Inflation pressure as RBA meets, iron ore price tumbles, Trump warns of a bloodbath

[Music] The Reserve Bank meets this week as inflation pressures pick up both globally and locally iron oil prices tumble below $100 a ton and Donald Trump hits the campaign Trail warning that democracy will end in the US if he isn't elected welcome to fear and greed Daily Business News for people who make their own decisions it is Monday the 18th of March 2024 I'm Michael Thompson and good morning Sean Elmer good morning Michael we've had a bit of a facelift Michael we have indeed and there's actually a fair bit to talk about we've had it's a fairly comprehensive facelift so it's kind of like a full body tuck is that a thing I don't know I don't know it is for fearing green yeah we'll talk about it a bit later on Sean we've got a bit to get through first first I need to actually mention your interview today it is a a cracker of a chat you're speaking with Jeff Wilson from Wilson Asset Management Jeff is always entertaining extremely knowledgeable certainly one of the doans of the funds management industry in Australia anyway he's spending some time in New York Kenny's head around how Wilson asset Management's going over there what to invest in and mean Jeff as he explains he talks to a lot of large investors while he's over there so as opposed to deciding whether to invest in Nvidia or not that's kind of not his bwick he goes and speaks to people and hears what they think and that helps him of course with his investment philosophy great chat always is with Jeff because he's also very entertaining he certainly is and it is a really good interview it's coming up after the show so stick around for that one the main story though this morning Sean The Reserve Bank board meets this week today and tomorrow and while it isn't expected to change interest rate settings there's new inflationary pressures locally and overseas sure are and that's a concern for the central bank as it tries to get inflation back within the 2 to 3% range in the United States the world's leading economy headline and underlying inflation picked up last month core Goods Prices rose for the first time in many months producer prices also Rose The View among economists is that the final part of the road to get inflation lower is just getting a bit Rocky and maybe the FED won't start cutting rates in June as tipped what happens in the US is a decent guide to what will happen in Australia so the fact that Bond investors at the beginning of the year we're pricing in 175 basis points of rate Cuts now they reckon it's just 75 basis points is of great interest to anyone in Australia with a mortgage the US Central Bank meets on Wednesday so we'll hear more from them then but all eyes will be on whether they think inflation that road to inflation around that 2 and a half% level for the us whether or not they're getting there all right so we talked really about the global side what are the local inflation pressures well at the moment it's mostly about wages so the federal government over the weekend had to fight off criticism that a big boost in pay to aged care workers won't be inflationary or have the potential to delay rate Cuts aged care Minister Anica Wells played down the suggestion that the massive increase announced on Friday could trigger a wage price spiral the fair Work Commission on Friday found that the work of aged care workers has been undervalued recommended a 135% pay rise it follows an interim judgment last year that gave more than 250,000 direct care workers a 15% pay rise rather than awarding an across the board increase on Friday that's for direct age care workers the commissions awarded a series of further increases depending on your qualifications basically if the Aged care outcome flowed through to other care workers you could end up having some very very big pay increases for hundreds of thousands of people and that's a risk not that they don't deserve it they probably do I'm sure in fact I'm sure they do but it's an economic risk because it will fuel inflation that's what the Reserve Bank is going to be talking about or one of the many things it's going to be talking about when it meets today isn't it fascinating having a two-day meeting it just really builds anticipation ahead of tomorrow afternoon's announcement yeah it sure does and this is the second time that the reserve banks had this new format and I'm sure there'll be all sorts of teething problems and things like that but we get to hear from Michelle bulock afterwards and later in the week they released some new economic forecasts so very very big week for the central bank and it feels weird talking about a Reserve Bank board meeting in the middle of the month isn't it like it's just true just the fact that it's no longer tied to the first Tuesday of every month I need to readjust my whole life Outlook might be a little overdramatic a little bit anyway how did local markets finish up on Friday the s& px200 closed down a little over half per to 7,670 points taking the loss for the week to about 2.2% mind you a week ago the boss was sitting at a record high so the pullback isn't unexpected most of the top 10 stocks fell Commonwealth Bank and westpack were both off more than 1% National Australia Bank actually closed a touch higher for medals Rio Tinto were off more than 2% BHP ended 1.6% lower bunch of them fell though CSL trans Urban James Hardy industry Aristocrat Leisure White Tech Global and gold leader Northern Star resources some of the worst performers were the battery medals groups line toown resources for example Arcadium lithium and pilra minerals uh the flip side energy Giants Woodside and Santos they did pretty well on the back of higher oil prices the best performer on the asx200 though was strike energy that's another one of those oil and gas companies it finished up more than 6% telra also Buck the trend on Friday finishing more than 1% higher all right checking inter National markets now thanks