ASX tumbles on inflation fears, Mesoblast’s 50pc jump, sashimi for Xmas

Published Dec 19, 2024, 5:00 PM

Friday 20 December 2024

The local share market tumbles as global inflation fears increase. 

And more, including:

  • Bio-pharmaceutical group Mesoblast gets approval for a new drug, sending its share price up 50 per cent in one day. 

  • Don’t be surprised if you see sashimi on the Christmas luncheon table this year, along with prawns and oysters. 

  • Plus international student numbers set to be cut, and Sydney-Melbourne becomes the fifth busiest air route

Plus don’t miss the latest episode of How Do They Afford That? - how to make the most of your Christmas bonus. Get the episode from APPLE, SPOTIFY, or anywhere you listen to podcasts.

Today on Fear and Greed. The local share market tumbles as global inflation fears increase. Biopharmaceutical group Misoblast gets approval for a new drug sending at share price up fifty percent in one day. And don't be surprised if Sashimi ends up on the Christmas luncheon table this year, along with Prawn's and Oysters, plus international student numbers set to be cut, and Sydney to Melbourne becomes the fifth most trafficked air route. Welcome to Fear and Greed. Daily business news for people who make their own decisions. It is Friday, the twentieth of December twenty twenty four. Are Michael Thompson and Good Morning, Sean Aylmer.

Good morning, Michael, Sean.

The main story this morning of the ASX tumbled by as much as two percent yesterday following Wall Street after the US FED downplayed the chances of several rate cuts in the world's largest and most important economy. A very rough day for investors, with all eleven sub indices ending lower. The tech stocks were hit hardest. The proverbial sea of red Michael see of red, Oh dear, that's just that's not what you want. To see is it. And it is like you watch the news, you watch the TV news last night, and it was just a guarantee just read everywhere. It's a very visual thing.

It is. It began on Wall Street when the US Federal Reserve cut the official interest rate by zero point two five percentage points, but said two further cuts rather than four are likely next year chairs your own pal. So the Fed was going to be more cautious in the future, and that sent the S and P five hundred doubling three percent. The point here, maybe inflation hasn't quite been slayed as we thought. The reaction locally was swift, with US focused companies or companies that have lots of earnings out of the US getting hit hardest. James Hardy Industries, for example, that tumbled more than five percent, Medicus was down about six percent, Zipco fell about ten percent, and Quantus was off four percent. By the close, the market was down one point seven percent. That's the overall market, to eighty one hundred and sixty eight points. Jean.

It wasn't just equity markets that got hit yesterday. It was really it seemed to be a fairly comprehensive blood.

Bath, A very comprehensive blood bath.

Another graphic image, wasn't it.

Yeah, yeah it was, But that's right. The Ausie dollars certainly felt it, tumbling to just below sixty two US cents at one point. Its most recent low is sixty one point sixty nine US cents during COVID. Yesterday's move is very much in the back of a jump in the US dollars. Traders when they are fearful by US dollars, so everything else. Bitcoin also fell back towards one hundred thousand US dollars a unit on all futures dropped towards one hundred US dollars a ton. Gold was lower. Also. The Bank of England came out and it's made similar comments to the FED, dousing expectations of big, great cuts in that economy. You know who's looking pretty good here at the moment as a result of all this.

Is it the Reserve Bank?

It is? It is. They've been criticized for not doing anything on raids. Everyone else has been cutting, we haven't. And when you see what's happened in the US and in England, you think maybe they just jumped a bit too early. Maybe the Reserve Bank's got it right.

Suddenly Michelle Bullock is looking more like Nostradamis.

She would be insulted by That's She's got a great sense of human Michelle Bullock a lovely person, but I don't think she wants to be called Nostra Damas.

Okay, all right, Look just a quick mention, Sean, while we are talking about the Reserve Bank and what is happening elsewhere in the world. Your interview that's coming up after the show today, you are talking to Charrell Murphy e wis, Chief Economist.

