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Speaker 1: Tumbling share price is among big tech companies rattle investors,

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Speaker 1: Prime Minister Anthony Abernizi set to reshuffle his cabinet, and

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Speaker 1: Quantus and Virgin Cut International airfairs. Welcome to Fear and Greed.

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

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Speaker 1: It is Friday, the twenty sixth of July twenty twenty four.

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

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Speaker 2: Morning, Michael, first week back. How'd you go?

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Speaker 1: It's been good? Actually, you know, when we have big

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Speaker 1: stories like Joe Biden and the main story today with

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Speaker 1: the tech stocks, a week like this absolutely flies by.

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Speaker 2: I'm with you. It's been a great week actually fun. Yeah.

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Speaker 1: I'm looking forward to the weekend edition tomorrow as well,

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Speaker 1: but we'll get to that later on, Sean. The main

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Speaker 1: story this morning plenty of nervous investors in technology stocks today,

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Speaker 1: with big falls in major names like Tesla and Video

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Speaker 1: and Alphabet raising it's a big question about whether tech

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Speaker 1: has peaked.

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Speaker 2: Earning reports from Alphabet, parent of Google and Tesla, triggered

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Speaker 2: a slump in big tech stocks, with the Nasdaq on

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Speaker 2: Wall Street down three point six percent, the biggest one

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Speaker 2: session drop since twenty twenty two. The big seven tech

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Speaker 2: stocks lost around one trillion dollars in value for the session. Incredible.

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Speaker 2: The problem for the tech companies is they are what

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Speaker 2: investors call priced for perfection, meaning they're so highly valued

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Speaker 2: that any little disappointment can send a share prices tumbling.

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Speaker 2: Tesla's Dune quarter earnings were down forty five percent. They

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Speaker 2: were disappointing. It's share price closed down twelve percent yesterday morning.

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Speaker 2: It's still up over eighteen percent or so during the

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Speaker 2: last month, so it's hardly a crisis, but the sentiment

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Speaker 2: in the last two or three days hasn't been so good.

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Speaker 2: At Alphabet, earnings and revenue expectations were better than expected,

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Speaker 2: but its share price film more than five percent. Alphabet

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Speaker 2: investors are worried about its profit margins, and the share

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Speaker 2: price of Market Darling and Video fell nearly seven percent

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Speaker 2: as people become just a little more skeptical around the

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Speaker 2: promised riches of artificial intelligence. Those moves were reflected in

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Speaker 2: the local market yesterday with tech stocks sold off hard.

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Speaker 2: It really does demonstrate the fickleness of traders at the moment,

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Speaker 2: particularly around tech stocks.

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Speaker 1: Sean, can we say it can we actually say then

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Speaker 1: that tech has peaked.

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Speaker 2: You can, but you'd be a very very brave person

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Speaker 2: to confidently predict that.

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Speaker 1: Michael, I don't think I'm brave enough for anything like that.

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Speaker 2: I mean, it's been predicted for a couple of years

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Speaker 2: now that tech stocks have peaked, and it hasn't happened.

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Speaker 2: And as a result, the six largest companies on Wall

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Speaker 2: Street are all tech giants, Microsoft, Apple and Video. Amazon.

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Speaker 2: Veteran alphabet Tesla I think comes in at number eight

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Speaker 2: or nine or so. I think Berkshire Hathway is bigger

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Speaker 2: than it. Still, the top six stocks are the tech stocks.

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Speaker 2: It's different now, I suppose, compared to the last couple

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Speaker 2: of years and even the last couple of months, is

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Speaker 2: that more large economies are talking about cutting interest rates.

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Speaker 2: I either have done it or they're about to do it.

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Speaker 2: That should help many interst rate sensitive stocks, which are

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Speaker 2: often smaller companies. So in the US, for example, small

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Speaker 2: cap indices have been rising while the tech stocks have

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Speaker 2: been falling. So lower rates theoretically should help what they

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Speaker 2: call value companies, lower priced companies which do better when

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Speaker 2: interest rates for also, they just unbridled enthusiasm for anything

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Speaker 2: AI seems to have been tempered just a bit that's

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Speaker 2: worked against companies like Nvidia and Microsoft. So I think

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Speaker 2: what i'd say, probably can't say it's peaked, but certainly

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Speaker 2: there's a bit of a reality check going on on

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Speaker 2: Wall Street at the moment, and I dare say it's

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Speaker 2: well needed.

