Latest / What the Flux / Coles and Woolworths alleged to rig prices | RBA pauses the cash rate... again | Intel receives a $5B offer

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Coles and Woolworths alleged to rig prices | RBA pauses the cash rate... again | Intel receives a $5B offer · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm justin and I'm harsh deep and it's Wednesday, the
• 0:09
  Speaker 2: twenty fifth of September.
• 0:10
  Speaker 1: A s we spoke the other week about luxury e
• 0:12
  Speaker 1: commerce marketplace set Higher. The share price dropped nearly fifty percent,
• 0:16
  Speaker 1: and that was because it's auditors wouldn't sign off on
• 0:18
  Speaker 1: their financial results. But now the auditors have come back
• 0:21
  Speaker 1: and given set Hire the all clear. Okay, next minute,
• 0:25
  Speaker 1: SETI share price jump nearly seventy percent.
• 0:27
  Speaker 2: Oh, talk about a comeback. It's the last week of
• 0:30
  Speaker 2: September and that means it's the time of the month
• 0:33
  Speaker 2: to do the financial hygiene. We've got it all covered
• 0:36
  Speaker 2: in the Flux app, from checking your credit score to
• 0:38
  Speaker 2: tracking a financial wellbeing score. Keep your financial wellbeing on
• 0:41
  Speaker 2: track in the Flux app.
• 0:42
  Speaker 1: Good call HD three very Highgienie can clean stories today.
• 0:47
  Speaker 1: Let's get into it for our first Woolworths and Coals
• 0:50
  Speaker 1: are in hot water after the Atrible c failed a
• 0:52
  Speaker 1: court case alleging that the supermarkets have misled consumers over
• 0:56
  Speaker 1: products on sale.
• 0:57
  Speaker 2: Looks like someone's been caught with the hand in the
• 0:59
  Speaker 2: cookie jar.
• 1:00
  Speaker 1: Tell me more, does Okay? So we own O Coals
• 1:02
  Speaker 1: and Woolies as the supermarket heavyweights in Australia. Together they
• 1:05
  Speaker 1: control over sixty percent of the grocery market.
• 1:08
  Speaker 2: And with the cost of living skyrocketing lately, it's fair
• 1:11
  Speaker 2: to say that many Aussies are on the lookout for
• 1:13
  Speaker 2: those yellow stickers at the supermarket.
• 1:15
  Speaker 1: But HD, it seems like some of those supposed bargains
• 1:18
  Speaker 1: at the supermarket might not have been so genuine after.
• 1:20
  Speaker 2: All, how do you mean?
• 1:21
  Speaker 1: Well, the A Triple C's alleging that both Coals and
• 1:24
  Speaker 1: Woolies have jacked up the prices on over one hundred
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  Speaker 1: items just before putting them on sale.
• 1:29
  Speaker 2: We're talking about everyday essentials like bread, milk, yogurt, and
• 1:33
  Speaker 2: even toilet paper.
• 1:34
  Speaker 1: Send it all over, TikTok now itch. They claim these
• 1:36
  Speaker 1: supermarkets increased prices on certain products to make the discounts
• 1:40
  Speaker 1: appear larger than they really were.
• 1:42
  Speaker 2: And if the A Triple C's allegations are true, this
• 1:44
  Speaker 2: could have some massive consequences for both Woolies and Coals.
• 1:48
  Speaker 1: Yeah, we're talking fines of up to ten million dollars
• 1:50
  Speaker 1: and a.
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  Speaker 2: Heap of pain to their already battered reputation.
• 1:53
  Speaker 1: So true, So tell me, ah, what is the key
• 1:55
  Speaker 1: learning here.
• 1:56
  Speaker 2: The damage to a company's reputation can often be far
• 1:59
  Speaker 2: greater than any finds they face.
• 2:01
  Speaker 1: Yeah, let's be honest, regardless of the legal outcome of
• 2:03
  Speaker 1: this case, we've still already become a pr disaster for
• 2:06
  Speaker 1: Woolies and Coals.
• 2:07
  Speaker 2: Oh yeah, they weren't exactly in the Australian consumer good
• 2:10
  Speaker 2: books to begin with.
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  Speaker 1: No, no, no, They've already been under scrutiny for squeezing
• 2:14
  Speaker 1: supplier margins.
• 2:15
  Speaker 2: And using inflation to justify price.
