The Weekend Edition | 21-22 Dec 2024

Published Dec 20, 2024, 5:00 PM

Sean Aylmer and Michael Thompson go head to head on the top business stories of the week, with Fear & Greed colleague Adam Lang adjudicating.

This is the weekend edition of Fear and Greed, daily business news for people who make their own decisions. Are Michael Thompson and good morning, Sean Aylmer, Good morning, Michael, Sean. Our weekend show is a competition. I'm just putting it out there right up front, because that's what this is about. It is not about the news. It is not about business. It's not about to say it. It's not even about listeners. This is about you and me, Sean and victory. And because we are each nominating a big story of the week, the most remarkable story, a sleeper story, a sleeper business story that's flying under the radar a little bit, and our favorite story. And because this is a competition, and because that is all that matters in the end is a winner, we need a judge, and our judge is our Fear and Greed colleague, Adam Lang. Adam, do you agree with everything I've said so far?

Almost none of it?

I like it is this one of those ones where when it takes all, So the last winner of the weekend edition for the year wins the year breast takes Yeah.

Yeah, considering I reckon, I mean, we haven't kept it tally, but I reckon I have lost probably about eighty percent.

Man, I think we're twenty five twenty five at this point, as I'm concerned, maybe a few weeks off.

I will take that because I know how many I have lost, and it is a vast, vast number. All right, quickly, Adam, Yes, what are the criteria you are searching for in these stories today?

Okay? For each of the four stories, I want to hear topicality and timeliness, a bit of economic impact. I would like it played up to all.

Year that has been your number one priority.

Yes, like a bell curve. I put the most important one in the middle, economic impact, and then the next two pure subjective bias, a bit of mine and I like melodrama, So bring some of that.

I will do my best.

Let's just jump into it, Michael, what's the biggest story of the week.

Yeah, look, the biggest story. I think we can agree right that the biggest event annually, Right, So disregard this week for a second. But the biggest event during the year, in any given year, in terms of the economy and in terms of politics, is the federal budget. Right, agreed? Yes, we all agree on that. No one needs to say anything. We all agree. So it stands to reason then that if the federal budget is the biggest story of the year, then the midyear Economic and Fiscal Outlook my EFO, which is essentially the budget update halfway through, is therefore the second biggest event in terms of the economy and politics in the year. I've put a lot of thought into the logic behind this, and this is dull so far go on, But it's a non debate because this week I have the biggest story of the week because my EFO. My EFO revealed wait for it, that the underlying deficit this financial year is due to come in at twenty seven billion dollars, which is slightly better than the May forecast of twenty eight billion dollars. And like this that little kind of qualifying thing, really that you would just be going, oh, telling a billion dollars difference. But but but it is then going to worsen for the next three years. Over the next four years, the deficit is forecast to be one hundred and forty four billion dollars. We gentlemen, are looking at a decade of deficit. Huh.

Government spending even you are struggling with his Michael. No, Adam, is being interesting a factor or not?

I didn't explicitly state it. Yeah, but it is important, is it? Yeah?

It feels like you're Oh, look at that. Those goalposts just shifted everyone absolutely the decade of deficit. Oh no, no, no, no, no, no no, there's so much more. Okay, government spending right as a percent of GDP is forecast to nearly double next financial year. Nearly double. That is extraordinary, right before falling back to more normal levels. Now you can prepare to hear a heck of a lot about this one, Adam. Write this down about that government spending during the election that is coming up at some point in the next six months or so. That is a gigantic target painted on the back of the government by the opposition. They will have a field day with that. But my EFO, that isn't just about the budget. Oh no, no, no, no, no no. There is so much more in it than just those numbers, right, Adam, what you get Laara for Christmas?

I'm going to offer her Michael's story so far?

No no, no, no, you love her, You're married? May I finish please?

I'm nearly done, But I'm just trying to make it clear that my IFO is big. It is not just about the budget. It's not just about the deficit. It's not just about the money. What it's also about is data, Adam, Data, and what I'm going to get Jackie some earrings. What we have learned this week is that net migration is forecast to be three hundred and forty thousand this financial year. That is significant because it is eighty thousand more than forecast. I'm glad to see you're writing that down, Adam, unless you're just.