to blue chip communication the experts helping financial services companies Market communicate and grow visit Blue Chip communication. comom and Sean the big story is iron or right now sure is iron or prices fell below $100 a ton for the first time in nine months taking the fall in 2024 to about 26% it's all happening without tangible evidence of a Slowdown in trade or steel output and analysts say the falling price is because of fears that Chinese steel mills who are the world's biggest users of iron or are heading into their seasonal restocking period and demand won't be there like previous years the lower price of ion or hurts profits of companies like BHP foru Metals in R which means the corporate tax that the government receives is lower hence we end up or less likely to end up with a budget surplus that means that eventually the government has to pay that money back and it's going to ask us for that money so long way of saying what's happening in the Chinese steel mills actually has a direct effect on the Australian budget and on us away from ion or Michael other Commodities are performing better Copper's trading higher and that's a bill with a commodity for the global economy of course so a higher price should suggest good news to the economy and oil prices are also at their highest level since November last year I'm sure that's good for all those oil explorers out there not so much for we hard drivve no certainly not at the Bowsers now Sean just quickly before we go to the break uh anyone who noticed anything a little bit different at the the start of the show today or who noticed things looking a little bit different on their podcast app wherever you might be listening to the uh to the episode we have had a little bit of a a facelift or just a refresh isn't it we've got some new music which we' got to say this is it's actually been performed by our fear and grade colleague Luke Smith who is a very very talented musician and this is this is music really just for fear and greed yeah look plays around the place and he's gone off and he's created an album but then he went and wrote this for us and it's fantastic what I loved about it Michael Luke's a very uh modest fellow he wouldn't say too much about himself at all and we asked whether we could get some help with music I think there was like six or seven different pieces he sent us and said oh look any of these you know you guys like any of these and yeah uh you and I and Adam had to go through them and choose them and they were fantastic really were it pretty exciting so so anyway now you'll hear kind of new music Across the the whole kind of fear and greed Suite of podcasts and then the the new artwork that you'll see on the the podcast app we have a new website we're still at fear and gre.com au but we've got the the new kind of black and white very striking kind of uh artwork and that's reflected then across our social media so follow us on Instagram and Tik Tok uh and Facebook and Linkedin and X as well it's pretty much everywhere so we've it's still the same show underneath we've just kind of wrapped it in some new packaging we look better that's what it is look better which which is really saying something isn't it aging well yeah yeah we are anyway look that's the story behind all of the the new music and the new artwork all of the changes but at its heart fear and greed is still fear and greed and that part hasn't changed we're just dressed a little better there's plenty to get through we better take a quick break we'll be back in a moment with the rest of the day's business news as shown it was a pretty good week for auction results with the preliminary clearance rate coming in at 74% even though there was more than 2,700 auctions making it the second busiest week of the year the housing market is very resilient no doubt about that all capital cities except Sydney recorded a rise in the preliminary clearance rate but while Sy sy's rate was lower than a week ago it was still one of the highest of the capitals at just under 75% Melbourne bounced back after last weekend's long weekend and came in at over 72% but the best result was Adelaide which came in at 92.6% not bad from 81 auctions that was Brisbane came in at 72% cber was almost 70% the big test really comes next weekend the week before Easter is traditionally one of the biggest of the year and 3,400 homes are going up for auction it's unusual to have more than 3,000 at any time so a 3,000 weekend is considered huge according to core logic next weekend or next week really 3,400 oh a bumper week now Sean the boss of tabcorp has quit after the board launched an investigation into whether he used inappropriate and offensive language Adam Ren skill resigned after the board became aware of the allegations Mr ronski allegedly suggested he could provide sexual favors to a female Victorian regulator last year if she gave the group a lucrative license according to the financial review no one was commenting on the allegations though the Victorian gambling and casino Control Commission chair a woman called Fran Thorn stated that the commission acknowledges the resignation of TABC Corp CEO following allegations of appropriate comments made about a female regulatory official Tabor chair Bruce akur will become executive chairman until a replacement is found Mr ien skill will forfeit all incentive payments which could be worth up to $10 million the news sent tab Corps share price down 6% on Friday Sean Arn media the owner of pure gold Network and the KY and Jackie O Show's KISS FM has upped its offer to take over Southern Cross all stereo there's also a move move of foot to dump Southern Cross chair Rob Murray now the initial bid from irn was rejected last week by Southern Cross now irn has made a slightly higher offer about 10 cents per share more irn has made it clear that it's been frustrated with the way the offer has been handled if the deal eventually occurs it would mean Arn takes kiss Tri M and 88 Regional radio