• 2:17
  Speaker 1: Hikes, and as a result, Woolworths has fallen thirty two
• 2:20
  Speaker 1: spots from second on the Brand Trust rankings to thirty
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  Speaker 1: fourth according to Roy Morgan.
• 2:25
  Speaker 2: While Coals has fallen two hundred and twenty one places
• 2:28
  Speaker 2: from the fifth most trusted brand to becoming the two
• 2:31
  Speaker 2: hundred and twenty sixth most trusted brand.
• 2:33
  Speaker 1: And a she this wasn't just one or two products
• 2:35
  Speaker 1: that the AH Triple S alleges that misled on.
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  Speaker 2: Nope, the A Triple C alleges Woolwards engaged in this
• 2:41
  Speaker 2: behavior across two hundred and sixty six products.
• 2:43
  Speaker 1: And Coals did this across two hundred and forty five
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  Speaker 1: products as well.
• 2:46
  Speaker 2: So does even if the legal case goes in favor
• 2:49
  Speaker 2: of coals and woolies, the damage to their reputation has
• 2:51
  Speaker 2: already been done.
• 2:52
  Speaker 1: For our second story, the Reserve Bank of Australia has
• 2:56
  Speaker 1: sat for the sixth time this year and paused the
• 2:58
  Speaker 1: cash rate for the sixth time at four point three
• 3:00
  Speaker 1: five percent.
• 3:01
  Speaker 2: Bucking the trend of the other central banks. Tell me
• 3:03
  Speaker 2: more jazz.
• 3:04
  Speaker 1: Okay, so we know the Reserve Bank of Australia. It's
• 3:06
  Speaker 1: the central bank of our nation.
• 3:07
  Speaker 2: Their goal is to basically ensure that there is economic
• 3:10
  Speaker 2: prosperity for people of Australia.
• 3:12
  Speaker 1: As well as stability of our currency, stability of employment
• 3:16
  Speaker 1: and jazz.
• 3:16
  Speaker 2: The Reserve Bank became the bestie of nearly every Australian
• 3:20
  Speaker 2: over the past decade when it dropped the cash rate
• 3:22
  Speaker 2: to just zero point one percent.
• 3:24
  Speaker 1: But the NHG after the pandemic, it started raising the
• 3:26
  Speaker 1: cash rate barely rapidly to raining inflation. They increased it
• 3:29
  Speaker 1: from point one percent to four point three five percent
• 3:32
  Speaker 1: in just over eighteen months.
• 3:33
  Speaker 2: If but now jazz. The RBA has met for the
• 3:36
  Speaker 2: sixth time this year and for the sixth time it's
• 3:39
  Speaker 2: paused the cash rate at four point three five percent.
• 3:41
  Speaker 1: And actually that's despite the fact that other central banks
• 3:44
  Speaker 1: like the US Federal Reserve have already started to drop
• 3:47
  Speaker 1: their cash rate the good years.
• 3:48
  Speaker 2: It was the first time this year that the Reserve
• 3:50
  Speaker 2: Bank hasn't actually considered raising the rates.
• 3:53
  Speaker 1: So surely there's only down from here.
• 3:55
  Speaker 2: Especially given we've diverged from many other central banks around
• 3:58
  Speaker 2: the world. So what's the key learning here?
• 4:00
  Speaker 1: The rate cut trend is sweeping across economies, but not
• 4:03
  Speaker 1: all a jumping on the bandwagonz.
• 4:05
  Speaker 2: Interestingly, the RBA has become one of the few central
• 4:08
  Speaker 2: banks to not make moves yet.
• 4:10
  Speaker 1: Yeah. I mean, if we look back in June this year,
• 4:12
  Speaker 1: we saw the European Central Bank and the Bank of
• 4:14
  Speaker 1: Canada cut their cash rate for the first time since
• 4:16
  Speaker 1: twenty twenty two.
• 4:17
  Speaker 2: In August, the Bank of England announced its first cash
• 4:20
  Speaker 2: rate cut since March twenty twenty.
• 4:21
  Speaker 1: Early this month, we saw the Central Bank of New
• 4:23
  Speaker 1: Zealand cut their.
• 4:24
  Speaker 2: Rates, but the big move was when the US Federal
• 4:26
  Speaker 2: Reserve cut their rates zero point five percent.
• 4:28
  Speaker 1: So other central banks are dropping rates to restimulate their economy.
• 4:32
  Speaker 2: But the RBA is staying cautious so that we don't
• 4:34
  Speaker 2: compromise on sustainable growth, and.
