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Speaker 1: Welcome to Fear and Greed Q and A, where we

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Speaker 1: ask and answer questions about business, investing, economics, politics and more.

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Speaker 1: A'm Michael Thompson and Hello Sean Aylmer.

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Speaker 2: Hello Michael, Sean.

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Speaker 1: Today's question kind of combines a few of those areas, really,

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Speaker 1: because we have had in recent days the ASX hitting

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Speaker 1: all time highs. Why when you consider the facts that

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Speaker 1: we've got tariffs being imposed and all kinds of turmoil,

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Speaker 1: we have the economy fairly sluggish and interest rate cuts

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Speaker 1: imminent in order to stimulate the economy, why is the

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Speaker 1: market going so well? Yes, very good question, well asked,

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Speaker 1: well asked up front. We are not an investing podcast,

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Speaker 1: so if you're going to invest, get some advice.

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Speaker 2: What you find. Michael, I think I've taught you this

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Speaker 2: many times out of the last five years, so you

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Speaker 2: don't seem to have remembered it. Your question this one

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Speaker 2: you've forgotten issue the idea the market trades on expectations

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Speaker 2: of profits. So everything you have said is right. We

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Speaker 2: are in a slow down at the moment. We have

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Speaker 2: tariff issues, geopolitical issues, but the fact that we think

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Speaker 2: interest rates are going to fall encourages investors. Because they think, ah, well,

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Speaker 2: if i'm you know, stocks like JB High five, people

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Speaker 2: will spend more with lower interest rates. Therefore that's a

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Speaker 2: good stock to buy, Holt to buy. I use that deliberately,

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Speaker 2: Harvy Norman I could have used as well, because they're

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Speaker 2: actually doing really well at the moment those stocks on

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Speaker 2: the expectations that lower interest rate cuts means people will

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Speaker 2: go out and buy a computer or a phone, or

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Speaker 2: replace the stuff that they brought in COVID with their money,

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Speaker 2: and they'll go out and spend more money replacing that

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Speaker 2: sort of stuff. So it's about future earnings, is the

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Speaker 2: short answer.

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Speaker 1: But doesn't the turmoil and the potential for tariffs, for instance,

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Speaker 1: to hit companies and create more uncertainty for them. Doesn't

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Speaker 1: that then potentially affect their future earnings and kind of

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Speaker 1: negate the positive effect of lower interest rates locally.

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Speaker 2: Yes, so it does to some extent, but not much

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Speaker 2: in Australia. Okay, tarif's are only ten percent. We're talking

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Speaker 2: about gold, beef products, pharmaceutical products, not that much else,

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Speaker 2: to be perfectly honest, Sure, and in fact we may

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Speaker 2: benefit in some ways because you know, China's trying to

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Speaker 2: sell stuff the US and it's got a whatever cent tariff,

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Speaker 2: twenty five percent tariff. Maybe they'll sell it to Australia.

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Speaker 2: More broadly, like just getting away from those consumer cyclicals,

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Speaker 2: what we have seen in recent times are some really

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Speaker 2: strong performances. We've talked about TILSTRA doing really well. So

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Speaker 2: last year was all about the banks. Now the banks

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Speaker 2: have definitely come off, but the big miners have done

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Speaker 2: really well. The energy companies, Woodside, Santas, some of those

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Speaker 2: guys have done really well. The utilities companies have done

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Speaker 2: much better than what they've been doing before. The healthcare

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Speaker 2: company see Self it's back, and so what we're found

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Speaker 2: in the market is a much broader range of companies

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Speaker 2: doing better. Notwithstanding the banks have come off, and that

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Speaker 2: is all about expectations that the local economy is actually

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Speaker 2: doing pretty well and some will benefit more to be

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Speaker 2: high Fai and Harvey Norman have so far. Others like

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Speaker 2: flight Center have had a shocker, so that's directly affected

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Speaker 2: by travel to Europe and North America and stuff like that.

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Speaker 2: But broadly, people think the future is going to be better.

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Speaker 2: So we're getting the share market at me. We went

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Speaker 2: through eighty eight hundred recently eighty eight hundred. That's unheard

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Speaker 2: of twelve months ago, big big caveat to all this.

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Speaker 2: There are plenty of professional investors out there who reckon

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Speaker 2: the good times can't last. And so the way they

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Speaker 2: put it, they say, you know, in for a rocky period. Yeah, exactly,

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Speaker 2: rocky period.

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Speaker 1: One last question, and we talk about the kind of

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Speaker 1: the global factors affecting this or we touched on the

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Speaker 1: tariffs before. Did we see have we seen in the

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Speaker 1: last couple of weeks a live demonstration of the fact

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Speaker 1: that what happens in China matters a lot more to

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Speaker 1: us than what happens in the US, because we saw

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Speaker 1: with the big dam development that was being announced, the massive,

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Speaker 1: massive project that was being done, we saw a direct

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Speaker 1: kind of flow on effect to Australia because of that.

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Speaker 2: Yes, so it's five dams they're building, They need commodities

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Speaker 2: to build that zero, et cetera. So that flew through

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Speaker 2: to commodity prices, that flows through to Australia. So what

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Speaker 2: happens in China affects US definitely more directly the US

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Speaker 2: tariff stuff. It's about a slow down in global growth,

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Speaker 2: So a slow down and glo global growth hits us,

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Speaker 2: but it's an indirect effect of the tariff as opposed

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Speaker 2: to the direct effect that you're talking about China. But

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Speaker 2: it is really interesting to see if the market can

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Speaker 2: keep doing what it's doing because it is flying and

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Speaker 2: there are Commonwealth Bank. I know it's come off, it's

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Speaker 2: still training at a historically high value based on forecast earnings,

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Speaker 2: and there's a bunch of stocks like that.

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Speaker 1: And that wariness that the good times could kind of

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Speaker 1: come to an end probably means that it's a good

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Speaker 1: time to be getting financial advice, isn't it.

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Speaker 2: Always is a good night. It's always a good time

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Speaker 2: to get financial advice, Michael, certainly always.

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Speaker 1: All right, it's a great question and very well answered.

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Speaker 2: Thank you, Sean. You came up with that question, so

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Speaker 2: I think that's why you think it's a great question.

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Speaker 1: But of course I was trying to be subtle about

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Speaker 1: that one, but you dropped me right in it. Thank

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Speaker 1: you very much.

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Speaker 2: Sure, Thanks Michael.

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Speaker 1: I remember if you got your own question that you

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Speaker 1: would like us to answer, then send it on through

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Speaker 1: via the website go to Fearangreed dot com dot au

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Speaker 1: or any of the social media platforms LinkedIn Facebook, Instagram,

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Speaker 1: or we shall pop it on the list. I'm Michael Thompson,

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Speaker 1: and there's a fear and greed Q and a