It's a great chat with cherrelle about where we're up to as we end twenty twenty four, particularly around government spending and does it actually matter that we've got these huge defforts that's coming, how do we pay it back? I think it is kind of one of the more insightful economic commentaries we've had all year, because she really does lay down just where we are and why deficits matter.

Yeah, it's a really interesting conversation. It is coming up after the show, so stick around for that one, Sean. We talked about all the companies and the sectors that have been hit. One company that didn't fall yesterday was miso Blast, it went the other way. Its share price jumped fifty percent in one day.

In fact, by the close it was fifty four percent. Quite extraordinary. The US Federal Drug Administration gave the green light to Miso blasts sell therapy treatment. Right console, it'll be used to treat children for a life threatening complication that can occur during bone marrow transplants. Now, that hasn't been a treatment for this ever, and there's about fifteen hundred children receive a bone marrow transplant each year in the US, most of them are at high risk of this comple location. In January, the FDA recognized miso Blast cell therapy rever score. I'm going to get that wrong, but rev score that treats heart disease in newborn babies. The company's share price is up nearly nine hundred percent this year, easily the best of the top two hundred. It's now worth three point two billion dollars. Fantastic to see a pharmaceutical and Australian biopharmaceutical company doing so well in creating new technologies and treatments, particularly for kids.

Yeah, absolutely, any other corporate stories to get across to that. I know that just feels like such an open ended question, and it is high risk because it.

Just gives you. You've greenlighted me.

Yep, just go for it. You've got forty seconds to squeeze a few in right instact. Pivot pasted a net loss of three hundred and eleven million dollars for the twenty twenty four financial year, down from five to sixty million in net profit the prior year. That was on the back of the right down the value of two major plants. Its share price fell about three percent. Yesterday, Woodside Energy in Chevron struck a deal which we'll see the Australian company exit the thirty four billion at US dollar Wheatstone llenng venture. Chevron will play Woodside up to four hundred million US in cash as part of that transaction, and AGL Energy will pay out twenty five million dollars in penalties after a court ruled the company had failed to notify and refund approximately five hundred customers within the required time frame for center pay payments. It was like a forty one seconds. You're I think very good at that very precise Sean. We'll take a quick break before we do that. I just want to mention some of the episodes that we've got coming up over the next couple of weeks. We've got essentially something pretty special. We've got two episodes every day, one morning, one afternoon. It is part of a special Fear and Greed Summer investing series. So from Monday, twice a day, all new episodes, including interviews with some of Australia's best investors telling us the stocks they're watching, the trends, to keep an eye on alternative investments, property as well. We're covering everything and next week as well as you and me and our colleague Adam Lang taking a look at the biggest and best stories of the year as well. So we've got some terrific listening lined up for you over the next few weeks. In the meantime, Sean, though we've still got a bit we've got to get through today. We'll be back in a moment with the rest of the day's business news. Sean international student numbers will be cut after budget figures released earlier in the week show that the government is failing to meet its goal of lower migration.

Home Affairs Minister Tony Burke will sign a new ministerial direction allowing the government to slow visa processing and limit the number of international students and university can roll. The order will replace the existing Ministerial Direction one oh seven. We spoke a lot about that during the year and effectively introduced as measures that would have been legislated had the Coalition not opposed to bill in Parliament capping international students. Education Minister Jason Claire said the new direction would be fairer for regional and out of metropolitan universities, as well as takes. Under Ministerial Direction one oh seven, lower risk universities, including the major Group of eight institutions, were given priority in a bid to tweed out less ethical providers and education agents. I suppose they were kind of luring students who were unable to support themselves, but they were getting paid as a result of it. Anyway, this new ministerial direction will replace that one.

Sean A and Z held its annual general meeting yesterday and investors are not happy, with around thirty eight percent of shareholders voting against the bank's remuneration report.

