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Speaker 1: Today on Fear and Greed. A bumper jobs report pushes

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Speaker 1: out the timing of an interest rate cut. Prime Minister

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Speaker 1: Anthony Alberanezi welcomes the ceasefire deal between Israel and Hamas,

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Speaker 1: and the local share market rallies with Conwealth Bank leading

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Speaker 1: the way. Plus Rio faces some tough decisions in the

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Speaker 1: Pilbor and Joe Biden gives his farewell speech. Welcome to

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Speaker 1: Fear and Greed. Daily business news for people who make

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Speaker 1: their own decisions. It is Friday, the seventeenth of January

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

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Speaker 2: Good morning, Michael, Sean.

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Speaker 1: The main story this morning it is all about jobs,

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Speaker 1: isn't it? A bumper jobs report yesterday It shows that

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Speaker 1: more than fifty six thousand people found work last month,

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Speaker 1: which is much higher than expected. And the thing is,

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Speaker 1: and this is the ramifications of it, it's enough to

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Speaker 1: dampen expectations of an interest rate cut before May. Every

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Speaker 1: day it seems we're talking at a new data set

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Speaker 1: that's changing expectations.

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Speaker 2: Ah, those market economists are a fickle bunch, no doubt

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Speaker 2: about it. We've been predicting a slay down in the

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Speaker 2: labor market for at least a year, and it just

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Speaker 2: hasn't happened. Fifty six thousand, three hundred jobs were created

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Speaker 2: last month. We expect that about fifteen thousand jobs to

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Speaker 2: be created, but fifty six thousand, three hundred. The unemployment

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Speaker 2: rate came in at four percent, up from three point

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Speaker 2: nine percent, but still around historical lows. The participation rate

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Speaker 2: hit a record high of sixty seven point one percent.

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Speaker 2: It's not quite as strong as the top line suggests.

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Speaker 2: There was an eighty thousand increase in part time workers

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Speaker 2: and a twenty four thousand or twenty three thousand, seven

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Speaker 2: one hundred and fall in full time workers. Still, as

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Speaker 2: we always say, the trend is your friend and economics,

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Speaker 2: and this labor market is very very strong. There's something

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Speaker 2: called the employment to population ratio, so that's everyone that's

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Speaker 2: employed compared to the whole population. As it suggests record

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Speaker 2: high sixty four point five percent. In fact, it's more

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Speaker 2: than two percentage points above pre COVID levels. Back then

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Speaker 2: it was around sixty two percent. It's now sixty four

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Speaker 2: and a half percent. Under employment fell while aur's work rise.

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Speaker 2: Everything was good about this report yesterday treasure of Jim

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Speaker 2: Chalmers certainly thought so he came out he said the

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Speaker 2: economy was coming in for a soft landing, which is

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Speaker 2: what we all wanted after inflation had taken off.

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Speaker 1: The employment to population ratio. That's an interesting one, isn't it,

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Speaker 1: Because what does that suggest to you? Then that the

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Speaker 1: population growth has largely been in working age people in

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Speaker 1: terms of people coming into the country then, and they

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Speaker 1: are all getting jobs then, so that a larger percentage

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Speaker 1: of those who are in the country are then technically employed.

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Speaker 2: Yes, when you have high net migration, they tend to

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Speaker 2: be people who take jobs as opposed to five year

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Speaker 2: olds or something like that, so that employment to population

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Speaker 2: ratio rises. Notwithstanding it, today it's at a record high

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Speaker 2: for whatever reason, and it just shows how strong the

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Speaker 2: market is.

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Speaker 1: Okay, but sean interest rates, interest rates? I knew we're

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Speaker 1: going to get interest rates. Yeah, what does it mean?

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Speaker 1: Are we going to be getting a rate? Forty eight

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Speaker 1: hours ago, twenty four hours ago, we were talking about, Hey,

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Speaker 1: we might have an interest rate cut in February.

