Welcome to the Fear and Greed Business Interview. I'm Suan Alma. There was carnage on the ax yesterday. Is global financial markets reeled from last week's tariff announcement by US President Donald Trump? How much further will the market fall? Maybe it'll bounce. Where are the safe havens? Where are the opportunities for investors? Remember this is general information only and you should seek professional advice before making investment decisions. Ben Gilbert is head of Australian Research at Jardin, leading their research team and consumer sector coverage. Ben, Welcome back to Fearing Greed.

Welcome to the Fear and Greed Business Interview. I'm Suan Alma. There was carnage on the ax yesterday. Is global financial markets reeled from last week's tariff announcement by US President Donald Trump? How much further will the market fall? Maybe it'll bounce. Where are the safe havens? Where are the opportunities for investors? Remember this is general information only and you should seek professional advice before making investment decisions. Ben Gilbert is head of Australian Research at Jardin, leading their research team and consumer sector coverage. Ben, Welcome back to Fearing Greed.

Thanks Sean, thanks for having me. Interesting times.

Thanks Sean, thanks for having me. Interesting times.

Interesting times. I mean that's first few minutes yesterday morning. Monday morning, it was down six percent. It ended kind of closer to four percent down or something. But really has been a pretty horrendous couple of sessions.

Interesting times. I mean that's first few minutes yesterday morning. Monday morning, it was down six percent. It ended kind of closer to four percent down or something. But really has been a pretty horrendous couple of sessions.

It has. Look I think, ultimately, uncertainty is never anyone's friend. And look at the moment. Anyone who sort of says I know where it's going tomorrow or next week or next month, I think ultimately doesn't know. I think what we've got to do is get the information as to come to us at the moment, and so to take a bit of a longer term lens and sort of hopefully as we look forward, we'll get some increased confidence in terms of where we're going. And ultimately I think that's what we need, some confidence and increased certainty. What I would say though, is typically if we look back over the last fifteen, twenty thirty years, is that you have these multiple down periods or down days and often present some pretty material opportunities as we look forward.

It has. Look I think, ultimately, uncertainty is never anyone's friend. And look at the moment. Anyone who sort of says I know where it's going tomorrow or next week or next month, I think ultimately doesn't know. I think what we've got to do is get the information as to come to us at the moment, and so to take a bit of a longer term lens and sort of hopefully as we look forward, we'll get some increased confidence in terms of where we're going. And ultimately I think that's what we need, some confidence and increased certainty. What I would say though, is typically if we look back over the last fifteen, twenty thirty years, is that you have these multiple down periods or down days and often present some pretty material opportunities as we look forward.

Okay, I just want to focus on the uncertainty factor. It seems that that's what rattles markets more than anything. Even bad policy, markets work their way around that. It's just when you don't know what the policy is. And a great example was Nike last year. Weeks sold off enormously and then Donald Trump spoke to the leader of Vietnam, where Nike manufacturers a lot of their shoes. Nike rebounds. It's kind of that uncertainty, isn't it. That's the enemy.

Okay, I just want to focus on the uncertainty factor. It seems that that's what rattles markets more than anything. Even bad policy, markets work their way around that. It's just when you don't know what the policy is. And a great example was Nike last year. Weeks sold off enormously and then Donald Trump spoke to the leader of Vietnam, where Nike manufacturers a lot of their shoes. Nike rebounds. It's kind of that uncertainty, isn't it. That's the enemy.

It is, And I think no one wants to lose money. And I think if you've got risk, you've got to wiegh up risk reward. And you used a Nike example obviously, as you said, produce an anormous amount of product in Vietnam. You get a bit more confidence around it and you can start thinking, okay, well this is a risk reward profile. This is how we think about it could mean they need to put prices up X versus Y, and that's I think where we need to look to. And look, there's more news coming out you see, like yesterday afternoon. Also you saw China sort have talked about potentially bringing forward some of the stimulus measures that they talked to. Well, that could actually be quite positive. China's obviously a big training partner of Australia. You saw the currency bounce. So as people start to get some confidence or some understanding where we're heading, hopefully that should provide some reprieve and a baseline for markets. But that said, look, I think until we get some clarity around this, and it's obviously it's global in terms of the implications around trade, it's going to probably take some while to play out.