Outgoing chief executive Shane Elliott also voluntarily gave up three point two million dollars in bonuses on the back of the scandal around the bank's trading flaws, which are now part of a regular Trey investigation into market manipulation. The allegations are that traders manipulated are four billion dollar federal government bondishuans to benefit themselves in the bank, pushing up borrowing costs. That has really I mean, there was a lot of angst at the annual general meeting yesterday, with shareholders getting very vocal about what was going on there. Now. Last week mister Elliot said he would step down next year. Portuguese banker Nuno Martos will take the top job. They didn't have to vote on his bonus yesterday because he gave it up voluntarily. As it turned out, based on proxies, it probably would have passed. He probably would have got the bonus, but probably I don't know. It's very decent, but he sort of stood up and said I won't take that money. The first strike against ain Z's rem report hasn't happened since twenty eighteen. That's the last time they had first strike. Another one next year means the board will spill and directors will have to be revoted.

In seems quite the honorable thing to do. Isn't it and then three point two millions a lot of money. That's a lot of money. And afterwards and they see that it might have passed anyways, mind.

Yes, that's right, yeah yeah, yeah yeah.

Anyway, So on, Australian officials have helped nearly one hundred and fifty citizens get home from Vanuatu overnight, as a Pacific island continues to deal with the aftermath of two very significant serious earthquakes.

Australian citizens were assisted home on Royal Australian Air Force flights which had been sent as a humanitarian mission. On Wednesday, A sixty four person disastrous distance response team from Australia is on the ground in Vanuatu. The team includes Queensland's fire and rescue personnel and canine teams, as well as doctors, paramedics, engineers and communications technicians. The seven point three magnitude earthquake struck on Tuesday, killing fourteen in injuring hundreds and.

The Albanese government will reopen Australia's embassy in the Ukrainian capital Kiev.

They will Foreign Minister Pennywong traveled to Ukraine and visited the site of the embassy, which was evacuated by the former coalition government in early twenty twenty two, shortly after Russia's February twenty four invasion, m Zwong said that from next month Australia's ambassador and Deputy Head of Mission will return to Kiev. MBC staff and activity were relocated to Poland, but that move was only supposed to be temporary. Australia's arrangement became increasingly isolated and unusual as most other countries returned their diplomatic staff to Kiev over the course of twenty twenty two.

Every female employee of BHP and Rio Tinto over the past twenty years will be invited to join class actions alleging sexual harassment. After Brisbane law firm GJA Sadler started legal proceedings last week. Sean GJ Sadler lawyer josh Aylward said he had advised two unnamed women in the filing of two separate claims, one against HP one against Rio. According to a story in The finn Review, the legal action would be run on an opt out basis. That means all women who worked for BHP or Rio since November two thousand and three will be eligible to register for the claim unless they actively choose not to. Mister Aylwood said BHP and REO would be ordered by the court potentially as early as February to contact all former female employees and make them aware of their eligibility. The class action comes two and a half years after West Australian Parliament handed down a bombshell inquiry into sexual harassment at mind Sights. The process for speag miners such as BHP, RIO and Fortescu to reveal dozens of sexual harassment claims made by their staff show in. Australia's Sydney to Melbourne aviation route is once more the fifth busiest in the world according to data group OAG.

And it's a very profitable route too because of these strong corporate demand for flights between Australia's two biggest cities. There were nine point two million seats on the Sydney to Melbourne route in twenty twenty four, compared to the top former was in Korea JJ to Seoul, which had fourteen point two million seats, equating to almost thirty nine thousand daily seats on that Korean route. According to report in The Australian, only two of the top ten routes in the world were outside Asia, Sydney Melbourne being one, Jeda Read being the other that was ranked sixth busiest. Three of the top ten roots were in Japan. OAG expects demand for air travel two remain at pretty high levels. Corporate travel demand will gradually recover and compensate for any loss driven by revenge spend travelers. So we had a big boom after COVID people were traveling all the time. That's coming off a bit, but corporate travel's coming back in Prawn's.

