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Speaker 1: I have an expected inflation figures trigger talks of interest

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Speaker 1: rate hikes in Australia. Star Entertainment gets a Star CEO

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Speaker 1: and is paying big for him.

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Speaker 2: And one of the.

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Speaker 1: Country's most iconic landmarks is up for sale. 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 Thursday, the twenty seventh of

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Speaker 1: June twenty twenty four. Are Michael Thompson and Good morning,

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Speaker 1: Sean Aylmer.

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Speaker 2: Good morning Michael, Sean.

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Speaker 1: The main story this morning. Inflation for the twelve months

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Speaker 1: to the end of May jumped to four percent, way

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Speaker 1: above the Reserve Banks target band, pushing out expectations of

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Speaker 1: an interest rate cut this year and even triggering discussions

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Speaker 1: of a hike in rates.

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Speaker 2: Yes, bad way to end the financial year. Don't you reckon?

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Speaker 1: Oh it is actually it is certainly not what we

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Speaker 1: were hoping for.

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Speaker 2: Certainly those hoping for a reduction in mortgage and credit

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Speaker 2: card rates will be disappointed with the zero point four

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Speaker 2: percentage point increase last month. The Australian Bureau Statistics said

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Speaker 2: there were a number of significant contributors to the annual rise,

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Speaker 2: the highest in six months. Housing was one with friends,

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Speaker 2: up seven point two percent over the year. Electricity was

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Speaker 2: another up to six and a half percent. The jump

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Speaker 2: in energy costs would have been much more but for

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Speaker 2: government rebates. Fruit and vegetable prices also jumped, with increases

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Speaker 2: in grapes, strawberries, blueberries, tomatoes, and capsicans at their highest

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Speaker 2: level in more than a year. The cost of holidays

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Speaker 2: also contributed to the final figure. Petrol prices across the

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Speaker 2: year were up nine percent, though the good news is

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Speaker 2: they were lower in the month of May. That's something

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Speaker 2: I suppose the Bureau said. If you remove the more

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Speaker 2: volatile items from the CPI reading, underlying inflation for the

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Speaker 2: twelve months was four percent lower than the four point

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Speaker 2: one percent the month earlier. It's kind of good news.

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Speaker 2: And the thing is, the Reserve Bank's got a favorite

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Speaker 2: measure at that trimmed mean inflation, it was up four

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Speaker 2: point four percent. No good news there.

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Speaker 1: All right. So what was the response then, from marks

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Speaker 1: and from economists? What are they now saying about interest rates?

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Speaker 2: Ahead of the release? The overwhelming consensus was that the

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Speaker 2: next move in interest rates was down and that will

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Speaker 2: happen either late this year or early next year. Yesterday's

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Speaker 2: figures support the view that rate cuts will at least

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Speaker 2: be pushed out into twenty twenty five at best. Immediately

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Speaker 2: after the eleven thirty AM announcement, bond markets priced in

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Speaker 2: more than a fifty percent chance of a rate hike

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Speaker 2: this year, probably by September. There are now a few

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Speaker 2: market economists around the place. What Deutsche, for example, expecting

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Speaker 2: another rate rise. The Reserve Bank will have the quarterly

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Speaker 2: inflation data out at the end of July next month.

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Speaker 2: That'll come out before its August board meeting. That will

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Speaker 2: be very, very important. A rate hike can't totally be

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Speaker 2: ruled out anymore. Now. There was another interesting aside yesterday

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Speaker 2: the Reserve Bank Assistant Governor Chris Kent was talking. It

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Speaker 2: was ahead of the inflation figures. He suggested the new

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Speaker 2: which took cash rate is three and a half percent.

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Speaker 2: That's the rate with the Central Bank estimates it is

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Speaker 2: neither adding nor subtracting from growth. The cash rate currently

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Speaker 2: is four point three five percent, so it means the

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Speaker 2: bank would have to cut rates by zero point eight

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Speaker 2: five percentage points to get to neutral. Now there's lots

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Speaker 2: of uncertainty around those estimates, but it certainly suggests that

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Speaker 2: there is a bank things that interest rates now truly

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Speaker 2: have put the brakes on the economy.

