The straight up facts with Fear & Greed

1. A boom year for shares in 2024, but can it last?

2. Is the party over for electric vehicles?

3. Record house prices during March

4. China lifts tariffs on Aussie wine; Grange prices jump

THIS WEEK'S BIG STORY

Interest rates in Australia won't start falling before September, possibly not until 2025

Higher interest rates are supposed to hurt. They are supposed to slow down spending, and hopefully reduce pressures that push up prices. That's what is happening. The problem is inflation hasn't fallen enough and we are going to have higher interest rates for a while yet. 

WHAT DOES IT MEAN?

Around one-third of Australians have a mortgage, and one-third rent. Higher interest rates have pushed up the cost of buying a home, and contributed to the cost of renting. Rates at 12-year highs have led to a cost-of-living crisis with households slowing their spending.

WHY IS IT HAPPENING?

The view among economists is that the benchmark interest rate set by the Reserve Bank, which influences all other rates on home loans, deposits, credit cards, car loans etc. won't start falling until November. Financial markets have priced in September. But more and more analysts reckon it won't happen until 2025.

THE OFFICIAL LINE?

The Reserve Bank Governor Michele Bullock says she understands that the cost-of-living crisis is hurting. But she says the best way to help is to get inflation back in control. That hasn't happened yet and that's why the central bank has kept rates high. It's cold comfort for those struggling to pay next month's rent.

WHEN WILL RATES FALL?

BEST ON GROUND THIS WEEK

IF YOU MISSED THIS GUEST, CATCH-UP NOW

ON MONDAY WE WERE JOINED BY JAKOB CAKARNIS FROM JARDEN. HE SAYS QANTAS IS A 'BUY' - AND HERE'S WHY.

CALL IT FOR WHAT IT IS

BEST SOCIAL CALLOUT 

IZZYTHECAVOODLE

"WELL, IF NOBODY IS HAPPY, THAT WILL BE THE RIGHT OUTCOME."

- on the gap between business and union submissions for the increase to the minimum wage

GOT A HOT TOPIC?

In the first three months of the year, tech stocks have led the S&P/ASX200 to a record high. If it wasn't for the struggles of the big miners - BHP, Rio Tinto - who knows where the market might be. BUT ... nervousness about interest rates and the fact that shares are aleady up four per cent this year has investors thinking there might a "near term correction" in the market. Mind you, April historically has been one of the best months for the Aussie share market.

Tesla sold under 390,000 EVs in the March quarter, 60,000 less than forecast and 20 per cent fewer than the December quarter. Chinese manufacturer BYD sold just 300,000 units - losing its spot as the world's largest maker of EVs. The cost-of-living crisis, the cost of EVs, problems in factories and the challenges around charging have been blamed for the slump. Some manufacturers including GM, Ford and Toyota, think the EV boom might be overdone, focusing more on hybrid vehicles. 

A drought in Vietnam, the world's second largest producer of coffee, has sent prices soaring over the past week, with little respite in sight. Given flat whites are already costing upwards of $4.50, it's bad news for coffee lovers. And if you like something sweet with your cuppa, the news get worse. Cocoa prices, the prime ingredient in chocolate, are up more than 100 per cent this year after a big drop in production in Ghana and the Ivory Coast, which combined produce 50 per cent of the world's cocoa.  

After Beijing dropped excessive tariffs on Australian wine, Treasury Wine Estates - the leading wine maker in the $1.3 billion export industry - immediately lifted the prices of some its top labels - Pendolds Bin 389, 407, St Henri and Grange. Chinese buyers placed orders within hours of the tariffs, which were imposed in late 2020, being dropped. 

House prices across many parts of the country are at record levels - great for owners, not for buyers. Brisbane, Adelaide and Perth last month hit record high prices, with Perth up 20 per cent over the past year, according to CoreLogic. Sydney is just one per cent from record levels, though Melbourne still sits four per cent below its peak. Hobart, Darwin and Canberra are the relative laggards across the country, where houses and units are still selling well below peak levels. 

5. Prepare for more expensive flat whites