Pretending he's written down earrings.

I've already got a really nice pajamas and some of that.

Might do that too. Pressure on the housing market, all right, housing market under pressure. The government has downgraded its growth forecast for the economy this financial year to one point seventy five percent and then two point two twenty five twenty twenty six. It is forecasting like this, is this just a wealth of data. It is forecasting ongoing easing of inflation and wage increases, a steady pickup in the unemployment rate to four and a half percent by the middle of next year. Honestly, my EFO is such a major event that I'm honestly surprised that it is not printed by default on all old school calendars like Christmas Day and Good Friday and Easter Sunday and all of those. It should be considered a fixture on the calendar for everyone and taught in schools. That is how big it is. Because it has given us an insight about economy.

We have it happen, Adam, we are losing listeners. Second, Yeah, give him the win. I'm happy.

Just get him to stop.

That's all.

Tell us your topic.

Sure, Yeah, right, you finished, Michael? Thanks good?

Wasn't I only had another three or four minutes? Yeah? Good?

What the big story this week was? And mine's like interesting as well. Craazy stuff so far. It is what happened at the US FED. They cut interest rates by twenty five basis points. Everyone expected that, but they said, we're not going to cut interest rates four times the next year. We're only going to cut them twice. Wall Street fell out of beds and P five hundred down three percent. Our market tumbled, all the banks down more than two percent. Group like the interestrate sensitive stocks, like the property companies like Goodman, they got hit hard.

All the US.

There's a bunch of companies in Australia that make their money out of the US. So James Hardy is a really good example building products group lots of money out of the US. We've had such a good run this year in the market, yet right at the end the Fed changed its mind. And what's happening on interest rates now. The reason for that is that maybe in Flame hasn't quite been slaved. Maybe Michelle Bullock at the Reserve Bank knows what she's talking about by not cutting interest rates. We also, of course got Donald Trump there talking about Tariff's pushing up prices, the fact that so many people lost tens of billions of dollars. Michael, you lost nothing, Adam and I we lost, oh huge amounts of money. Its on the back on the back of the market being dumped just before Christmas.

Ha Santa Claus rally, more like.

A Scrooge rally. That's what I'd call it. Big, big story this week because it affects all investors. And I was brief Adam.

Kicking the shins for investors just to finish the year. Sean Wins, I was frustrated listening to my foe right because we.

Are it wouldn't stop such.

No, just good.

Summary and good data. But here we are with an economy that's really sullen. Confidence down, business confidence, consumer confidence down, low unemployment, and our tax receipts should actually be funding a surplus at least reform, but there's none of it, and my EFO gave us nothing in that regard. Consequently, the markets didn't really react, whereas out of the FED that's a big change in rhetoric and disposition on where their interest rates are going. And we saw the market. It was a pronounced impact around the world. It was immediately reacted to, so yeah, it was. It actually caused changed people, to cause people to change course this week.

You know what next year, Sean, can you go back to doing the economy and to doing kind of this kind of thing because I have been hammered every single week because I have had to I'm off to the chiropractor straight after this episode, because I've been carrying this team for the last six months, because I've been doing all the economics and honestly, my back cannot take this any longer.

Yeah, I hadn't appreciated just how much of a burden we were rough.

Well, thank you, thank you. Thank you for acknowledging it.

Can I tell you about my most remarkable story?

Please do.

Miso Blast meso Blast Mesoblast Blasting off fifty four percent in one session. This stock is up nine hundred percent this year. The next best on the ASX two hundred. I think it's co I don't know. I don't have it in front of me. That's about three hundred percent or something like that. So this is three times better than number two. The reason and most recent reason for the big jump this week, the US Federal Drug Administration gave the green light to Miso blasts sell therapy treatment.

Right console it's called.

It'll be used to treat children for a life threatening complication that can occur during bone marrow transplants. Now that just hasn't been a treat for this complication. This treatment will save lives, full stop. There's about fifteen hundred children that receive bone marrow transplants each year in the US. Most of those are at high risk to this complication. That sent its share price up to fifty four percent. Mesoblast The other big jump in the stock this year came back in January when the FDA recognized its cell therapy or a vasco. I can never say that word. Basically treats heart disease in newborn babies. What a remarkable story. It is now up three point two is now worth three point two billion dollars. This is just one of those many biotech stocks that try very hard to make the world a better place, and this one does it. Remarkable story. Fifty four percent on one day, nine hundred percent for the year. Actually contributing to society, Michael. Contributing to society, That to me is a fantastic company and a remarkable story. And brief, if you guys want to get a cup of tea off your go, Michael, be finished in about six minutes.