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Speaker 1: All right, Land's turn our attention back home. Now sean

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Speaker 1: local market, how do they perform? Yesterday wasn't a very

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Speaker 1: good day.

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Speaker 2: The SMPA six two hundred closed down one point three

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Speaker 2: percent to seven eight hundred and sixty one points, with

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Speaker 2: the sell off in tech stocks overseas hitting the local market.

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Speaker 2: A lot of commodity based companies also didn't do very well.

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Speaker 2: In fact, three quarters of the top two hundred ended

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Speaker 2: the day lower. The Tech index was down almost three percent. Wise,

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Speaker 2: Tech Global was down about that amount, worse of the

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Speaker 2: large capsule's Forest Few Metals Group, which closed five percent lower.

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Speaker 2: Other poor performers included Wes Farmers, Goodman Group, Santos, James

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Speaker 2: Hardin Transurban. In fact, all top thirty stocks closed lower.

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Speaker 2: You don't see that very often in corporate news. Jobs

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Speaker 2: marketplace Seek has written down the value of its Chinese

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Speaker 2: marketplace oupin by one hundred and forty one million dollars

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Speaker 2: in an outcome it blamed on China's week economy. Its

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Speaker 2: share price for a one point six percent and MPOLE

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Speaker 2: was down about three percent. After it gave a trading update,

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Speaker 2: it said first half trading was resilient. Vesters didn't like

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Speaker 2: it that much and sold it off.

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Speaker 1: Back to international markets. Thanks to blue Chip Communication, the

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Speaker 1: experts helping financial services companies market, communicate and grow. Is

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Speaker 1: it blue Chip Communication, dot com, dot au? We've talked

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Speaker 1: about Wall Street, Sean. What else is happening on international markets?

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Speaker 2: Well, oil prices rose for the first time in four

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Speaker 2: sessions after figures show that US crude inventries fell and

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Speaker 2: Russia said it would make extra production cuts. I didn't

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Speaker 2: actually realize this, and I feel a bit dumb because

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Speaker 2: I didn't realize that Russia is actually the biggest oil

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Speaker 2: producer among the OPEC plus countries. I always assumed it

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Speaker 2: with Saudi Arabia.

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Speaker 1: You know, I don't think you need to feeldumb. I

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Speaker 1: would have made the same assumption. I'm a big one

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Speaker 1: for making assumption.

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Speaker 2: Sean and Russia's actually the second largest oil produced from

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Speaker 2: the world. The largest isn't an OPEQ member and it's

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Speaker 2: the US, but of course they don't export anywhere near

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Speaker 2: as much because they use it to fill their cars.

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Speaker 2: The fact that there are production cuts coming from Russia,

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Speaker 2: alongside the fact that the Aussie dollar is slipping it's

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Speaker 2: now about sixty five and a half US sense well,

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Speaker 2: it made me think it's probably a good time to

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Speaker 2: check in on petrol prices. It's a Friday, that's what

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Speaker 2: we should do. I know that the petrol prices around

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Speaker 2: my place are high, not extreme, but certainly at the

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Speaker 2: higher end of things now. In Sydney prices have peaked

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Speaker 2: and they are on the way down according to the

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Speaker 2: Australian Competitions Consumer Commission. This is all indicative, no guarantees

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Speaker 2: in this, but certainly it's not a bad place to start.

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Speaker 2: In Melbourne that are on the way up, so maybe

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Speaker 2: you should fill up now rather than wait for a

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Speaker 2: few days. Same deal. In Brisbane Adelaide prices are falling

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Speaker 2: in close to loose, while in Perth they're out of peak.

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Speaker 2: So if you've got half a tank, try and hang on.

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Speaker 1: Just cruise downhills in Neutral for a little bit.

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Speaker 2: That's right. Yeah, there are a couple of interest rate

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Speaker 2: moves by global central banks yesterday. We're excited about those

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Speaker 2: sorts of things because of course we have inflation data

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Speaker 2: out next week and the following at the Reserve Bank

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Speaker 2: prognosticating on what it's going to do around rates. We

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Speaker 2: had the People's Bank of China come out yesterday and

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Speaker 2: unexpectedly lower the cost of its one year policy loans

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Speaker 2: by the most in more than four years. That should

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Speaker 2: support the world's second largest economy. And the Bank of

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Speaker 2: Canada cut interest rates by a quarter percentage point for

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Speaker 2: a second consecutive meeting. It signaled further easing ahead as

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Speaker 2: inflation worries.