• 4:36
  Speaker 1: It looks like the RBA and maybe the Bank of
• 4:38
  Speaker 1: Japan they just stay away from the rate cut party
• 4:40
  Speaker 1: for now.
• 4:41
  Speaker 2: Sounds like it. For our third and final story, Intel
• 4:45
  Speaker 2: has received a five billion US dollar investment offer from
• 4:48
  Speaker 2: an alternative asset manager, just after a potential takeover offer
• 4:51
  Speaker 2: from Arrival.
• 4:52
  Speaker 1: Looks like Intel's finally becoming popular in NHGD, but not
• 4:55
  Speaker 1: for the chips. So what is going on here?
• 4:57
  Speaker 2: Well, Intel is one of the world's largest com few
• 5:00
  Speaker 2: to chip makers, with a market cap of ninety three
• 5:02
  Speaker 2: billion US dollars.
• 5:03
  Speaker 1: And while that sounds big, at its peak in two thousand,
• 5:06
  Speaker 1: Intel was valued at a opping five hundred billion US
• 5:09
  Speaker 1: dollars for the dot com bubble burst.
• 5:11
  Speaker 2: And before its competitors like TSMC and Nvidia entered the.
• 5:15
  Speaker 1: Chat And actually since then, despite Intel's best efforts to
• 5:18
  Speaker 1: recreate those glory days, it's lagged behind its competitors.
• 5:21
  Speaker 2: But now ja Intel's having its moment as it's just
• 5:24
  Speaker 2: received an investment offer of five billion US dollars from
• 5:27
  Speaker 2: asset management company Apollo Global Management.
• 5:30
  Speaker 1: And this news sent Intel share price up more than
• 5:32
  Speaker 1: four percent.
• 5:33
  Speaker 2: But that's not the only offer Intel's got on the table.
• 5:35
  Speaker 1: Oh no. A rival chip maker called Qualcom has reportedly
• 5:39
  Speaker 1: approached Intel for a potential takeover as well, which, if it.
• 5:42
  Speaker 2: Was to go through, it would be the biggest tech
• 5:44
  Speaker 2: merger of all time.
• 5:45
  Speaker 1: It's pretty weird to hear a company as large as
• 5:48
  Speaker 1: Intel was and kind of still is on the acquiree
• 5:51
  Speaker 1: side of the deal. But sometimes roles do flip.
• 5:53
  Speaker 2: So what's the key learning here?
• 5:55
  Speaker 1: In business? Just like in nature, the predator can also
• 5:58
  Speaker 1: become the prey.
• 5:59
  Speaker 2: You see, ja. Intel was quite the heavy hitter back
• 6:01
  Speaker 2: in the day.
• 6:02
  Speaker 1: We're talking one hundred and eight acquisitions over its lifetime,
• 6:05
  Speaker 1: with an average acquisition value of over one and a
• 6:07
  Speaker 1: half billion US dollars.
• 6:08
  Speaker 2: But the market for traditional PC chips, which was Intel's jam,
• 6:11
  Speaker 2: has been declining.
• 6:12
  Speaker 1: When the AI boom here, Intel hadn't developed advanced enough
• 6:15
  Speaker 1: AI chips to compete with the likes of Nvidia.
• 6:18
  Speaker 2: Yeah. So, while Intel was at one point the largest
• 6:20
  Speaker 2: chip maker in the world, today it's about half the
• 6:22
  Speaker 2: size of its potential acquirer, Qualcom.
• 6:25
  Speaker 1: And it's gone from being a global tech behemoth to
• 6:27
  Speaker 1: an attractive acquisition target. Guess you could call it the
• 6:30
  Speaker 1: circle of life or the circle of tech companies Floxam.
• 6:33
  Speaker 1: With the RBA pausing the cash rate at four point
• 6:35
  Speaker 1: three five percent, again, there's a little bit of hope
• 6:37
  Speaker 1: that the future might be cash rate cart We have
• 6:39
  Speaker 1: it all covered in the Flux app. Why the cash
• 6:41
  Speaker 1: rates being paused, what's holding the RBA back, and what
• 6:44
  Speaker 1: might change their mind in the future. So make sure
• 6:46
  Speaker 1: to download the Flux app and check out all of
• 6:48
  Speaker 1: our articles about the cash rate decision.
• 6:50
  Speaker 2: Thanks for listening and we'll see you on Friday.