It is, And I think no one wants to lose money. And I think if you've got risk, you've got to wiegh up risk reward. And you used a Nike example obviously, as you said, produce an anormous amount of product in Vietnam. You get a bit more confidence around it and you can start thinking, okay, well this is a risk reward profile. This is how we think about it could mean they need to put prices up X versus Y, and that's I think where we need to look to. And look, there's more news coming out you see, like yesterday afternoon. Also you saw China sort have talked about potentially bringing forward some of the stimulus measures that they talked to. Well, that could actually be quite positive. China's obviously a big training partner of Australia. You saw the currency bounce. So as people start to get some confidence or some understanding where we're heading, hopefully that should provide some reprieve and a baseline for markets. But that said, look, I think until we get some clarity around this, and it's obviously it's global in terms of the implications around trade, it's going to probably take some while to play out.

Before we talk about opportunities. You, as a consumer sector man, must be very habit. When we've spoken to you about some of the consumer staple stocks and in this times of carnage, they've done pretty well.

Before we talk about opportunities. You, as a consumer sector man, must be very habit. When we've spoken to you about some of the consumer staple stocks and in this times of carnage, they've done pretty well.

Yeah, look they have in recent days and look, ultimately the staples should be better positioned. But that's it. I don't I don't think we should discount that potentially as could just be broadly positive for the Australian consumer. And I don't know if it's going to necessarily be as negative more broadly for Australia as the markets might be implying at the moment. And the reason I say that is is that, yes, we're a reasonable trading partner with the US, but if you look at exports out of beef and steel and a few other things, it's not overly material. What we want to see is strengthen opportunities out of some of the bigger trading partners, people like China. And if you look at what's happening with China at the moment, look obviously a big trading partner with the US, but at the same time, if you get more capacity in that market, because that the mean we can purchase products into Australia little bit more cheaply, obviously source a lot out it there. Similarly, if there's significant stimulus in China or pull forward and it tries to stimulate things like housing, et cetera. Is that going to be more positive for our own by and or exports, which is obviously good for our national accounts. Similar it's good for the currency from an fix standpoint, that might see inflation come back if earlier you look at rates at the moment the market's now pricing in I think at seventy percent chance for a couple of rate cuts by May and multiple breakouts by the end of the year. Is that good for housing, good for disposable income. So it's not all bad. But I think as you say, it's ultimately it's uncertainty at the moment.

Yeah, look they have in recent days and look, ultimately the staples should be better positioned. But that's it. I don't I don't think we should discount that potentially as could just be broadly positive for the Australian consumer. And I don't know if it's going to necessarily be as negative more broadly for Australia as the markets might be implying at the moment. And the reason I say that is is that, yes, we're a reasonable trading partner with the US, but if you look at exports out of beef and steel and a few other things, it's not overly material. What we want to see is strengthen opportunities out of some of the bigger trading partners, people like China. And if you look at what's happening with China at the moment, look obviously a big trading partner with the US, but at the same time, if you get more capacity in that market, because that the mean we can purchase products into Australia little bit more cheaply, obviously source a lot out it there. Similarly, if there's significant stimulus in China or pull forward and it tries to stimulate things like housing, et cetera. Is that going to be more positive for our own by and or exports, which is obviously good for our national accounts. Similar it's good for the currency from an fix standpoint, that might see inflation come back if earlier you look at rates at the moment the market's now pricing in I think at seventy percent chance for a couple of rate cuts by May and multiple breakouts by the end of the year. Is that good for housing, good for disposable income. So it's not all bad. But I think as you say, it's ultimately it's uncertainty at the moment.

