

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Speaker 1: for Publiciers Sapient.

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Speaker 2: Yes, all about the relationship between banks and consumers. Now,

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Speaker 2: I actually worked with Andrew many years ago at Fairfax,

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Speaker 2: and he was always, you know, tech savvy. You know

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Speaker 2: those guys in the office he think, Eh, he knows

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Speaker 2: what he's talking about. What I loved about this interview, No,

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Speaker 2: I mean I loved what he told me. But I

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Speaker 2: also like the faith he always carries cash just in

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Speaker 2: case I'm well past that.

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Speaker 1: Yeah. Yeah, does that making more technologically advanced totally might

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Speaker 1: be the only time in your life?

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Speaker 2: Sean, Yeah, Andrew, Andrew's far more savvy this than I

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Speaker 2: could ever possibly be. But just the fact that he

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Speaker 2: still has twenty dollars in his wallet.

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Speaker 1: I like that. Yeah. It's a very good chat. It's

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Speaker 1: up next to the Fear and Greed playlist on your

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Speaker 1: podcast platform or at Fearangreed dot com dot A. You

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Speaker 1: thank you, Sean, Thank you. Michael. It's Tuesday, the fourteenth

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Speaker 1: of May twenty twenty four. Make sure you're following the

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Speaker 1: podcast and join us online on LinkedIn, Instagram, x TikTok

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Speaker 1: and Facebook. I'm Michael Thompson, and that was fear and greed.

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Speaker 1: Have a great day.