No, I'll be done in about one and a half. But also, but a quick couple of points of order. Did you when you said that, actually contributing to society, Michael, were you implying that I personally don't contribute to society or my stories don't.

Well, your back was broken from just helping fear and greed, so you left for helping the rest of society.

Yeah, yeah, we're kind of dragging you along.

It's true.

We shouldn't expect too much from you.

Oh, you know what Sean to a dummy spit.

No no, no, no, no, no no, no, it's very it's different. Sean is the master of the dummy spit. I am the master of the exasperated sigh. And that is just what I did just then, because like, I'm just, I'm just. It's like working with children. Merry Christmas, everyone except children who know about business news.

It's weird, all right, kid.

Could you imagine to be like around the kitchen table at Adam's house when they start talking spreadsheets, very spreadsheet The boys would either go the boys would either go, oh yeah, dad, or where's my phone?

Where's my phone?

Everyone texting under the table.

To allower your wife. This needs a texting to allow your wife under the table, Adam, do you suspect that your that your your wife and kids have a WhatsApp group without you in it?

Look? I would, but I don't think they need it. It's just almost nonverbal glances. I reckon they can do it in a little twitch of an eye.

And anyway, from the most Remarkable Story, Michael, Most Remarkable Story. Look, my stories do have a bit of an economic kind of theme to them. God, thank God. The year is nearly over right, combined with politics.

Yes, today, that'll make that'll make it better. Go on, Well it works last time, didn't it. Let's try it again. I think I genuinely believe that the changes happening right now, right at this very minute, at the Reserve the Reserve Bank. I can't it say over at the straight face.

Now, I do believe that the changes happening at the Reserve Bank of Australia are remarkable. Right, But let me explain to you why. Okay, because on the surface of it you'll be like, oh, okay, all right, yeah, And I note, Adam that you have not picked up your pen to write anything down yet that I have said it's ready. This week two key appointments, right, and so we've been talking all year about these big, big, big, big changes, the overhaul of the Reserve Bank. So this is significant for the economic impact on Australia, all of that. Just take that as read. Okay, we understand all of that. But this week, this week, two key appointments. Federal Treasurer Jim Chalmers appointed an academic and a former bank boss to the new Reserve Bank in interest rate setting committee. There are a few things remarkable about this Number one, okay, is that these two people have extraordinary credentials, extraordinary, quite remarkable, how credentialed, well credentialed they are a and you. Professor Renee Fry mckibbon, for example, has worked at the European Central Bank, International Monetary Fund, Bank of England, Reserve Bank of New Zealand and the Atlanta Fed, one of the authors of last year's independent RBA review. Look, if you were going to just try and pick someone who knows this stuff to put on this committee, you would land on on Renee Fry mgibbon, right, Okay, good. Marnie Baker, the other appointeement appointment appointed person appointed, worked for thirty five years at Bendigo and Adelaide Bank, including six years as CEO, giving her what I would describe as a unique and remarkable insight into regional Australia, into the impact of interest rate moves on mortgage holders on real life bank customers around the country. I think it is remarkable as well because it brings some incredible experience, makes it more likely that the committee will have the knowledge and this was a point made by economists through the week, will have the knowledge to challenge the information put forward within the Bank by boffins, and I use that term affectionately. It is remarkable as a whole because it's going to encourage more accountability on rate decisions. And finally in this part, Adam, this part is actually quite significant and I thought this was a remarkable point made during the week. It is remarkable as well that Jim Chalmers could have named up to six new appointees to the committee and he could have gone political, because that was a lot of what the opposition was saying in the lead up to this, that hey, this has opens it up for the government to politicize the Reserve, the Reserve Bank and the interest rate Setting Committee, and he didn't. And I actually think that is admirable. It's been welcomed by other economists and sets the scene against brought stuff for your kids and sets the scene now I'm done, I'm done, I've got more words. Sets the scene now for a new world order at the Reserve Bank of Australia. Done done, Adam, over like that is genuinely remarkable stuff, Please judge Adam.