What about the market itself? Do you expect it to fall much further? Is that too much crystal ball gazing?

What about the market itself? Do you expect it to fall much further? Is that too much crystal ball gazing?

Well, I think it's a lot of crystal ball gazing. I think one thing we can probably say with some level of certainty it should be higher again in the foreseeable future, because these big corrections typically get met with some pretty significant upturns. You look at it. I remember, look we look back at COVID. You move through that and there was some pretty material down days. But as we started to get some understanding what was actually happening in the government stepped in provided some stimulus that the market's rallied. Similarly with the GFC. When you start moving through and you get ideas around where the government is going to step in give the market more confidence, stocks can rally pretty hard. The good thing we've gotten today is that we don't necessarily have a lot of balance sheet across Australian companies, so typically in good, good positions. And maybe we do get some rate reprieve, which is obviously looking more likely, it's going to be positive for willingness to come through and spend money. We've also had a couple of corporate actions or corporate activity happening as well, so not all share prices are down, albeit the vast majority are.

Well, I think it's a lot of crystal ball gazing. I think one thing we can probably say with some level of certainty it should be higher again in the foreseeable future, because these big corrections typically get met with some pretty significant upturns. You look at it. I remember, look we look back at COVID. You move through that and there was some pretty material down days. But as we started to get some understanding what was actually happening in the government stepped in provided some stimulus that the market's rallied. Similarly with the GFC. When you start moving through and you get ideas around where the government is going to step in give the market more confidence, stocks can rally pretty hard. The good thing we've gotten today is that we don't necessarily have a lot of balance sheet across Australian companies, so typically in good, good positions. And maybe we do get some rate reprieve, which is obviously looking more likely, it's going to be positive for willingness to come through and spend money. We've also had a couple of corporate actions or corporate activity happening as well, so not all share prices are down, albeit the vast majority are.

Stay with me, Ben, we'll be back in a minute.

Stay with me, Ben, we'll be back in a minute.

I'm speaking to Ben Gilbert. Head of Australian Research at Jarden. Okay, let's talk a little bit stock specific. So if we go into the consumer sector and some of the retailers, where do you see some opportunities given what's happened and with the big big caveat that, you know we're in very volatile times here, so stick to your investment strategy. Think long and hard about what you're doing. And, Fear and Greed, we are not a financial planning podcast, so you know, make sure you go and get some advice. But Ben, from your point of view, where are the opportunities?

I'm speaking to Ben Gilbert. Head of Australian Research at Jarden. Okay, let's talk a little bit stock specific. So if we go into the consumer sector and some of the retailers, where do you see some opportunities given what's happened and with the big big caveat that, you know we're in very volatile times here, so stick to your investment strategy. Think long and hard about what you're doing. And, Fear and Greed, we are not a financial planning podcast, so you know, make sure you go and get some advice. But Ben, from your point of view, where are the opportunities?

Look, I think in this situation, this scenario, we like companies that have built sort of genuine longer term moats. The category killers have opportunities to win share, opportunities to grow share of wallet, and ultimately opportunities to outperform other market with respect to their earnings. Companies that you can sort of put in those sorts of boats is you'd sort of argue Woolworths with its data capability. You look at some of the other companies out there, sort of companies like Jbhi Fi, which is obviously proven to be a great category killer. You look at companies like Wesfarmers in terms of what they're doing. I think those that have really got strong longer term history of winning a growing share of once should probably sort of be sort of looking to sort of chip away out in these sorts of scenarios. Then you can look at some of the other ones, and maybe some more emerging ones that are coming through that are really trying to push points of differentiation. The areas where the market's probably exercising a bit more caution of those that do have exposure into key markets like the United States, because that's obviously a market at the moment where you can see inflationary pressures. A lot of talk around things like stagflation and what sort of impact that's ultimately going to have on to mind, and names that have sort of been moved around a little bit, things like Visas, things like Breville, and names that people probably getting a little bit more cautious, I'm particularly given that they're coming into this sort of scenario with some relatively elevated evaluations, notwithstanding our good businesses.

