Consumer stocks dumped; gambling deal done; 1st EV Ferrari sells for $US40m
News in brief
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Fear-o-meter
Paul Bloxham, HSBC chief economist, Australia and NZ
Resources account for the bulk of Australia's exports by value, led by iron ore, gold, gas and coal. Resources exports are expected to stay large, and contribute to activity, but to no longer drive national income growth, as they are likely to have peaked.
What's next? Education is already Australia's fourth largest export. While concerns about local housing undersupply and slowdown in net migration have weighed on these recently, Australia's strong academic institutions, and the shifting global backdrop, provide a natural opportunity to support growth in the sector.
Business services exports have overtaken tourism exports by value recently. Local expertise in areas like architecture and engineering has been in demand globally. Highly developed legal, financial (alongside the fourth largest superannuation pool in the world) and healthcare systems present opportunities.
A small, but fast-growing tech sector is in focus. Software license exports have risen to $10 billion in 2025/26 a 22-fold rise since 2015, reflecting some world-leading local tech companies. Australia has one of the largest data centre pipelines in the world. This tech investment boom has also led to a sharp rise in imports, which has pushed the trade balance back into deficit for the first time in a decade recently.
Fear & Greed Q+A today
QBE is one of Australia's biggest companies, with a unique insight into the risks faced by local and international businesses. Andrew talks about all of these, along with his efforts to turn QBE into a predictable insurer for both customers and investors:
“One of the things I really wanted to do was have some growth in the company and also take out volatility. We'd had about a decade of being relatively volatile at times, and insurance of course is a volatile industry because we cover natural catastrophes, cyber losses, marine losses, aviation, liability losses and so on.
But if you mix everything together and don't take too much of anything and get good balance, you can reduce the volatility and get a reasonable margin and pay claims well to your customers. So I wanted to get this balance of lower volatility, slightly higher margin, paying claims well and showing some growth. It seems to be a relatively simple positive formula.”
A disappointing earnings result from market darling JB Hi-Fi yesterday sent consumer discretionary stocks tumbling, as investors grow wary of companies that rely on household spending.
The cost-of-living crisis, spurred on by higher interest rates, higher rents, higher petrol prices, and rising inflation has spooked customers, and they aren’t spending as much at the mall and on High Streets across the country.
JB Hi-Fi, Australia’s largest electrical retailer, posted a rise in profit for the last financial year, but the result fell short of expectations with shoppers pulling back in the June quarter, and into July.
Chief Executive Nick Wells said Australian consumers are looking for value, and increasingly spending money during sales events, such as the Black Friday - Cyber Monday period.
As a result of the JB HiFi announcement, there were some big falls in retail focused stocks. JB led the way, dropping 11 per cent. Wesfarmers was off four per cent, Harvey Norman fell 4.4 and Super Retail Group was down six per cent. Alcohol groups Treasury Wine Estates and Endeavour were also sold off yesterday.
Greed-o-meter
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The Albanese government will create a one-stop register for people wanting to opt out of all gambling advertising and impose a new tax on sport betting companies to pay for its implementation.
The S&P/ASX 200 closed down half a per cent yesterday to 9073 points. Consumer discretionary stocks and financials led the market lower, while the big miners were among the stronger performers.
National Australia Bank lifted its June quarter profit by four per cent to $1.83 billion but warned that customers were facing challenges and uncertainties on the back of the Middle East conflict, higher interest rates and the property tax changes.
Data centres built in NSW will be asked to source a minimum 40 per cent of their electricity needs from wind power, which is relatively more expensive, under a plan to kickstart renewables projects and save government investment schemes from failure.
Ferrari’s first all-electric car was met with derision, mockery and an 8 per cent fall in the company’s share price when it was unveiled in May. But that didn’t dampen the sale price. EV number one for Ferrari has just sold for $US40 million ($56.5 million).