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Speaker 2: Ah, No need to rush now, Michael, No need to

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Speaker 2: rush it all. So what you're talking about are those

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Speaker 2: figures last week the underlying inflation figures for November came

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Speaker 2: in at three point two percent. That triggered a flurry

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Speaker 2: of excitement, with some people saying, hey, maybe we will

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Speaker 2: get a rate cut in February. Certainly bond markets priced

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Speaker 2: in a rate cut for februe or the likelihood, saying

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Speaker 2: was more likely that there would be a rate cut

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Speaker 2: next month. Now, I don't know. I think the Reserve

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Speaker 2: Bank can afford to wait and see. It's got a

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Speaker 2: few big data points coming up, none more so than

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Speaker 2: on the twenty ninth of January, next week the CPI

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Speaker 2: figures or the December quarter. It can also probably hold

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Speaker 2: off and see economic growth figures, the next labor force figures.

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Speaker 2: The Reservak actually thought the unemployment rate to be closer

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Speaker 2: to four and a half percent at this point. That's

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Speaker 2: what it's forecast say. We're actually at four percent. So

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Speaker 2: I really do think it won't do anything anytime soon.

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Speaker 2: It's interesting why the labor market's doing so well. What

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Speaker 2: they call the non market sector, so government paid jobs. Clearly,

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Speaker 2: that's where we've seen all sorts of labor force growth,

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Speaker 2: aged care, education, public service.

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Speaker 1: But there's also this.

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Speaker 2: Whole gig economy thing where if you lose your job,

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Speaker 2: you can go met an uber driver, and that may

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Speaker 2: actually have sort of pushed down the unemployment rate without

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Speaker 2: any of us realizing. Certainly, the markets reacted yesterday. The

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Speaker 2: ASX stayed high. I'll talk about that in a moment,

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Speaker 2: and the obviously dollar jumped sixty two point three US sins. Yeah.

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Speaker 1: That's the point is that the strong jobs number didn't

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Speaker 1: seem just the local stand market, the ASEX ending up

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Speaker 1: what nearly one and a half percent.

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Speaker 2: Yeah, So the market rallied after US price growth figures

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Speaker 2: the previous night, more of than in a moment, Wall

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Speaker 2: Street Rose has the result of those figures. Our market

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Speaker 2: followed the big banks. They jumped, some were up three percent.

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Speaker 2: In fact, Comonwealth Bank finished yesterday up two point nine

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Speaker 2: eight percent. When you're the biggest company on the bas

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Speaker 2: and you're jumping three percent, well the boss is going

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Speaker 2: to have a pretty good day. Rate sensitive companies like

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Speaker 2: the technology stocks, the property companies, they outperformed the underperformers

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Speaker 2: with those stocks that are less reliant on interest rates,

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Speaker 2: healthcare stocks, utility stocks, consumer staples, basically Woollis and Coals.

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Speaker 2: In terms of specific stocks, Zipco The buy now, Pay

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Speaker 2: Later group surged after its competitor Sezel upgraded revenue guidance.

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Speaker 2: You're on. Pharmaceuticals rebounded after a tough session on Wednesday.

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Speaker 2: Tabcorp Holdings jumped after announcing its first chief wagering officer.

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Speaker 2: You'd think that it gaming company would have a chief

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Speaker 2: wager officer. That's a pretty good idea. By then, the

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Speaker 2: smp A six two hundred was at one point four

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Speaker 2: percent to eighty three hundred and twenty seven points.

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Speaker 1: Before we get to those US inflation figures. Sean, Just

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Speaker 1: while we're talking about local markets, I wanted to mention

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Speaker 1: today's interview that you have coming up after the show.

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Speaker 1: You're speaking today as Ben Gilbert from Jardin Australia. It's

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Speaker 1: a great one for investors.

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Speaker 2: Sure is all about JB High Fi. Jbie hi Fi

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Speaker 2: arguably is the best retailer stock of the past decades.