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Speaker 1: Sean on that We received a question from a listener

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Speaker 1: via Instagram. His name is Ivan, and we're always it's

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Speaker 1: always great to get questioned because I ask you a

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Speaker 1: lot of questions without notice, and sometimes I like to

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Speaker 1: outsource that to other people. And Ivan asked a very

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Speaker 1: interesting question. He says, I don't know if you take questions,

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Speaker 1: but I'm curious. Yes, Ivan, we certainly do, so feel

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Speaker 1: free to send others through. At what point, he says,

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Speaker 1: at what point do we start to consider that maybe

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Speaker 1: interest rates aren't having any ongoing effect on inflation at

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Speaker 1: the moment, since it continues to remain stubbornly high for

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Speaker 1: a whole host of reasons that seem to have nothing

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Speaker 1: to do anymore with household spending.

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Speaker 2: Yeah, I mean there's sort of some truth in that

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Speaker 2: some of the services inflation, so insurance rates really high

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Speaker 2: at the moment. Now that's not just about interest rates,

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Speaker 2: it's about a bunch of other things, including global warming

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Speaker 2: and stuff like that. So there's sort of a sense

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Speaker 2: of truth in it. I think generally their rates do

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Speaker 2: actually affect household spending. We're seeing that in the last

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Speaker 2: week or so. Brands like Massaic brands kmd own if

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Speaker 2: Catmen do a bunch set higher the online luxury brand,

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Speaker 2: they're saying that people aren't spending as much and they're

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Speaker 2: lowering their earnings forecasts as a result. When people don't

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Speaker 2: spend as much at a Catman Do store, for example,

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Speaker 2: cat Men Do don't employ as many people. Those people

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Speaker 2: don't have a job. Therefore they end up spending less

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Speaker 2: and prices definitely come down. So the transmission mechanism works,

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Speaker 2: it just takes some time. When the Reserve Bank was

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Speaker 2: last talking after its last boardermining, it talked about the

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Speaker 2: tight labor market. That's kind of what it was referring to.

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Speaker 2: So I mean there's there's kind of a sense there

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Speaker 2: are some things that interest rates probably just don't affect

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Speaker 2: that much, so Ivan's right, But more generally, I think

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Speaker 2: the market mechanism does work.

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Speaker 1: So broadly speaking, though interest rates have been the thing

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Speaker 1: that's done that they're heavy lifting here to bring inflation

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Speaker 1: back down.

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Speaker 2: Absolutely that there are two main forms of policy to

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Speaker 2: do it. Monetary policy, which is interest rates, and physical policy,

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Speaker 2: which is the government. The government and the state governments

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Speaker 2: have had expansionary budgets, right, so they're not helping monetary policy.

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Speaker 2: If we hadn't had interest rates at four point three

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Speaker 2: five percent, let's say we had them at two percent,

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Speaker 2: we would have much much higher inflation today.

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Speaker 1: Okay, all right, good question Ivan. Thank you for sending

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Speaker 1: it in. And if you'd like to share your own

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Speaker 1: question for me to surprise Sean with, just get in

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Speaker 1: touch by please Instagram or Facebook or LinkedIn. Yes, please

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Speaker 1: do ignore Sean and send your questions. I will be

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Speaker 1: very grateful for them. Local markets, how do they perform? Yesterday?

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Speaker 2: Well, though doing poorly ahead of the inflation number, and

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Speaker 2: then dropped even further to the low for the day.

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Speaker 2: By the close, the SMPISX two hundred had recovered some ground.

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Speaker 2: It finished down zero point seven percent to seven seven

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Speaker 2: hundred and eighty three points. The interesstrate sensitive sectors were

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Speaker 2: hit hardest, led lower by real estate stocks. Center Group

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Speaker 2: fell three percent. Goodman Group was down nearly two percent.

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Speaker 2: The surprise hikeen inflation certainly hit the consumer discretionary stocks.

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Speaker 2: Collins Foods, owner of KFC and tyco Bell fell nearly

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Speaker 2: nine percent. Harvey Norman was off eight percent. Eagers would

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Speaker 2: have made have dropped nearly five percent. Market leader JB

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Speaker 2: high Fire ended down more than three percent. The banks

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Speaker 2: centered lower, with the Commonwealth Bank and A and Z

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Speaker 2: both off one and a half percent. West Farmer's QB

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Speaker 2: South thirty two. They all fell more than two percent.

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Speaker 2: Plenty of stocks going backwards. I suppose the flip side,

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Speaker 2: the energy in tech stocks were probably the ones that

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Speaker 2: did best. Weistech Global was the best of the large caps.