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Speaker 1: Wayne Bonus points for the use of the term prognosticating

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Speaker 1: d that's most impressive. Speaking of impressive, you have a

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Speaker 1: very impressive guest today coming up after the show. You're

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Speaker 1: speaking with Professor Jamie Pittock from the A and U

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Speaker 1: and the Wentworth Group of Concerned Scientists.

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Speaker 2: Now, I think Jamie, because we did this interview yesterday,

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Speaker 2: I think he used he says, uses the term ad hockery,

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Speaker 2: which I think has to go in the prognostication style

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Speaker 2: bucket of great words to use.

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Speaker 1: At Hockery that's fantastic.

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Speaker 2: It is. It is irrelevant to what we talked about

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Speaker 2: though Jamie is a great guy. He, as you mentioned,

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Speaker 2: is from the A and U part of the Wentworth

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Speaker 2: Group of Concerned Scientists, and it's all about the money

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Speaker 2: needed to spend to revitalize the environment. So we're talking

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Speaker 2: about the banks of inland rivers, we're talking about waterways,

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Speaker 2: fish reserves, those types of things. It's not actually that

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Speaker 2: much money to improve the outlook for Australia's food production,

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Speaker 2: which is probably the most critical thing, clean drinking water,

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Speaker 2: all sorts of stuff like that. The Wentworth Group of

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Speaker 2: scientists have done a six year study to look at

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Speaker 2: what is needed. It's splitted into five different categories and

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Speaker 2: it explains, you know, how much money is needed in each.

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Speaker 2: It was released at the National Press Club this week

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Speaker 2: and we talked to Jamie all about that. It's a

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Speaker 2: little sort of different to what we normally do here

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Speaker 2: at Fear and Greed, but it's a great chat, really interesting.

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Speaker 1: Yeah, it certainly is. It is a fascinating one. Well

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Speaker 1: worth a listen today. It's coming up after the show,

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Speaker 1: so I stick around for that.

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Speaker 2: Sean.

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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 sean Prime Minister Anthony Abernezi will

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Speaker 1: announce a cabinet reshuffle over the weekend after two ministers resigned,

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Speaker 1: and he sounded just a tad like he was electioneering.

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Speaker 2: Yes, so Linda Bernie and Brendan O'Connor will resign from

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Speaker 2: Parliament at the next election, but they'll step down from

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Speaker 2: cabinet immediately, paving the way for a reshuffle of the

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Speaker 2: front bench. Both members are from the left now. The

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Speaker 2: sixty seven year old Miss Bernie was the first Indigenous

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Speaker 2: woman to sit in the House Representatives and the first

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Speaker 2: to be a member of cabinet. Mister Alberenezi years the

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Speaker 2: announcement yesterday to highlight the government's stability, saying no government

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Speaker 2: in living memory has had the same cabinet and ministerial

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Speaker 2: positions for its first two years in office. He went

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Speaker 2: on to say that at the next election due by

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Speaker 2: May next year, he'll be seeking to be the first

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Speaker 2: Prime minister since John Howard in two thousand and four

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Speaker 2: to serve out a term and be re elected, which

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Speaker 2: is actually quite incredible because you think of the destabilization

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Speaker 2: in both the coalition and labor over the past twenty years.

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Speaker 2: The fact that he could come and be the first

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Speaker 2: prime minister seeking to be re elected and serve out

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Speaker 2: a full term is quite phenomenal. I just think he

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Speaker 2: sounded like he's electioneering, that he.

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Speaker 1: Might be getting a bit of a head start on

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Speaker 1: here sean Now. Macquarie Group yesterday said fewer big transactions

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Speaker 1: are holding down earning, sending it share price down three

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Speaker 1: point six percent.

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Speaker 2: Business at its investment banking and financing arm, traditionally one

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Speaker 2: of the strong suites of the group, has been slow,

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Speaker 2: with fewer corporate deals and slower sales of assets. Macquarie

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Speaker 2: boss Shamara wick Raminayaka said she remains cautious about the

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Speaker 2: short term outlook and the turnaround reported by US investment

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Speaker 2: banks wasn't happening in Australia yet. McCrary said earning to

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Speaker 2: the Dune quarter were flat.

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Speaker 1: Now.

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Speaker 2: The group held its AGEM yesterday. Its year end is

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Speaker 2: mart so yesterday's data was just on three months. Helping

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Speaker 2: during the last three months was increased activity in commodities trading,

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Speaker 2: particularly in North America around gas power and missions.