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Speaker 2: Of the past decade, it's only I'm going to get

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Speaker 2: this wrong, but in about twenty twenty five years it's

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Speaker 2: actually only had two CEOs. It's had this incredible ability

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Speaker 2: to reinvent itself and attack customers, track revenue, boost sales.

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Speaker 2: So what's that mean? For where it stands today, and

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Speaker 2: we ask Ben all about it. It's kind of getting

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Speaker 2: towards the end of our summers series of investing issues

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Speaker 2: of investing discussions, and I think this is one of

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Speaker 2: the better ones.

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Speaker 1: It's Michael, Yeah, it is a really good conversation. As

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Speaker 1: I say, for investors, it is a must listen. Now, Sean,

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Speaker 1: you did mention before the US inflation figures are weaker

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Speaker 1: than expected, so now investors think there might be more

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Speaker 1: rate cuts in the US.

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Speaker 2: Yes, So the discussion was only one more rate cut

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Speaker 2: in the US this year. The core CPI came in

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Speaker 2: zero point two percent for last month. The previous few

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Speaker 2: months had been three zero point three percent or more so,

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Speaker 2: zero point two percent times that by twelve, that's two

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Speaker 2: point four percent. That's a pretty good inflation number. I

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Speaker 2: think people will be happy with that. Therefore you might

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Speaker 2: see more rate cuts, that's the theory anyway. Otherwise, on

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Speaker 2: global markets, oil prices are rising. We're going to see

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Speaker 2: that in the petrol pump. In two or three weeks,

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Speaker 2: US crewed inventories fell and there are fears around supply,

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Speaker 2: particularly around Russia and Iranian oil. So the price of

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Speaker 2: oil is up to eighty two US dollars are barrel.

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Speaker 1: Sean A quick break. When we come back, we're talking

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Speaker 1: politics here and in the US, We've got Joe Biden's

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Speaker 1: farewell speech to chat about potentially a somewhat unpopular move

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Speaker 1: by Starbucks. We can get your thoughts on this one

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Speaker 1: in a minute. We will be back in a moment

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

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Speaker 1: Minister Anthony Albanezi has welcomed the announcement of a six

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Speaker 1: week ceasefire between Israel and Hamas following fifteen months of conflict.

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Speaker 2: The deal to end the conflict was announced following days

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Speaker 2: of negotiations in Qatar. It's due to begin on Sunday.

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Speaker 2: Around twelve hundred Israelis and forty six thousand Palestinians have

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Speaker 2: been killed over the course of the war. The deal

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Speaker 2: promises the release of thirty three of the nearly one

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Speaker 2: hundred Israeli hostages of the initial six week halt to fighting,

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Speaker 2: with some Palestinian prisoners also to be returned from Israel.

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Speaker 2: The second phase of the deal will include negotiations over

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Speaker 2: the six weeks to permanently end the war, with a

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Speaker 2: third to include the return of the final hostages and

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Speaker 2: recon instruction of Gaza. Anthony Albernizi yesterday said the agreement

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Speaker 2: was a constructive step towards peace and stability in the region.

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Speaker 2: He said that it needs to mark the beginning of

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Speaker 2: a new chapter for the Israelian Palestinian people. Generally, the

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Speaker 2: world leaders welcomed the decision. Let's hope it holds Michael.

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Speaker 1: Yeah, absolutely, Sean. Now, Rio Tinto faces more challenges with

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Speaker 1: the wa iron ore mines, which provide the bulk of

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Speaker 1: group earnings, as it continues to ship higher volumes of

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Speaker 1: lower grade material to steelmakers in China.

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Speaker 2: The company released its quarterly production report yesterday plenty. In

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Speaker 2: it it was forced. It said it was forced to

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Speaker 2: draw down on minestockpiles towards the end of last year,

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Speaker 2: during what's typically the most productive quarter for iron ore

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Speaker 2: operations in the Pilbara. According to a report in the

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Speaker 2: Australian heavy rain flooded some mining pits that forced Rio

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Speaker 2: to eat into stockpiles that it prefers to build up

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Speaker 2: during that quarter. Now, the current period January to April

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Speaker 2: considered a higher risk of disruption because of cyclo and activity.

