Latest / What the Flux / RBA hikes the cash rate...with more to potentially come | Musk's SpaceX acquires Musk's xAI | Hollywood's sequel strategy is failing

Transcript

RBA hikes the cash rate...with more to potentially come | Musk's SpaceX acquires Musk's xAI | Hollywood's sequel strategy is failing · What the Flux

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  Speaker 1: This is what the flux. I'm bred justin and it's Wednesday,
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  Speaker 1: the fourth of Thebuury.
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  Speaker 2: Does the boy. The NFL Super Bowl is taking place
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  Speaker 2: next Monday, Australian time, and you know what that means.
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  Speaker 2: Advertisers are splashing the cash. Get this one. Some of
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  Speaker 2: the world's biggest brands will pay more than US ten
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  Speaker 2: million dollars for thirty second Super Bowl advertising slots this year,
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  Speaker 2: and that's up around twenty percent from last year's eight
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  Speaker 2: million US dollars for thirty seconds.
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  Speaker 1: Just can't work out where the value is there a man.
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  Speaker 1: As you know, the RBA made a big cash rate
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  Speaker 1: call yesterday and we'll be talking about it in the pod,
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  Speaker 1: but if you want to go deep flux down, we
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  Speaker 1: have it all covered in the Flux app. We talk
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  Speaker 1: about why Ozzie's continuing to spend despite the cost of
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  Speaker 1: living challenges. So if you want to learn more about
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  Speaker 1: the RBA's big move, make sure to download the Flux
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  Speaker 1: app and check it out.
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  Speaker 2: Three massive stories said Hey juzzy boy, let's do it
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  Speaker 2: or our First, the RBA has hiked the cash rate
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  Speaker 2: zero point two five percent after the latest inflation numbers
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  Speaker 2: keep growing and growing and growing.
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  Speaker 1: We also or it come in, but nobody wanted to
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  Speaker 1: admit it. So tell me what'll be man.
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  Speaker 2: So Jazi boy. The Reserve Bank of Australia is like
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  Speaker 2: the referee in a sports match.
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  Speaker 1: Eight times a year, they check to see if inflation
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  Speaker 1: is playing by.
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  Speaker 2: The rules, alongside some other metrics like unemployment rate, productivity,
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  Speaker 2: economic growth.
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  Speaker 1: But they man if inflation races ahead or drags behind,
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  Speaker 1: the RBA may choose to change the cash rate.
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  Speaker 2: Well, the latest consumer price index rate jumped from three
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  Speaker 2: point four percent to three point eight percent in December,
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  Speaker 2: and that.
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  Speaker 1: Was the second quarter that cpis exceeded the RBA's growth expectation.
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  Speaker 2: And by now inflation is well outside the RBA's two
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  Speaker 2: to three percent target range.
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  Speaker 1: So it's no surprise that yesterday the RBA bumped up
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  Speaker 1: the cash rate by point two five percent to prevent
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  Speaker 1: inflation from spinning out of control.
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  Speaker 2: Yep, the cash rate has officially been increased to three
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  Speaker 2: point eight five percent.
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  Speaker 1: But they man economists are still wrapping their heads around
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  Speaker 1: why household spending is increasing when the economy is supposedly struggling.
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  Speaker 1: So what's the key learning here? Welcome to the Great
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  Speaker 1: Aussie money paradox. Everyone says they're struggling, but the receipts
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  Speaker 1: say they're spending otherwise. The latest data from November last
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  Speaker 1: year shows a household spending rate of six point three percent.
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  Speaker 1: That's almost double the rate of spending compared to the
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  Speaker 1: previous year. And it's not just an essentials juzsey boy, no, no, no,
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  Speaker 1: Ozzie's a spending on clothing, electronics, concerts, sporting events and
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  Speaker 1: many many more.
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  Speaker 2: So why so many Australians spending big?
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  Speaker 1: We'll be man, There are three big reasons why this
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  Speaker 1: might be happening. Number One, the RBA dished out three
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  Speaker 1: solid rate cuts last year which gave mortgage owners a
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  Speaker 1: little bit of extra cash to splash.
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  Speaker 2: Plus, Australia's unemployment rate is that a historic low of
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  Speaker 2: four point one percent right now, which means more people
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  Speaker 2: are earning and spending money. And lastly, b Man credit
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  Speaker 2: card spending has jumped eight point six percent over the
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  Speaker 2: last year. Even the stuff gets more expensive, people are
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  Speaker 2: buying it on credit anyway.
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  Speaker 1: So this rate hiak is a big warning from the
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  Speaker 1: RBA that will hopefully put a lid on people spending
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  Speaker 1: and inflation for our second story, Elon Musk's SpaceX has
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  Speaker 1: acquired Elon Musk's XAI as he looks to unify his
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  Speaker 1: AI and space ambitions. Is there just one day where
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  Speaker 1: there is not a huge story about Elon Musk? Jusey boy,
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  Speaker 1: I usually have Musk fatigue tell me more for the
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  Speaker 1: last time. So we know that Elon Musk owns a
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  Speaker 1: whole range of different companies.
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  Speaker 2: We're talking SpaceX, XAI, Tesla X, Neuralink, the boring company,
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  Speaker 2: but right.
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  Speaker 1: Now SpaceX is really the duel in his crown.
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  Speaker 2: That'd be his private space and satellite company that shoots
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  Speaker 2: its Falcon rockets into space and also sends satellites into
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  Speaker 2: space for its Starlink Internet. In fact, there were reports
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  Speaker 2: that SpaceX generated eight billion US dollars in profit last
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  Speaker 2: year on about sixteen billion dollars of revenue, and.