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Speaker 1: I mentioned this one at the top of the show.

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Speaker 1: Quantas has now cut prices six times this year, and

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Speaker 1: Virgin Australia is averaging at least one fair sale a month.

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Speaker 1: According to flight Center.

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Speaker 2: International affairs globally fell six percent in the first six

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Speaker 2: months of twenty twenty four from a year earlier. Flight

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Speaker 2: Center said in a report released this week, flights out

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Speaker 2: of Australia were thirteen percent cheaper, while fares to Indonesia,

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Speaker 2: including Bali, were eighteen percent lower. Flight Center said prices

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Speaker 2: will continue to fall as the cost of living crisis

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Speaker 2: makes consumers more price sensitive now. The CEO, James Cabinet said,

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Speaker 2: under pressure, airlines are seeking to fill planes months before departure,

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Speaker 2: so there are deals for early bookers, citing ten day

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Speaker 2: tours to China including flights and accommodation which are actually

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Speaker 2: on off and now for less than one thousand dollars

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Speaker 2: pretty incredible. The lower airfares is a partial rebalancing of

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Speaker 2: power from the post COVID demand surge that gave airlines

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Speaker 2: almost a free range to lift fares. Now. Falling fares

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Speaker 2: reflect the growing number of international flights and offer, particularly

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Speaker 2: in Asia and Europe, in a traveling public that is

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Speaker 2: increasingly cost conscious. Have you taken advantage of any of

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Speaker 2: these fairs.

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Speaker 1: Michael, No, Sean, I have not. I had a holiday

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Speaker 1: at home last week. The cost of living crisis has

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Speaker 1: hit the Thompson household for sure. But I hope one day,

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Speaker 1: I hope, one day in the future to be traveling

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Speaker 1: overseas again. Sean, By any chance to you planning a trip?

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Speaker 1: Yea sometime soon.

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Speaker 2: I am, as it turns out. But my point in

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Speaker 2: this wasn't so much to boast and to rub it in.

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Speaker 2: They no, don't mind doing that.

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Speaker 1: It's a happy accident that one gone.

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Speaker 2: You know, when you have younger kids, so your kids

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Speaker 2: a younger primary school or infants in primary school, you

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Speaker 2: kind of you see people who are older like me,

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Speaker 2: and you know not that you are. You don't everyone

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Speaker 2: to be as old as me, but you think yourself, oh,

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Speaker 2: I wish I'll go on holidays that they can. And

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Speaker 2: there's a real kind of joy in your kids getting

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Speaker 2: older and going away with her.

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Speaker 1: I'm leaving them at high.

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Speaker 2: Sorry guys, hope you're not listening.

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Speaker 1: I know your your trip to Thailand is for two

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Speaker 1: people only.

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Speaker 2: Yeah, went to Bali for two people. Kine of one

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Speaker 2: hundred thousand bucks soundly.

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Speaker 1: One way to get the cost down of these trips

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Speaker 1: is just leave everyone else behind.

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Speaker 2: Minor, adults. My children are at well, they're almost I

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Speaker 2: mean fifteens at adults, isn't it nowadays? They go up

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Speaker 2: so quickly?

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Speaker 1: Close enough, Sean, anyway, we're going to get ourselves in

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Speaker 1: trouble here. Let's move on, shall we at. Rising costs

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Speaker 1: of mining iron ore in Western Australia is hurting forourd

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Speaker 1: Escue Metals group, with the minor warning that costs could

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Speaker 1: be up by nine percent in the next year.

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Speaker 2: That was enough to trigger a five percent fall and

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Speaker 2: ford Escu's share price, taking the title decline this year

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Speaker 2: to thirty percent. The group said export volumes would be

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Speaker 2: higher than last year, but unit costs will be somewhere

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Speaker 2: between one and nine percent higher.

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Speaker 1: Now.

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Speaker 2: The thing is when you have more volume, unit costs

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Speaker 2: should be falling. That's not happening. Fort to U Metals

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Speaker 2: has experienced continued pressure on costs and digging up a

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Speaker 2: ton of iron ore is now almost fifty percent more

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Speaker 2: expensive than it was before the COVID nineteen pandemic. The

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Speaker 2: strip ratio do you know the strip ratio is?

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Speaker 1: Michael, did you say, strip ratio.