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Speaker 1: All right, what's happening on international markets?

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Speaker 2: Oil prices have risen again, even though figures show a

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Speaker 2: rising stockpile. In the US. Goal's fallen. It's heading back

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Speaker 2: towards twenty three hundred US dollars announced. It's still pretty

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Speaker 2: high by historical standards. Bitcoin has bounced somewhat. It's heading

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Speaker 2: back towards sixty two thousand US dollars a unit. The

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Speaker 2: Aussie dollar appreciated against the US dollar on the back

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Speaker 2: of the infation numbers yesterday. It's almost at sixty seven US.

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Speaker 2: Since Michael one sector, I've just always kept an eye

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Speaker 2: on ever since I did renovations. The lumber sector. I

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Speaker 2: know you're a big fan of lumber prices, Well, they're

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Speaker 2: at their lowest level in more than a year, almost

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Speaker 2: back to pre COVID levels. I of course built or

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Speaker 2: renovated at a time when lumber prices were at record highs.

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Speaker 1: Of course, you you're Sean Ayle there. You seem to

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Speaker 1: time these things spectacularly.

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Speaker 2: Well yeah, yeah, yeah, But basically a slow construction market

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Speaker 2: in the US has not the lumber market around a bit.

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Speaker 2: Prices down about eleven percent over the year. There you go.

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Speaker 2: Do you know where the biggest lumber producers are? Question?

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Speaker 2: Without notice, Michael.

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Speaker 1: You've asked me this one before, I remember, and I

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Speaker 1: embarrassed myself horribly by suggesting that it shouldn't do it

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Speaker 1: again now. But I suggested that it should be Brazil

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Speaker 1: because that's where the Amazon is, and there's plenty of

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Speaker 1: deforestation going on going on in the rainforest. And so

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Speaker 1: that's why I wish you hadn't asked me, and I

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Speaker 1: shouldn't have answered you just then. But where is it?

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Speaker 2: China and the US are the biggest producers, but in

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Speaker 2: terms of exporters, China, Canada and Poland there you go,

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Speaker 2: there you go, and not Brazil, Not Brazil. No.

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Speaker 1: After the show Sean quick mention of the interview you

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Speaker 1: have coming up today. You are speaking with Andrew Gregory,

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Speaker 1: who is the head of Financial Advice and Education at UNISUPER,

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Speaker 1: who is a supporter of this podcast.

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Speaker 2: Yes, I talked to Andrew all about the financial planning industry,

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Speaker 2: the role of financial planners and ways that of making

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Speaker 2: it more affordable for people like you and I to

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Speaker 2: actually access financial planners and get some great advice. We

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Speaker 2: are big fans of financial planners on this show UNI

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Speaker 2: super as a supportive podcast, big fan of financial advisors

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Speaker 2: as well. And what Angrew explains is that not every

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Speaker 2: advisor is the same, so you know, you can get

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Speaker 2: some general advice from one type, it might cost more

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Speaker 2: to get specific advice, but we go through that whole

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Speaker 2: process where super funds are up to with it and

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Speaker 2: also the Governor's Quality of Advice review and what that

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Speaker 2: means for advice plenty in it.

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Speaker 1: Yeah, and especially as we approach the end of the

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Speaker 1: financial year rapidly, it's a very good time to be

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Speaker 1: listening to this because Andrew does have a lot of

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Speaker 1: very worthwhile things, not just for punters like you and me, Sean,

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Speaker 1: but for small businesses and the like as well. We

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

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Speaker 1: the day's business news. Sean Julian Assan is a free

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Speaker 1: man and arrived in Australia last night after pleading guilty

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Speaker 1: in a US courtroom to publishing military secrets.

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Speaker 2: It ends a fourteen years saga for the founder of

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Speaker 2: a Week Leaks, one that included seven years in the

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Speaker 2: Ecuadorian embassy in London, five years at a maximum security

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Speaker 2: prison in the UK. United States Ambassador to Australia, Caroline Kennedy,

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Speaker 2: thanked the Australian government for its cooperation in bringing mister

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Speaker 2: Assange's difficult legal saga to a resolution. Prime Minister Anthony

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Speaker 2: Albernez He said the case dragged on for too long

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Speaker 2: and the breakthrough in US courts was a result of

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Speaker 2: considered patient work. He said, regardless of people's views on

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Speaker 2: mister Assange's activities, his case had dragged on for too

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Speaker 2: long and there was nothing to be gained from his

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Speaker 2: continued incarceration. Now, Michael, as you know in our newsletter,

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Speaker 2: I talk about this particular issue and it really has

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Speaker 2: me flu mixed, shall we say? Yeah?