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  Speaker 1: It's expected that SpaceX will go public at a valuation
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  Speaker 1: of one point twenty five trillion US dollars later this year.
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  Speaker 2: But before that, Musk has announced that SpaceX has just
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  Speaker 2: acquired XAI to join together his AI, data and space
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  Speaker 2: bets under the one roof.
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  Speaker 1: And might I remind you that XAI also owns x
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  Speaker 1: two aka Twitter, And how.
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  Speaker 2: Much we talking for Musk to acquire Musk's companies. It's undisclosed.
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  Speaker 2: We can only imagine how tense the negotiations with himself
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  Speaker 2: must have been. Elon described the type as the next
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  Speaker 2: book in his mission. But that's not just that, be man,
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  Speaker 2: he said, it's all about building quote a centient sun,
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  Speaker 2: whatever the hell that means to me. So what's the
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  Speaker 2: key learning here?
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  Speaker 1: Elon Musk doesn't really build standalone companies, He builds a web.
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  Speaker 2: Instead of keeping SpaceX XAI, Tesla X, neurerlink in the
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  Speaker 2: boring company operating separately.
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  Speaker 1: He has a track record of stitching them together through
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  Speaker 1: acquisitions and share.
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  Speaker 2: Swaps and Jesse Boy Musk evangelists say this deal gives
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  Speaker 2: SpaceX some powerful AI capability, as well.
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  Speaker 1: As allowing engineers and data to flow between the different companies.
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  Speaker 2: But the skeptics reckon this is a classic Musk move. Yeah.
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  Speaker 1: He often uses his strongest, most valuable asset to acquire
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  Speaker 1: his earlier stage or loss making businesses.
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  Speaker 2: And by bundling them together, the weaker ones are effectively
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  Speaker 2: propped up by the stronger ones.
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  Speaker 1: You may remember that Musk folded Twitter Akax into his
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  Speaker 1: Ai startup Xai last year through a share swap that
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  Speaker 1: valued the company at thirty three billion US dollars.
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  Speaker 2: In twenty sixteen, he used Tesla stock to buy his
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  Speaker 2: solar energy company, Solar City, for two point six billion
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  Speaker 2: US dollars. The problem is.
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  Speaker 1: That this can blur performance as well as muddy the
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  Speaker 1: valuations of the individual company, and.
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  Speaker 2: Given SpaceX already makes eight bill in profit, it makes
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  Speaker 2: it even harder for investors to know what parts of
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  Speaker 2: the business are actually profitable. Yeah, for our third and
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  Speaker 2: final story, Hollywood's film studios are betting the house on
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  Speaker 2: sequels and superheroes. Even the franchises might not save their
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  Speaker 2: box office in twenty twenty six. Big story this one,
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  Speaker 2: Jaysy boy, tell me more?
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  Speaker 1: Okay? So, man, we know Hollywood studios, like Disney and
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  Speaker 1: Warner Bros. They have leaned heavily into familiar franchises over
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  Speaker 1: the last few years.
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  Speaker 2: Because known stories feel like safer bets than brand new
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  Speaker 2: ideas and.
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  Speaker 1: Other star wars. Maybe another toy story, give me some
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  Speaker 1: more Marvel Cinematic Universe, superheroes, Deja Vous, Central, and Morat. Now,
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  Speaker 1: industry experts are pretty worried that the studios may not
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  Speaker 1: hit their big hairy goal of ten billion US dollars
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  Speaker 1: in box office revenue this year in the US.
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  Speaker 2: Yeah, two of the most anticipated movies of twenty twenty
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  Speaker 2: five underperformed expectations that'd be universal as a Wicked for
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  Speaker 2: Good as well as Disney's Avatar Fire and Ash.
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  Speaker 1: That really got to hot the big studios.
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  Speaker 2: And this is hurting because moviegoers are pickier than ever.
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  Speaker 1: So what is the key learning here?
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  Speaker 2: When everything is a sequel, nothing feels out special?
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  Speaker 1: You see me Man? Franchises used to be Hollywood's safety net.
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  Speaker 2: It makes sense studios are love familiar ip because audiences
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  Speaker 2: recognize them. Yeah, and that means it lowers their marketing
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  Speaker 2: costs as well as their risk because audiences know the
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  Speaker 2: brand already. On top of that, it often boosts merchandise sales.
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  Speaker 2: It can help things like theme parks and toy sales
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  Speaker 2: and streaming spin offs as well.
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  Speaker 1: Get this be Man. Since twenty ten, eight of the
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  Speaker 1: ten top highest grossing films each year have been sequels, prequels,
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  Speaker 1: all remakes.
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  Speaker 2: It is a whole lot of marvels.
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  Speaker 1: Yeah, so it may be time for movie studios to
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  Speaker 1: produce a whole new raft of iconic flicks and.
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  Speaker 2: Given the top ten grossing films of any given year
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  Speaker 2: usually accounts for thirty percent to forty percent of total returns. Yep,
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  Speaker 2: if you hit it big, it's like striking the jack
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  Speaker 2: bitte give you more money man.
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  Speaker 1: The big question is if Australians are broke, why are
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  Speaker 1: we still spending money? And we cover it off in
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  Speaker 1: the Flux app today. If you want to learn more
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  Speaker 1: about the RBA's reasons or as cash rate high, can
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  Speaker 1: we break it down? Make sure it down to the
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  Speaker 1: Flex app to check it out. Thanks for listening and
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  Speaker 1: we'll see you on Friday