So Michael, look, it's worthy and important, interesting, but we didn't know this was coming and not not remarkable.

But we didn't know who it was that we did not, Adam, we did not.

Know someone who knows what they're doing.

We did, but honestly, a lot of the speculation was that it was going to be a political that they could here, and the fact that it wasn't is actually quite remarkable, and the fact that the two people there have real insights. Michaels decision has been made. Yeah, I know, you can't.

Nine hundred percent up this year. Yeah, I mean, I know this is highly speculative stuff, but when it comes to health outcomes and all the money they spend on research and getting something that wins and in this case saves lives, nine hundred percent growth in the share price, well played, Miso blast remarkable, excellent.

It is time for a break.

Let's hope that Mike to come back from Thompson. I hope he comes back. Definitix would be nice to finish too too now at about this to zip at the moment, to Niel to nought, and let's hope that we have a little more brevity.

Ask the break. We'll be back, all right, Sean. We're looking for a sleeper story of the week. Sleeper story being one flying under the radar a little bit, or it's going to become a bigger story further down the track. In that case, the fuse on that story has been listed in the last week. I think you should go first. I will. I will. Now keep in mind, Adam, this is a business podcast that we've got to talk about actual business stuff, not just of frivolity and just lighthearted japes. Can can you make it short? I probably? Look, honestly, probably not. I could tell you, I could tell you that brevity what I even ask because off we go, he's an extra minute. Yeah, I apologize, a bit.

Of a sleep story.

Not much fuss has been made about about it overall this year, But luckily I am here, got my little torch. I'm shining a light onto this story to illuminate it for the world. Obviously, the AX has kept growing in overall value across the year, so it distracts from what is going on behind the scenes. But I have had a peek behind the scenes at the ASEX, and I have uncovered the fact that the number of companies on the BOSS is shrinking because nobody knows about this can can look good story? It was you that did it? That's all.

I'm just we're just going to make sure it was you that did it.

But that that had a little peek behind. Yeah, yeah, yeah, get go on, that's what I said. Yeap, good good. The ASX is on track to end the year with fewer listed companies than it started with as more companies opt to go private. The total number of listings has fallen from two one hundred and ninety one at the start of the year to twenty one hundred and twenty one by the end of November. A bit of quick maths, that's around seventy around yeah, give or take a few. We we had thirty new listings, sixty four d listings. Oh that does add up. No, it doesn't doesn't. I want to see you get out of this. I can't read my own handwriting anyway. But you know what the number look. As we always say on fear and greed, the numbers don't matter in the end. It's not about the numbers. It is about the trend. The trend is your friend here, Sean, and we are now in a multi ys is sleeper, a multi year contraction. Yes that no one's talking about. I'm here to do this. The appeal of private markets is growing. That is not good news for investors looking to put their market their money rather into Australian companies on the Australian share market. And some of these companies they aren't minnos either, so I don't know how they managed to fly under the radar now now that I mentioned this as a sleeper story. These are big companies, old companies in many cases like kind of building materials groups CSR and adbry or fruit and veggie company, Coster Group, Alumina as well, which does a lot of work with book site which is quite an interesting mineral eg Sean the three point four billion dollar deal that was a big one, probably not a sleeper. This overall, though, is a sleeper story and it's one that will come back. See it's not a sleeper as in flying under the radar right. It is a sleeper story under definition two B of the sleeper story category, and that is that it is going to be a bigger story further down the track. The fuse has been lit by me. I don't want to exaggerate. It will be back as a bigger story when the market is reduced from a magnificent smrgas board of companies to a mere rump with just perhaps a bank or two, maybe a mining company, and that's healthcare yep, maybe a care company. You'll have maybe four or five companies to choose from, and the rest have gone private. That's it. I'm looking into the crystal ball twenty twenty five looks pretty grim. There you go. Sleeper story, is that it? Yeah? It was brief, excellent.