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Speaker 1: Absolutely? I think in your reference to the new York

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Speaker 1: Times as well, and the motto of The New York

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Speaker 1: Times in yesterday's newsletter. I thought it was really, really interesting.

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Speaker 1: And if you haven't signed up for the news that

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Speaker 1: I had along with Fear and Greed dot com au,

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Speaker 1: it comes out every Wednesday morning, So you are just

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Speaker 1: a wee bit late for this week's edition, but you

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Speaker 1: will be very very early for next weeks. And who

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Speaker 1: doesn't like being early?

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Speaker 2: That's true? Sign up now.

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Speaker 1: Indeed now, Suan, the former boss of lend Lease and

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Speaker 1: Crown Resorts, has signed up to be chief executive of

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Speaker 1: Star Entertainment, and he could be paid very handsomely for

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Speaker 1: doing so.

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Speaker 2: Yes, Steve McCann will receive a sign on bonus of

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Speaker 2: two and a half million dollars and could earn four

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Speaker 2: times that if he can overhaul the company's culture and

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Speaker 2: immediately implement a remediation program for the gaming group in

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Speaker 2: a poor market, Star's share price was flat. Mister mccannren

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Speaker 2: Crown from June twenty twenty one and is considered an

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Speaker 2: architect of the deal with Blackstone, which ended up buying

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Speaker 2: Crown for eight point nine billion dollars. He was previously

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Speaker 2: chief executive of lend Le's a role he held for

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Speaker 2: nearly thirteen years now. His paypacket is very, very very

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Speaker 2: large for a one point five billion dollar company. But

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Speaker 2: the Sydney based gaming group is shall we say desperate.

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Speaker 2: It's earnings of poor premium gamblers are staying away. We

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Speaker 2: found that out this week and it faces the prospect

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Speaker 2: of running its casinos with continued hands on oversight from

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Speaker 2: regulators that it would actually be the good case scenario

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Speaker 2: for Star Entertainment. Steve McCann shareholders sink is a man

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Speaker 2: for the job. Good luck to whin.

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Speaker 1: Yeah. It seems that they think that if anyone can

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Speaker 1: do it, he can.

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Speaker 2: Nice Nice Michael, I got it.

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Speaker 1: Did I like that?

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Speaker 2: Yeah? Yeah, yeah.

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Speaker 1: I didn't know whether I should be like he McCann.

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Speaker 1: Maybe I should have done that. Let me try that

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Speaker 1: one more time, if anyone can, he McCann. There we go.

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Speaker 1: I don't know it's any better the second time. Let's

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Speaker 1: move on. Australians are leaving the mortgage market in unusually

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Speaker 1: large numbers, presumably due to ongoing high interest rates, while

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Speaker 1: those with mortgages SEAN are increasingly taking advantage of offset accounts.

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Speaker 2: That's the findings of the Reserve Bank, which has been

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Speaker 2: looking at the mortgage this charge rate, which measures people

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Speaker 2: either paying off their homes or getting out of the market,

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Speaker 2: it's running at about forty billion dollars per quarter. The

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Speaker 2: amount of new loans is running about eighty billion dollars

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Speaker 2: per quarter. So there's this thing called the ratio of

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Speaker 2: discharge to new loans for eighty fifty percent. That's at

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Speaker 2: its highest level since at least two thousand and nine,

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Speaker 2: the Reserve Bank says, put it at that. Altogether, the

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Speaker 2: figures suggest that highly leveraged investors and homeowners are selling

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Speaker 2: and on average being replaced by buyers with a larger deposit.

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Speaker 1: A massive day in the media yesterday, seven West Media

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Speaker 1: has announced big changes at the top of the organization

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Speaker 1: as it struggles to turn around its ailing profits.