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Speaker 2: Yeah, stop grinning, I better move on. I don't sounds

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Speaker 2: it's pretty learnely out there on those mines. The strip ratio,

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Speaker 2: which is the amount of waste rock dug up to

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Speaker 2: access salable iron ore. Sure you knew that that's expected

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Speaker 2: to rise as well. So if you have a higher

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Speaker 2: strip ratio, it's going to cost you more. And let's

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Speaker 2: expect fortes qu to come in with an underlying profit

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Speaker 2: of about nine point three billion dollars next month when

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Speaker 2: it reports.

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Speaker 1: And if an analyst isn't quite revealing how much they

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Speaker 1: expect it to be, it's a strip tease.

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Speaker 2: Ah, good, well done.

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Speaker 1: I didn't like it. I felt like it was lazy anyway.

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Speaker 1: Sean part of the cost problem in mining, particularly in

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Speaker 1: w WA, is the cost of labor. But yesterday the

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Speaker 1: boss of Australia's largest listed gold miner said the heaters

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Speaker 1: coming out of labor costs.

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Speaker 2: Northern Star managing director Stuart Tonkin reckons production costs could

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Speaker 2: plateau or maybe fall, on the back of the demise

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Speaker 2: of the nickel industry in the state, the slump in

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Speaker 2: lithium prices and the shutdown of some high cost iron

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Speaker 2: ore mines that have already been seven thousand job losses

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Speaker 2: across the nickel sector in Western Australia.

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Speaker 1: The Chief Executive van Z Shane Elliott and other senior

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Speaker 1: managers are under a bit of pressure over the misleading

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Speaker 1: trading data submitted to the Commonwealth Government last year.

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Speaker 2: Yeah, we talked about this yesterday. It's really heading up.

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Speaker 2: Mister Elliott yesterday said he had delivered a personal apology

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Speaker 2: for misleading the Australian Office of Financial Management about its

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Speaker 2: bond trading activity, with the bank now investigating whether it

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Speaker 2: should have reported the issue to the regulator world before

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Speaker 2: it eventually did. Even more interesting, the bank's board, chaired

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Speaker 2: by Paul O'Sullivan, is leading a process to ensure consequences

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Speaker 2: will be applied to senior executives. And I quote what

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Speaker 2: mister Elliot said, both past and present, including myself, we're appropriate.

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Speaker 2: I don't think I've ever seen CEO saying that the

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Speaker 2: board is investigating himself. Several employees in the company's Sydney

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Speaker 2: dealing room have been dismissed or suspended for misconduct. Earlier

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Speaker 2: in the month, the bank admitted to the Australian Office

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Speaker 2: of Financial Management that its market division overstated the value

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Speaker 2: of government bonds. It traded by more than fifty billion

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Speaker 2: dollars in twelve months alone, kind of, as we put

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Speaker 2: it yesday, inflated its resume. That boosted its prospects of

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Speaker 2: winning some of these lucrative mandates from government.

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Speaker 1: One more before we go to International News, Sean Origin

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Speaker 1: Energy will spend another four hundred and fifty million dollars

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Speaker 1: to expand its battery storage capacity at its Arahing generation

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Speaker 1: site in New South Wales.

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Speaker 2: It's looking at a second battery at the facility. It'll

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Speaker 2: add longer duration storage, which she's increasingly needed as a

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Speaker 2: transition to renewables continues. It involves a storage system with

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Speaker 2: more than four hours of capacity maximum output of two

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Speaker 2: hundred and forty megwats. It's due online in March twenty

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Speaker 2: twenty seven. The first battery, which costs six hundred million dollars,

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Speaker 2: involves two hours of storage. This one, we're talking about

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Speaker 2: four hours of storage. The size of this second system

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Speaker 2: will make it much more suitable for absorbing excess solar

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Speaker 2: generation during the day and applying it through evening peak

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Speaker 2: demand periods, which is kind of one of the big

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Speaker 2: challenges for batteries is being able to grab it, store

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Speaker 2: it for long enough, and then get it out to consumers.

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Speaker 1: Turning to international news now, and US President Joe Biden

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Speaker 1: framed his decision to drop out of the twenty twenty

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Speaker 1: four race as a bid to unify the nation under

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Speaker 1: a new generation of leaders.

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Speaker 2: In his first speech since ending his re election campaign

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Speaker 2: and political career, mister Biden gave an eleven minute Oval

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Speaker 2: office address saying, I quote, I have decided the best

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Speaker 2: way forward is to pass the torch to a new generation.