Look, it is the weekend before Christmas. By far, the biggest sleeper story of this week. This week is that Christmas lunch now is all about sashimi. You're gonna have your prawns. You can have your oysters. In fact, you will have prawns and you will have oysters, But sashimi is back. The retailers are telling us kingfish, tuna, Atlantic salmon. They flow out the door, swim out the door. People are buying them anyone. They're swimming in their hands as they're taking them out the door. Huge sales of some of these products. Kingfish, beautiful, tuna, Love see tuna, salmon.

Well to me, salmon's like them. Salmon's like the chicken of the meat world. It's kind of chicken. Was the chicken of the meat world. Yeah, you guys.

I'm a pescatarian and Adam's got all sorts of weird dietary stuff going on.

So eat meat. So when you eat fish mosley and you.

Don't know what to have, you have salmon salmon, And it's like when you eat meat where you don't know what to have, you have chicken. It's the same. It's the same anyway. Sashimi. It's all about sashimi along with prawns and seafood and stuff like that.

What I loved.

There was a report in the fin Review the Sydney Fish Market, which is the biggest fish market in the country. It expects to sell more than three one hundred and fifty tons of seafood, that is three and a half blue whales walking swimming being pushed out the Sydney Fish Market yards. That is pretty phenomenal in the thirty six hour period, about one hundred and twenty tons of prawns, seventy thousand dozen oysters. But it's all about sashimi. The other one which is really interesting, and these are media reports throughout the week. I being talking about the plum pudding's coming back.

Now.

I've always been a big, big plum pudding fan.

My dad used to make one six months before Christmas, hanging to the laundry.

Hanging in the laundry.

You have to be cutting off the mold about this point, because it would have gone molded.

On the little coins that someone oh yeah.

Yeah, yeah, the nasty coins.

That was actually Michael's father in law who puts the coins in mostly And yeah, the plum puddings are back, but they're more bespoke plum puddings now, but I do miss my dad's old plum pudding. Make it in June July, it'd go molding the laundry. You'd cut it off. You'd have brandy butter, custard, ice cream lighted on fire. Absolutely, you'd put brandy over and off sh'd go. What was the category sleeper sleeper? So the sleeper story is Sashimi's Sashimi and the comeback of plum puddings.

Over to you, Adam, Adam, Look, I didn't think this was possible, but Michael wins I didn't think it's possible either.

Michael's argument, I think sifting through it was that this trend is going to be stronger in twenty twenty five, and I.

I think I used the term the market should become a rump.

So it was more of a bradbree of a win than anything.

A win is a win. I'll take it. This is important.

We're two to one, two to me one, sweet mother girl. So it comes down the whole sleep mother Oflau, the whole year.

Have you brought the strength? Fifty Michael?

Fifty two weeks of favorite Stories comes down to this. I think I should go first, though, Michael, because.

You've really got to got this in the bag, because my story is actually about business. It is about the world, it is about everything that this podcast stands for. Oh, you go first, though, she and get yours out of the way.

My story, favorite story is about the absolute sexiest.

Commodity in the world.

Okay, everyone that's listing those that's box site, yep, BK site one hundred and twelve US dollars a ton this week recordless. You know when you're walking in the bush and you kind of kick a stone and the top of the stone comes off and is an orange color.

That's boxite. Yeah, and lost of.

It in Queensland, Lost of it in wa It's the primary source material for aluminium.

Your obsession with box site is getting a little bit creepy book site. What a name?

Box site like that word boux side is that a really shocking name? For years, But all of a sudden it is more expensive than iroe are And that's because aluminium is becoming more popular than steel. Not really but relative sense. Aluminium is hot at the moment. Cars are made of aluminium, not a steel bridges and heavy stuff's made of steel, but cars, batteries, that's what it's about. So suddenly the great I mean what people like Michael don't know. Guess which wonderful country is the biggest producer of box site? Which wonderful brown Land? Australia yep, biggest box site producer Guinea and Australia with two big guys prices doubled in recent months around Tinto's are a huge box site producer.

This to me is a revolution.

You've got the green revolution, You've got the AI revolution, Now you've got the box site revolution. Forget the rest of the commodities you watch Rio, BHP, Tinto goo heavy into box site never happened. I agree heaving the copper. Maybe my favorite story of the week though, is book site because it is a sexy commodity.