And oysters sean are pretty standard fare at Christmas, but there is a new style of seafood expected on tables next week. Sashimi, kingfish, tuna, Atlantic salmon fish that often feature in traditional Japanese raw seafood platters are in hot demand according to retailers. An AFR report says the Sydney fish market, which is the largest in the country, expects to sell more than three hundred and fifty tons of seafood that's about three and a half blue whales in thirty six hours around the clock, trading between Christmas up until Christmas morning. It includes one hundred and twenty tons of prawns close to seventy thousand dozen oysters and more and more sashimi or fishes like kingfish tuneor Atlantic salmon. They go to sashimi.

One traditional looking popular once again, Michael is he Christmas pudding? Apparently David Jones is reporting a bounce back in sales of Christmas puddings. There you go.

Do you do a Christmas pudding?

Sean always? I have a brandy butter, which my grandmother and my mother, and now I like to think I've taken the mantle. And this weekend, in fact, I'm traveling out to Orange where my mum lives. I'm going to have a Christmas lunch and I will be doing the brandy butter.

That is amazing, It is delicious. Do you ever put coins into your Christmas point?

Oh it's a very old world. Yeah did that they were? Was it copper coins? Yeah? The penny farthings and sort of before my time, believe it or not, they were safe to put in the Christmas pudding, isn't it now that the lead and the coins that you have now, yeah, very dangerous. I wouldn't recommend it. Ah, Okay, your family still do it?

Well, my father in law does it every year, still loads all of these coins in, so maybe just gradually everyone for Christmas, everybody gets a blood test. What the lead levels are at? Goodness me?

All right? Good to know.

International news now show on New Zealand is in recession after the economy contracted much more than expected in the third quarter and the second quarter was revised lower.

Gross domestic product declined one percent from the previous quarter, when it fell a revised one point one percent. Now GDP is about one and a half percent lower than year earlier, much much more than expected, much worse than expected. The New Zealand dollar dropped a quarter of a usent after the report. We talk about our Aussie dollar being sixty two since the Kiwi dollars about fifty six US. Since the economy's forecast to recover over twenty twenty five, now that the Reserve Bank has started to cut interest rates, consumer conference is rebounding, but that the nation is officially in recession.

The US government could shut down within days, shown after Donald Trump appeared to kill a bipartisan funding bill's chance of passing through Congress. This does feel like an annual thing, now, doesn't it? That there's a government shut down in the US.

What's scary about this, though, is that the agreement was already done. There was deal done between House Republicans and Democrats. Donald Trump lashed out at it. The funding actually runs out tonight, so close of business Friday US time, which is tonight our time. Trump came out, he urged his allies on Capitol Hill to reject the foolish, and he napped compromise. Hours later, leading Republicans ditched the legislation. House Speaker Mike Johnson opted not to risk Trump's anger by calling a vote on the measure in the chamber. Steve Scalacy, another senior House Republicans, led late on Wednesday that the bill was dead. This dramatic collapse of the bipartisan deal just two days before the deadline just shows how influential Trump is. I mean, he was on social media. He was saying things like the only way to secure a deal would be to stop gap funding than in capitals without Democrat giveaways, combined with an increase in the debt ceiling, etc. Etc. Incredibly influential already Donald Trump.

And fantastic use of all caps in his social media posts.

Yeah, no, one does it better?

No, certainly okay. Up next, John is the Fear and Greed Daily Interview. Your guest today Charelle Murphy, chief economist from EY. It's coming up next in the Fear and Greed playlist on your podcast platform or at Fearangreed dot com dot au. Thank you very much, Sean, Thank you, Michael. It is Friday, the twentieth of December twenty twenty four. Make sure you're following the podcast and please join us online on LinkedIn, Instagram, x TikTok and Facebook.

Michael Thompson. That was Fear and Greed.

Have a great day.