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Speaker 2: That's the best way to unite our nation. He said

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Speaker 2: it was a difficult choice, but ultimately he needed to

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Speaker 2: put aside his personal ambition. I'm quoting him again. The

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Speaker 2: great thing about America is here. Kings and dictators do

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Speaker 2: not rule the people. Do histories in your hands. The

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Speaker 2: power is in your hands. And quote not hard to

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Speaker 2: see what he's talking about if you read between the lines.

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Speaker 2: He's talking about a new generation. Remember Donald Trump now,

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Speaker 2: the old man in this election campaign, and kings and dictators. Hm,

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Speaker 2: we know he's referring to there now.

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Speaker 1: The number of Japanese citizens fell at the fastest rate

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Speaker 1: last year since data collection began in the nineteen sixties,

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Speaker 1: adding pressure on the nation's social security system and the

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Speaker 1: shrinking labor market.

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Speaker 2: Yeah, it's kind of a really interesting demographic story, this one.

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Speaker 2: The population of Japanese nationals fell by more than eight

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Speaker 2: hundred and sixty one to one hundred and twenty one

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Speaker 2: point six million over last year. That is the fifteenth

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Speaker 2: executive year where the population of Japanese nationals have declined.

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Speaker 2: According to the Ministry of Internal Affairs, while the foreign

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Speaker 2: population increased last year by eleven percent hit three million,

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Speaker 2: it wasn't enough to make up for the shortfall in

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Speaker 2: Japanese nationals. The overall population shrenk by zero point four percent.

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Speaker 2: According to a report on Bloomberg, This creates all these

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Speaker 2: incredible challenges, not least finding people to do work in Japan.

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Speaker 2: At the moment, there are nearly three openings for every

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Speaker 2: worker looking for a job. The unemployment rate is less

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Speaker 2: than three percent.

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Speaker 1: That's extraordinary, Okay. Up next is the Fear and Greed

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Speaker 1: Daily Interview. Your guest today Professor Jamie Pittock from the

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Speaker 1: A and U and the Wentworth Group of Concerned Scientists.

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Speaker 2: All about a report that the Wentworth Group of Concerned

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Speaker 2: Scientists released at the Press Club this week about how

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Speaker 2: to save Australia's environment. We're not talking carbon here, we

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Speaker 2: are talking about riverbanks and estuaries and food, waterways and

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Speaker 2: soil and that type of stuff. It's a fascinating chat.

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Speaker 1: Yeah, and even the fact that they say that we'll

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Speaker 1: be able to essentially preserve all of the threatened species

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Speaker 1: as well by investing this money. It's just a really

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Speaker 1: really interesting chat and a huge amount of work has

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Speaker 1: gone into preparing this report, so very big week for them.

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Speaker 1: It is definitely worth a listeners up next in the

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Speaker 1: Fear and Greed playlist on your podcast platform or at

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Speaker 1: Fearangreed dot com dot au. And if you're after something

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Speaker 1: a little less worthy, I don't know, I wouldn't say that.

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Speaker 1: Stick around tomorrow for the weekend edition of Fear and Greed,

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Speaker 1: where you and I go head to head to decide

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Speaker 1: the biggest story of the week and the most remarkable

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Speaker 1: story and a few other categories, and our colleague Adam

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Speaker 1: Lange judges us, and his judging is extraordinarily erratic.

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Speaker 2: Ah, it's totally arbitrary. General, I'm most proud about the

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Speaker 2: weekend edition of Fear and greed is that we get

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Speaker 2: a lot of feedback, probably more feedback on that than

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Speaker 2: anything else. And people say we make them laugh, and

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Speaker 2: I reckon, If you can make people laugh in a

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Speaker 2: business and politics show, you're doing a pretty good job. Yeah.

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Speaker 1: I'd like to think so. Usually they're laughing at us.

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Speaker 1: Yeah yeah, all right, stick around though. That one is

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Speaker 1: coming up tomorrow, so make sure if it follow on

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Speaker 1: the podcast so that it lands in your playlist tomorrow morning.

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

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Speaker 2: Michael.

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Speaker 1: It is Friday, the twenty sixth of July twenty twenty four.

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Speaker 1: Follow the podcast, join us online on LinkedIn, Instagram, x

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Speaker 1: TikTok and Facebook. Oh, Michael Thompson, And that was Fear

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Speaker 1: and Greed. Have a great day.