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Speaker 2: Yeah Sure has the head of sales Kurt Burnett, the

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Speaker 2: marketing chief from Melissa Hopkins, and the sports chief Lewis

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Speaker 2: Martin have all left the company. It follows the departures

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Speaker 2: of Chief executive officer James Warburdon, legal chief Bruce McWilliam

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Speaker 2: and news chief Craig McPherson two months ago. Basically, everyone

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Speaker 2: is out except for former Chief Financial Officer now CEO

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Speaker 2: Jeff Howard. Seven, along with competitor nine Entertainment, is struggling

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Speaker 2: with lower freeoware audiences and a cyclical downturn in ad spend.

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Speaker 2: Unlike nine, however, which of course I owned, Stand seven

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Speaker 2: doesn't have a streaming service to rely upon.

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Speaker 1: Now I mentioned this next one at the top of

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Speaker 1: the show. Shawn Lunar Park in North Sydney, an iconic

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Speaker 1: landmark for the Emerald City, is up for sale for

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Speaker 1: at least seventy million dollars.

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Speaker 2: Yes, this is what you call prime real estate. Fronting

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Speaker 2: the water at Kurabillity, looking across towards the Harbor Bridge,

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Speaker 2: the Opera House the city. The amusement park was opened

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Speaker 2: in nineteen thirty five. It has had many ups and

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Speaker 2: downs since then, the worst of course being a fire

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Speaker 2: on the Ghost Train ride back in nineteen seventy nine.

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Speaker 2: Seven people were killed. Then. The site is Heritage listed

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Speaker 2: and its status as an amusement park is protected by

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Speaker 2: government legislation, so you can't just buy it, knock a

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Speaker 2: down and build apartments. They ain't going to work. Lunar

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Speaker 2: Park has currently seventeen amusement rides. The Coney Island building

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Speaker 2: seven thousand square meters of building floor space and a

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Speaker 2: three hundred and eighty nine space car park. Brookfield, the

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Speaker 2: Canadian manager it owns Lunar Park. It reckons it's spent

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Speaker 2: about forty million dollars over the past four years on

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Speaker 2: it to improve the site to get it ready for sale. Anyway,

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Speaker 2: for seventy million dollars plus, you can have your own

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Speaker 2: landmark in Sydney, Sean.

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Speaker 1: There's been long been talk about Disney coming down under

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Speaker 1: and having a very owned Disneyland or Disney World. You

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Speaker 1: know what I would like to see you can probably

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Speaker 1: get you we go, now, go on. Can't you just

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Speaker 1: imagine the big kind of Lunar Park face with the

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Speaker 1: teeth that a big set of Mickey Mousey is on top.

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Speaker 2: It would be very funny. That's good. It would be iconic.

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Speaker 2: It would absolutely be iconic.

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Speaker 1: I don't think it's going to happen.

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Speaker 2: I don't think it is either. I'd love to see it.

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Speaker 1: International News European Union regulators have charged Microsoft with breaking

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Speaker 1: antitrust rules by bundling its Teams, video conferencing and collaboration

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Speaker 1: software with a suite of other productivity tools. Giving it

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Speaker 1: an unfair advantage over rivals.

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Speaker 2: Now, anything to do with teams, that's bad. I'm more

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Speaker 2: for I'm sorry Microsoft, I'm sure it's great software.

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Speaker 1: It are you just triggered by the noise of kind

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Speaker 1: of a team's call.

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Speaker 2: What I think it is is that I have four teams,

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Speaker 2: so I'm in my for a bunch of different businesses,

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Speaker 2: and I'm always in the wrong one trying to get

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Speaker 2: to the like I might be in one of my

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Speaker 2: content sort of I've blogged on as my content business

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Speaker 2: whilst trying to talk to you on fear and greed,

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Speaker 2: and it causes me no end of hassle.

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Speaker 1: Yeah, and then kind of combined with your natural tech challenges,

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Speaker 1: like it's.

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Speaker 2: Just that's right, that's right, put it all together. Ye

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Speaker 2: oh my god. Anyway, Regulators said Microsoft's packaging of teams

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Speaker 2: with other well established software tools in Office three six

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Speaker 2: five and Microsoft three six five includes stuff like word Excel,

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Speaker 2: PowerPoint Outlook, amounts to an illegal abuse of market dominance

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Speaker 2: that rival companies like Zoom and Slack can't match. According

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Speaker 2: to a report of The New York Times, regulators said

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Speaker 2: businesses essentially had little choice but to take teams if

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Speaker 2: they wanted other software made by Microsoft. The charges are

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Speaker 2: the latest in a barrach of announcements by the European

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Speaker 2: Union in recent months in its effort to crack down

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Speaker 2: on the world's largest tech platforms. Of course, earlier in

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Speaker 2: the week, regulators accused Apple of violating competition rules because

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Speaker 2: of its app store policies. Amazon, Google, Meta, TikTok, and

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Speaker 2: x are also facing investigations related to their business practices

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Speaker 2: and services. Microsoft's now being caught up. It really is

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Speaker 2: European regulators via the Tech World.