Look, I think in this situation, this scenario, we like companies that have built sort of genuine longer term moats. The category killers have opportunities to win share, opportunities to grow share of wallet, and ultimately opportunities to outperform other market with respect to their earnings. Companies that you can sort of put in those sorts of boats is you'd sort of argue Woolworths with its data capability. You look at some of the other companies out there, sort of companies like Jbhi Fi, which is obviously proven to be a great category killer. You look at companies like Wesfarmers in terms of what they're doing. I think those that have really got strong longer term history of winning a growing share of once should probably sort of be sort of looking to sort of chip away out in these sorts of scenarios. Then you can look at some of the other ones, and maybe some more emerging ones that are coming through that are really trying to push points of differentiation. The areas where the market's probably exercising a bit more caution of those that do have exposure into key markets like the United States, because that's obviously a market at the moment where you can see inflationary pressures. A lot of talk around things like stagflation and what sort of impact that's ultimately going to have on to mind, and names that have sort of been moved around a little bit, things like Visas, things like Breville, and names that people probably getting a little bit more cautious, I'm particularly given that they're coming into this sort of scenario with some relatively elevated evaluations, notwithstanding our good businesses.

So Breville's a good example. It manufactures out of China, it sells into the US for about half. It's priduce selling as the USC sort of crunched on both sides there. How do you think about is Breville that sort of company? Lovisa is another one. Is it where you think long term for those stocks or are they really up against it?

So Breville's a good example. It manufactures out of China, it sells into the US for about half. It's priduce selling as the USC sort of crunched on both sides there. How do you think about is Breville that sort of company? Lovisa is another one. Is it where you think long term for those stocks or are they really up against it?

Yeah? Look, I think you've got to come back to what are they selling, what's the point of differentiation, and how do they resonate with consumers? And look, if we look at Breville. Breville under sort of the not really new management but under the current management team, they've done a great job really strengthening the brand, finding where they can continue to penetrate and push sort of new products, push into new markets or new theaters as they call them, and really driving innovation. And I do think one of the advantages of something like Breville's got look, admittedly where sort of sitting on the fence at one at the moment a little bit with a neutral but with a more positive bias, is that they've continued to innovate their position themselves at premium price points, and ultimately premium price points have lower levels of price elasticity of demand. The other thing I'd say is that the Breville management team, to their credit, have probably had quite a bit of foresight in terms of strategy, in the sense that they've been shifting production to other markets, notably Mexico to service the US. Now Mexico versus China has come out with some better relative tariffs, which again should put them in a better position, notwithstanding they still source quite a significant amount out of China. So I think that they're planning and they're moving the right direction. And again if you really back to believe the product least to sell off for an opportunity. They've just gone into China in a bigger way. As we know, China is a massive conchym market. They're probably going to a bit more capacity in that market to pump into there to sell, which maybe could be a bit of a blessing in disguise it someways.

Yeah? Look, I think you've got to come back to what are they selling, what's the point of differentiation, and how do they resonate with consumers? And look, if we look at Breville. Breville under sort of the not really new management but under the current management team, they've done a great job really strengthening the brand, finding where they can continue to penetrate and push sort of new products, push into new markets or new theaters as they call them, and really driving innovation. And I do think one of the advantages of something like Breville's got look, admittedly where sort of sitting on the fence at one at the moment a little bit with a neutral but with a more positive bias, is that they've continued to innovate their position themselves at premium price points, and ultimately premium price points have lower levels of price elasticity of demand. The other thing I'd say is that the Breville management team, to their credit, have probably had quite a bit of foresight in terms of strategy, in the sense that they've been shifting production to other markets, notably Mexico to service the US. Now Mexico versus China has come out with some better relative tariffs, which again should put them in a better position, notwithstanding they still source quite a significant amount out of China. So I think that they're planning and they're moving the right direction. And again if you really back to believe the product least to sell off for an opportunity. They've just gone into China in a bigger way. As we know, China is a massive conchym market. They're probably going to a bit more capacity in that market to pump into there to sell, which maybe could be a bit of a blessing in disguise it someways.