Look, you know what this is. You know what this is. That's that feels it. It feels like it feels like one of those stories that gets rolled out in the week before Christmas.

Michael, this week one hundred and twelve US dollars a ton, first time ever, more than expense than nine or yeah, take that, Get on with your story. Stop cretiquing mine. We are way over time.

We are a little bit over time. I'll keep mine brief, please. My favorite story this week is about the way old fashioned companies, legacy companies are finding new ways to survive and compete in a vastly, vastly different world. Nissen and Honda are in exploratory talks about a merger that would create a fifty two billion US dollar Japanese giant, a Godzilla of car making, if you will. The fact is they need to do something right. Tesla is dominating the automotive industry in terms of value. You remember last week we were talking about it being worth one point three trillion US dollars. Chinese brand bid is booming too, and you compare that to some of the other legacy companies like Toyota two hundred and eighty billion GM, fifty seven billion, Ford forty one billion. Many of them were slow to move into the EV space. Some of them are in trouble. Volkswagen, one of the biggest manufacturers in the world, is dealing with strikes as it looks to close factories because of the rising competition, particularly from those Chinese manufacturers as well, and along with Tesla, shares in nis And this year have fallen forty percent. Hondas still going okay, but these two rivals are actively talking about a merge of those talks deepened this week. It would be tough in Japan, it would mean job losses, but it may just be necessary, might be necessary to see this and survive. And in a strange way, right, it is my favorite story this week, Adam, because it is about competition. It is about industries changing, industries evolving, and about legacy companies finding ways to reinvent themselves and stay relevant, including doing the unthinkable, which is merging with their mortal enemies in order to survive. That is why this is my favorite story of the Yeah, it's not bog site.

Nothing, okay, So this is probably subjective bias and that nin and Honda might merge hasn't happened yet, nor have they formed a plan other than growing in scale, doubling up. What are they going to do to change because it's.

He's gone, he's left the studio, put.

The headphones down, he's left. So, yeah, I just didn't he's back. I didn't find Michael that the thing has actually happened. It's a possibility, nor why they're doing it that will help them survive beyond just getting bigger, And we know that's the case in disruption. You can't just merge your way out of this thing. You actually have to change. So but but I love those two companies, Listen and Honda, right, I'd love to see them find a way site. Obviously, we are so lucky in this country, the mineral wealth we have and the royalties taxes we get from that benefit of orements. It's economy changing stuff. So what's changed about book site? Well, it's become sexy. According to Sean as the key component in aluminium, or as the Americans would call it, aluminum. Can we just have one international definition of Yeah.

Just what international language do you say? Sean?

So I actually couldn't split it. I've given you a.

Draw, No, no, no, that is a win. That is a week year and a half to one and a half. Thank you very much. Let's wrap up the weekend edition for the year.

Do you realize, Adam, what you have done? Do you, Adam? Do you? I'm with Michael.

I don't know that I can fully appreciate it.

Okay, let me tell you you have ruined You have ruined Australia's Christmas. The man of the people, that's me. The people will not stand for this anyway. Look, good competition. What was this want ah the.

Dead heat eighty nine points.

Each sesus a shimi one got done over, didn't it?

So to speak?

Two and a half to one and a half. Thank you very much. Michael, you did a sign off.

You've been doing it all year. We are way over time.

This is staggering. All right.

Well, i'd actually I'd like to put a special mention in Luke, our producer puts up with Michael's garbage in this show, and I have a special thank you and Happy Christmas to Luke and family.

Very very good man, Luke, and he'll look at the length.

Of this show and go, oh my god, really you've got to keep this bit in Luke, You've got to keep this bit in.

He might not even get to it. He might only get to that to the thirty minute mark and go, you know what, I reckon. That's enough. No one else to be listening to nip it off there anyway. Thank you, Thank you Luke for all this you do on this show to tidy Sean and Adam up and make them sound presentable. Congratulations Sean on your victory. Thank you, Michael, thank you, Thank you Adam for you a judging.

What's my Pleasure?

Make sure you're following the podcast and please join us online on LinkedIn, Instagram, TikTok, Facebook, and X. I'm Michael Thompson, an Atmosphere and Greed. Have a great weekend.