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Speaker 2: But what Rio is facing now is the fact that

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Speaker 2: they actually have lower stock piles because they aid into

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Speaker 2: it last quarter. See how we go there. Rare one

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Speaker 2: to iron ore production costs for twenty twenty four will

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Speaker 2: be at the higher end of guidance based on lawer

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Speaker 2: output and inflation outstripping outstripping internal expectations. On the global

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Speaker 2: economic outlook, Rio said inflation's moderating growth is stabilizing, but

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Speaker 2: there are still risks posed by geopolitical tensions and persistent

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Speaker 2: labor shortages. It also talked about the US economy. It said,

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Speaker 2: in particular, the tech sector had outperformed and the outlook

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Speaker 2: remained stable. In the countdown to President elect Donald Trump

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Speaker 2: taking their reins China is all important for that company.

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Speaker 2: Rare believes iron ore demand has peaked there but will

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Speaker 2: remain strong. The Chinese economy has provided mixed signals about

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Speaker 2: what the next twelve months will look like.

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Speaker 1: Turn into international news now. Sean President Joe Biden used

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Speaker 1: his farewell address to the nation yesterday to deliver some

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Speaker 1: pretty stark warnings about an oligarchy of the ultra wealthy

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Speaker 1: taking root in the country and a tech industrial complex

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Speaker 1: that is infringing on Americans' rights and the future of democracy.

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Speaker 1: Who is he talking about?

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Speaker 2: I don't know.

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Speaker 1: Really, that's a mystery, isn't it.

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Speaker 2: If you get the opportunity, go and listen to it,

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Speaker 2: because it is masterful in absolutely skewing people like Donald

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Speaker 2: Trump and Elon musketc and the ultra rich and without

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Speaker 2: saying their names. Yeah it was. He was speaking from

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Speaker 2: the Oval Office as he prepares to hand over power

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Speaker 2: to President elect Donald Trump. That occurs Tuesday mornings Australian time.

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Speaker 2: Mister Biden sees what is likely to be his final

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Speaker 2: opportunity to address the country before he leaves the White

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Speaker 2: House to despite like the accumulation of power and wealth

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Speaker 2: in the US among just a few people, I quote

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Speaker 2: him today in an oligarchy is taking shape in America

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Speaker 2: of extreme wealth, power and influence that literally threatens our

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Speaker 2: entire democracy, our basic rights and freedoms, and a fair

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Speaker 2: shot for everyone to get ahead. He went on to

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Speaker 2: draw attention to a dangerous concentration of power in the

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Speaker 2: hands of a few ultra wealthy people and the dangerous

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Speaker 2: consequences if their abuse of power is left unchecked. Bang,

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Speaker 2: I think he got him. I think God he got there.

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Speaker 1: Yeah, it didn't miss. Now, many of the world's richest

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Speaker 1: economies will need to at least double productivity growth to

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Speaker 1: maintain historical improvements in living standards amid sharp falls in

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Speaker 1: their birth rates. So we need to have more babies

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Speaker 1: or get more productive.

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Speaker 2: Yeah, a bit pointy headed, but very very relevant. Now,

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Speaker 2: what was that TV show? Oh, I'm not going to

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Speaker 2: Handmade's tail? Did you ever see it? And that whole

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Speaker 2: concept of declining birth rates And that's obviously absolutely ultra extreme,

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Speaker 2: but what we're talking has shades of that in it

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Speaker 2: because birth rates are falling. Now. McKinsey report looked at

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Speaker 2: the economic impact of declines in birth rates. It found

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Speaker 2: that the UK, Germany, Japan and the US we'll all

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Speaker 2: have to see productivity rise at double the pace seen

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Speaker 2: over the past decade to maintain the same growth in

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Speaker 2: living standards. Now, in France and Italy it's three times

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Speaker 2: the most recent productivity levels. In Spain it's four times

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Speaker 2: the most recent productivity levels, according to report. In the

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Speaker 2: ft the report basically highlights the impact of declining birth

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Speaker 2: rates in the world's most prosperous economies. It shows that

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Speaker 2: it does leave the declining birth rates leaves them vulnerable

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Speaker 2: to a shrinking proportion of the population of working age.