Ben, you are a measured person. Every time we speak to you always come across as measured. Are you surprised by the size of the tariffs and the reaction from markets, not just equities, but bond markets as well, commodity markets. It really has turned things on its head over the last week.

Ben, you are a measured person. Every time we speak to you always come across as measured. Are you surprised by the size of the tariffs and the reaction from markets, not just equities, but bond markets as well, commodity markets. It really has turned things on its head over the last week.

Yeah, it has, and I think the magnitude of them, yes, in particular, you look at the Chinese tariffs that over fifty percent. You sort of got this cumulative of twenty and thirty percent that's come through. It's enormous and I don't anyone's going to deny that in terms of the market reaction. Look, I think yes in some ways because it's uncertainty and I think we're obviously seeing a situation with the US it's obviously trying it as a really clear agenda that they're going to go after, and I think there's obviously people trying to understand where that ultimately ends, and at this stage we don't know. Does it then come with corresponding tax cuts on the other side that's ultimately quite stimulatary to the consumer. Well, I don't know. Potentially that could send the markets going right up the other way in terms of positives. So there's a lot of gives and takes and put and takes around this, and the short answer is yes, I have been surprised by the magnitude of some of these tariffs coming through the market reaction will Look, I think we're going to think of it at the moment, see where we land in a week or a month or six months. But look, I think as we've talked to a beginning of this podcast, uncertainty brings you with it volatility, which can provide with it opportunity, but you need to really have conviction in your views. And I think the importance at the moment is to take a longer term leans because we will get there, but it's going to be a probably a bit of a rocky road for the next little while.

Yeah, it has, and I think the magnitude of them, yes, in particular, you look at the Chinese tariffs that over fifty percent. You sort of got this cumulative of twenty and thirty percent that's come through. It's enormous and I don't anyone's going to deny that in terms of the market reaction. Look, I think yes in some ways because it's uncertainty and I think we're obviously seeing a situation with the US it's obviously trying it as a really clear agenda that they're going to go after, and I think there's obviously people trying to understand where that ultimately ends, and at this stage we don't know. Does it then come with corresponding tax cuts on the other side that's ultimately quite stimulatary to the consumer. Well, I don't know. Potentially that could send the markets going right up the other way in terms of positives. So there's a lot of gives and takes and put and takes around this, and the short answer is yes, I have been surprised by the magnitude of some of these tariffs coming through the market reaction will Look, I think we're going to think of it at the moment, see where we land in a week or a month or six months. But look, I think as we've talked to a beginning of this podcast, uncertainty brings you with it volatility, which can provide with it opportunity, but you need to really have conviction in your views. And I think the importance at the moment is to take a longer term leans because we will get there, but it's going to be a probably a bit of a rocky road for the next little while.

Ben, thank you for talking to Fear and Greed.

Ben, thank you for talking to Fear and Greed.

Thank you very much.

Thank you very much.

It's Ben Gilbert, head of Australian research at Jarden. This is the Fear and Greed Business Interview. Remember this is general information only and you should see professional advice before making investment decisions. Join us every morning for the full episode of Fear and Greed. Daily business years for people who make their own decisions. I'm Sean Aylmer. Enjoy your day.

It's Ben Gilbert, head of Australian research at Jarden. This is the Fear and Greed Business Interview. Remember this is general information only and you should see professional advice before making investment decisions. Join us every morning for the full episode of Fear and Greed. Daily business years for people who make their own decisions. I'm Sean Aylmer. Enjoy your day.