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Speaker 1: Shown the world is heading for food wars as geopolitical

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Speaker 1: tensions and climate change push countries into conflict over waning supplies.

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Speaker 1: According to one of the world's largest agricultural commodity traders.

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Speaker 2: Sunny Vagays, the boss of Olum Group, one of the

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Speaker 2: world's biggest agricultural trading houses, said many wars have been

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Speaker 2: fought over oil, but there will be bigger wars over

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Speaker 2: food and water. He warned that trade barriers imposed by

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Speaker 2: governments seeking to shore up domestic food stocks had exacerbated

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Speaker 2: food inflation. Now this is all in report in the

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Speaker 2: Financial Times. A proliferation of non tariff trade barriers in

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Speaker 2: twenty twenty two, for Gaycy estimates about twelve hundred and

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Speaker 2: sixty six trade barriers from one hundred and fifty four

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Speaker 2: countries had created an exaggerated demand supply and balance. Wealthier

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Speaker 2: countries were building on surpluses of strategic commodities, leading to

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Speaker 2: exaggerated demand and in turn high prices.

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Speaker 1: Sawn last one, German car making giant Volkswagen will invest

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Speaker 1: up to five billion US dollars in a joint venture

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Speaker 1: with US based evmaker Rivian.

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Speaker 2: Rivian is a rival to teslaher and its share price

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Speaker 2: jumped almost fifty percent after the announcement. The two companies

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Speaker 2: have agreed to share technology. Founded in two thousand and nine,

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Speaker 2: Rivian has not yet made a quarterly profit. According to

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Speaker 2: a report on the BBC. Foals Wagen has come under

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Speaker 2: pressure itself from rivals like Tesla and China's Byd as

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Speaker 2: it tries to make the shift from fossil fuel powered

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Speaker 2: vehicles to electric vehicles. Separately, this week, Tesla said it

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Speaker 2: would recall most of its eleven thousand cyber trucks sold

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Speaker 2: in the US over issues with their windscreen, wipers and

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Speaker 2: exterior trim.

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Speaker 1: Hang on, soorry, you've seen the cyber trucks.

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Speaker 2: They are a unit of They are a unit.

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Speaker 1: They are and haven't they got like kind of almost

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Speaker 1: bulletproof glass. Remember they can throw things at it and

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Speaker 1: it doesn't break. Yet they're being recalled for the windscreen wipers.

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Speaker 2: Yeah, very important if it's raining, Michael, No one's laughing

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Speaker 2: at that, am I not? Oh?

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Speaker 1: Goodness?

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Speaker 2: Man?

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Speaker 1: All right, okay. Up next is the Fear and Greed

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Speaker 1: Daily Interview. You're speaking today with Andrew Gregory, head of

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Speaker 1: Financial Advice and Education at unisuper all.

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Speaker 2: About the role of financial advisors and hay King access

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Speaker 2: financial advice without having to go through a very very

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Speaker 2: expensive process. We also talk a lot about the future

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Speaker 2: of financial advice. It's great chat.

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Speaker 1: Yeah, it is up next in the Fear and Greed

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

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Speaker 1: dot au. And don't forget to check out the new

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Speaker 1: episode of How Do They Afford That which came out yesterday,

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Speaker 1: all about whether it is worth joining and investor club.

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Speaker 1: Should you kind of join up with other people and

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Speaker 1: pull your money and talk about what companies to invest in?

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Speaker 1: All that kind of thing. It is a really good one.

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Speaker 1: You'll find that wherever you listen to podcasts. I'll put

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Speaker 1: a link in today's show notes as well.

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Speaker 2: Thank you Sean, Thank you Michael.

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Speaker 1: It's Thursday, the twenty seventh of June twenty twenty four.

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

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

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Speaker 1: And that was fear and greed. Have a great day.