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Speaker 2: They will actually have to be a lot smarter and

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Speaker 2: work harder to maintain their living standards. Australia's productivity pace

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Speaker 2: will need to increase by about twenty five percent according

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Speaker 2: to the report. Not quite as sort of the prospects

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Speaker 2: aren't quite as bad as some of those European economies

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Speaker 2: in the US, but still we need higher productivity in Australia.

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Speaker 1: There's more babies, Sean, bring more babies, bring back, bring

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Speaker 1: back the baby bonus. Remember the baby bonus scheme? And

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Speaker 1: what did? What did? What was Peter Costello's line one

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Speaker 1: for one for dad and one for the country. Patriotism

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Speaker 1: in the bedroom Sean. Anyway, moving on from that one.

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Speaker 1: At Starbucks, I mentioned this one before. This could be

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Speaker 1: an unpopular move. It's going to require people visiting its

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Speaker 1: coffee shops to buy something in order to stay or

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Speaker 1: to use its toilets. I can't it does make sense, right?

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Speaker 1: I don't know absolutely.

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Speaker 2: What's always amazed me about Starbucks, and particularly if you've

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Speaker 2: gone to Starbucks in the US, people just lounge about

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Speaker 2: the place. What did it? I'm just going to get

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Speaker 2: a Starbucks for a few hours hang out and they

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Speaker 2: used free Yeah, they use the free WiFi and they

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Speaker 2: plug their computers in it, just hang out. They don't

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Speaker 2: seem to be doing anything well when they're not making

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Speaker 2: any purchases, is what I mean. They aren't going to

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Speaker 2: be allowed anymore. The new policy, outlined in a just

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Speaker 2: released code of Conduct, will be enacted later this month.

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Speaker 2: It will apply to all the companies cafes, patios and bathrooms.

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Speaker 2: Good to have a code of conduct on the bathroom.

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Speaker 2: It's a very practical step, right. The idea is that

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Speaker 2: we'll prioritize paying customers who want to sit and enjoy

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Speaker 2: coffees or you need to use bathrooms during their visit.

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Speaker 2: But it does totally reverse a policy that was instituted

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Speaker 2: back in twenty eighteen that said people could use its

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Speaker 2: cafes and bathrooms even if they hadn't bought anything. Well,

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Speaker 2: let's face it, that probably wasn't the best policy ever.

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Speaker 2: Just come and use our stuff.

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Speaker 1: And so I don't know, you wouldn't dream of doing

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Speaker 1: that in a like you wouldn't going into a cafe,

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Speaker 1: would you. No, I'm not talking about kind of a Starbucks,

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Speaker 1: a big global chain but your suburban cafe. You would

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Speaker 1: not dream of going in, sitting down at a table,

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Speaker 1: opening your laptop and not actually buying something.

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Speaker 2: But I wouldn't. I wouldn't use their bathroom unless I

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Speaker 2: bought water or coffee or something or other. Like I'd

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Speaker 2: spend the five bucks just so I can use the bathroom.

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Speaker 1: Yeah, absolutely, anyway. Up next is the Fear and Greed

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Speaker 1: Daily Interview. Your business interview Today Sean is with Ben

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Speaker 1: Gilbert from Jardin All about JB hi FI. Great one

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Speaker 1: for investors. It is coming up in the Fear and

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

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Speaker 1: com dot au. Thank you very much.

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Speaker 2: Good morning, Michael, It's Friday.

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Speaker 1: That sound like a pair of proper gentlemen today. It

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Speaker 1: is Friday, the seventeenth of January twenty twenty five. Make

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

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

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