House prices, CBA beast, Amazon's leadership rules

1.  How far will house prices fall?

2.  The Commonwealth Bank beast and its $5b profit

3.  Trump's immediate impact on Australian companies 

4.  Amazon's principles of leadership 

This interview went in an unexpected direction. What started out as a conversation about the AI boom, and whether it was a repeat of the internet explosion of the late 1990s, ended up as the most articulate explanation of why US President Donald Trump is using tariffs to achieve his economic goals. There's a lot of coverage broadly about the negative impact of these tariffs - but if you've ever wanted to understand the other side of the issue, take a listen to Dr Kevin Hebner from Epoch Investment Partners, who joined Fear & Greed from New York.

Listener Chris asks:

"A personal bugbear of mine. Why on earth does a bank still take up to three days to transfer money from one account to another person's acount? I know there are faster options now with Osko and the like, but I'll often still get an alert saying it may take two business days to clear. What's there to clear? It's my money, it's digital, and it should be instant!"

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Thanks for reading my opinions on the week's biggest stories.

- Sean Aylmer

House prices are falling in Melbourne, Sydney and Canberra. The pace of price growth in Brisbane, Adelaide and Perth is slowing while Hobart prices are stable. How far will prices fall? Not much. But nor will they rise significantly in 2025. That is according to the majority of real estate professionals, surveyed by CoreLogic. Notwithstanding many in the survey have a vested interest in house prices rising, the results say that improving profitability, rising incomes and the potential of interest rate cuts are enough to stop falling prices. Melbourne, where prices have fallen six per cent from their peak, looks to finally be turning the corner. Brisbane is the boom city, according to the survey, thanks to strong internal migration. Sydney will grow, but not quickly. There are other reasons, beyond those in the survey, why house prices should do okay, especially in the second half of the year. There is a housing crisis – not enough homes are being built – and that will put a floor on prices. There is also a federal election, and both parties will throw money at the problem, which is likely to push up prices. The big one though, is interest rate cuts. In all probability, there will be a cut next week, and another in the next couple of months. Affordability will improve - wages are growing, house prices have stalled, interest costs will fall. That should be enough to get the property market growing again. 

The beast that is the Commonwealth Bank just keeps growing. This morning the country’s largest company posted a $5.13 billion profit for the six months to the end of December, ahead of expectations. The bank increased its dividend to $2.25 a share and it reported solid lending growth and credit quality – two things investment analysts like. However expenses were higher as was investment spending, in part due to inflation. Significantly boss Matt Comyn said the Australian economy has slowed considerably. The bank has great data on what people are spending and can use it to provide a judgement on what is happening in the economy right now. The good news is that Mr Comyn thinks there is a rate cut on the way. Commonwealth Bank’s share price is up 40 per cent in the last year and six per cent this year (ahead of today’s market opening). It has a market capitalisation of $271 billion, meaning it's one-third bigger than number two company BHP, and larger than National Australia Bank and Westpac combined. It has been priced-to-perfection for months – in other words it is very expensive relative to history and other global banks. You have to wonder how long it can last. 

Last week we gave you the first eight leadership principles of the Amazon business. The retailer began in 1994 as an online marketplace for books. It is now an "everything store" and is estimated to employ over 1.5 million people worldwide. Management has had to employ, promote, and exit people at scale. There are 16 principles in total, and this week we are sharing the second eight.

1. "Bias for Action". Make timely decisions by acting quickly, understanding that many choices are reversible.
2. "Frugality". Leverage limited resources creatively to achieve more with less.
3. "Earn Trust". Build credibility by being transparent, respectful, and self-critical when needed.
4. "Dive Deep". Engage with the details to ensure accuracy and alignment with key metrics.
5. "Have Backbone; Disagree and Commit". Respectfully challenge decisions, when necessary, but fully support the final call.
6. "Deliver Results". Maintain focus on key outcomes and overcome setbacks to achieve quality results.
7. "Strive to be Earth’s Best Employer". Cultivate a safe, diverse, and empowering work environment that promotes employee growth.
8. "Success and Scale Bring Broad Responsibility". Recognise that with business success comes a duty to positively impact society and the environment. 

Among the most notable trends in profit season so far – even in the first few days – is how much influence Donald Trump is having. Medical gloves and surgical gown manufacturer Ansell said it is accelerating its push to build factories outside China and will lift its prices to overcome any drop in demand from US tariffs. Blood plasma group CSL’s share price tumbled after its result, in part because the outlook for its vaccine business is somewhat problematic, given the incoming head of the Department of Health in the US, Robert F Kennedy Jr., is against vaccinations. Macquarie Group had a quarterly briefing and had to ward off questions about what the Trump Administration means for plans to sell some of its renewable energy projects. Then there are the metals companies, including BlueScope Steel and Rio Tinto, who face tariffs on their exports to the US. In just three weeks, the world has become a hugely different place to do business. Even if three-quarters of what Trump says does not eventuate, the fact that he says it has shaken up corporates, not just on Wall Street but in Australia too. 

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AND ONE LAST THING...

30 second commercials in this week's Super Bowl cost up to $US8 million - and there was no shortage of companies forking out not just for airtime, but for some of the biggest names in Hollywood and sport. Check them out here. Our favourites are the ads for Ritz, Ram and Coors Lite. 

And we just have to squeeze this one in too. It feels like an early April Fool's joke - but apparently an aviation startup is working with Airbus on dual-level seats for aircraft. Yep, that's right: double stacked passengers. Because what's worse than 14 hours in economy? 14 hours in economy with someone sitting on top of you. Check out the designs - we might pass on this one thanks.