Sluggish economy needs rate cuts; CBA hits $300b; Meta goes nuclear
Published: June 04, 2025
Sluggish economy needs rate cuts; CBA hits $300b; Meta goes nuclear
News in brief
The value of Commonwealth Bank pushed past $300 billion for the first time yesterday, as CBA’s share price passed $180. The country’s largest listed stock has appreciated by nearly 50 per cent over the past year. CBA is worth just under the combined value of the other three big banks, National Australia Bank, Westpac and ANZ.
Virgin Australia is set to list on the ASX, with an initial public offering of about 30pc of the company, valuing Virgin at around $2.3 billion.
Teal candidate Nicolette Boele looks to have won the once blue-ribbon seat of Bradfield in northern Sydney, after a recount, beating Liberal candidate Gisele Kapterian by just 26 votes in one of the tightest elections in history.
The local uranium stocks did well yesterday after Meta said it wants to increase its use nuclear power. Meta signed a 20-year contract to buy nuclear power from a plant in Illinois, owned by Constellation, beginning 2027. Microsoft, Amazon and Alphabet, parent of Google, have signed similar deals.
Elon Musk has lambasted Donald Trump’s signature tax bill as “a disgusting abomination". He derided the legislation in posts on X as a “massive, outrageous, pork-filled Congressional spending bill”. He added: “Shame on those who voted for it: you know you did wrong. You know it.”
Fear-o-meter
The Australian economy needs another interest rate cut, and another one after that. That is the key take-out from yesterday’s national accounts figures from the Australian Bureau of Statistics.
Businesses and households are reticent to spend. Governments are pulling back – you can’t keep the energy rebates going forever – and there’s a slowdown in students coming into the country.
Extreme weather events hurt March quarter growth, but even beyond that it is clear Australia is in a funk.
We need the Reserve Bank to move quickly. Based on this week’s board minutes, the central bank is worried about the slowdown in the economy and is less worried about inflation.
Two more rate cuts this year is a pretty good guess, with a third a possibility as well.
Who's talking today?
On Australia's economic growth, and what it means for the RBA and interest rates:
"The real rationale for lower rates in coming months is this idea that they need to get sooner rather than later monetary policy back to a stance that is not a headwind, but not necessarily a stimulant to the overall economy. And we think that's probably a cash rate in the low threes, so somewhere between three, three and a quarter.
And so for that reason, we have a forecast that they'll cut at the next meeting in July, follow up with another one in August, and then after a brief pause, deliver a final cut for the year in November. So that'll give, you know, another 75 basis points of rate cuts. And I think should see monetary policy far more appropriate given underlying fundamentals."
It is Thursday the 5th of June 2025, and the Australian economy is barely growing, running at about half the long-term average as businesses hold back on investing and consumers cut back on spending. ABS National Accounts released yesterday shows the economy expanded by 0.2 per cent in the March quarter – well below expectations – pushing the annual growth rate to 1.3 per cent.
Greed-o-meter
| Company | Market cap (USD) |
|---|---|
| McDonald's | $223b |
| American Express | $207b |
| Morgan Stanley | $206b |
| Walt Disney | $203b |
| Commonwealth Bank | $195b |
| Goldman Sachs | $185b |
| PepsiCo | $179b |
| Uber | $173b |
| Boeing | $161b |
Forwarded from a friend? Sign up to our daily newsletter
Commonwealth Bank ended yesterdaywith a market cap of just under $302b - Australia's biggest company by far. But where would that place it against some of the household names on Wall Street?
Listen to today's episode 🎧
Source: Stake
Tonight's the night!
Tonight Fear & Greed is hosting the launch of Michael Thompson's new novel All The Perfect Days - along with the first-ever live recording of Fear & Greed's Weekend Edition.
As you can see above, All The Perfect Days is now in bookstores like Dymocks. You can also order it online here.
And if you're in Sydney, and want to nab a last minute ticket to the event tonight, get in quick - there's only a handful left. Book your ticket here for a great evening.