stations its partner in the bid Anchorage Capital would end up with pure gold and hit Brands as well as 35 Regional stations and Regional TV station the offer comes after one of sca's biggest shareholders spia Asset Management wrote to the company asking for the chair to step down that happened last week he hasn't done that but obviously lots of uh turmoil going in in that company a British judge has ruled that Brisbane born computer scientist Craig Wright did not invent Bitcoin ending speculation at least legally that's been going on for 10 years this is is a remarkable story this one it sure is the the announcement came late last week Mr Wright claimed to be Bitcoin inventor satachi Nakamoto and after a six-week case in London High Court Judge James Miller said that the evidence is overwhelming that Dr wri's claims are false and he is not the author of the Bitcoin white paper that kicked things off back in 2008 Justice Miller said his written judgment would come in due course but he was very keen to actually give his verbal judgment as soon as possible the white paper that was written back in 2008 explained how Bitcoin would work and triggered the cryptocurrency's creation satosi disappeared in about 2011 seemingly with a cach a of Bitcoin that at today's value would be worth about 1110 billion US Dr Wright wanted to established that he is satosi and claim ownership of the intellectual property of Bitcoin well that's not going to happen I bet Sean there'll be plenty of people uh quite anxiously waiting for the judge to release his written judgment cuz that is going to be fascinating reading yeah totally me he Dr wght has been pushing this line himself yeah uh he's been the most the main proponent of it but it's just fascinating that the judge in the UK just came out and just said no way all right turning to international news never scared of a bit of hyperbole Donald Trump warned over the weekend that if he doesn't win the presidential election later this year democracy in the United States will end well what he said I I will quote him if we don't win this election I don't think you're going to have another election in this country H he went on if I don't get elected it's going to be a bloodbath for the whole country really really like ah we got to put up with this for the next six months Mr Trump also paid tribute to supporters who were currently in jail for writing at the US capital in January 2021 calling them unbelievable Patriots and hostages he repeated his previous claims that the 2020 election was stolen from him he also threatened to impose 100% tariffs on cars made in Mexico by Chinese companies anyway the polls are Clos the Reuters ipsos poll last week found the two candidates in a statistical tie with registered voters I I don't know I just don't think using terms like blood barath is just is very helpful and people who stormed the Capitol Building unbelievable Patriots no they're criminals that's why they're in jail oh God anyway uh Sean Vladimir Putin is set to win the Russian election held over the weekend which it's not really a surprise is it and the the turnout of people vote was low that's about the kind of main interest in this story cuz uh Vlad was always going to get the job the turnout was about 59% according to the Russia Central Election Commission Putin received a record 77% of the vote in 2017 when the turnout was 68% now the Kremlin wants a similar result this year to justify its war with Ukraine and confrontation with the West according to Bloomberg hence I reckon it could be 78 79% that Vladimir Putin gets this time around around he faced no serious opposition in the tightly controlled election there were three other candidates but they were all representing parties loyal to the Kremlin he's already Russia's longest serving leader since Soviet dictator Joseph Stalin he's held a job for 25 years now and he's been reelected for another six and finally Sean an 800-year-old dormant volcano in Iceland near the capital of ruic is erupting with lava flowing near a fishing town already verely damaged by earlier eruptions the eruptions began late last year and activity has picked up in recent days Michael it is worth Googling because the pictures are absolutely spectacular scientists are warning of regular eruptions from the volcano which is 40 km from rovik flights in and out of the country are operating as normal so far now Iceland's one of the most geologically active places on Earth due to its position between the North American and Eurasian tectonic plates on the midatlantic ridge it has about 30 volcanic systems and about 600 hot springs and this particular volcano which basically lay dormant for 800 years over the past couple of months it just hasn't stopped erupting that is incredible all right up next is the fear and great daily interview you're talking today with Jeff Wilson from Wilson Asset Management joining you from New York yes he tells me what he's doing over over there what he's thinking in terms of global small caps and just what he's hearing around the place it's a fascinating interview yeah it certainly is it is up next in the fear and greed playlist on your podcast platform or at fear and gre.com Au the new and improved fear and gre.com Au and also Sean after listening to Jeff Wilson stick around as well for fear and greed the week ahead with our resident Economist Steven culis yep Steven of course is very excited this week so much going on in Central Bank land and it's all about interest rates and things like that he doesn't think there will be any change I mean I think everyone agrees on that but he's very interested in what the wording uh is going to be like so uh always an Enthusiast Steven always great to talk to Y very much agreed thank you very much Sean thanks Michael it's Monday the 18th of March 2024 make sure you're following the podcast and please join us online on LinkedIn Instagram Tik Tok X and Facebook I'm Michael Thompson and that was fear and greed have a great day