It’s Friday the 30^th of May, and Donald Trump’s tariffs are blocked by a US trade court, business investment disappoints, and Hailey Bieber scores a billion-dollar payday. Also, green homes are fetching a 15pc premium, as the competition watchdog focuses on the property sector.

Listen to today's episode 🎧 

News in brief

A US trade court has blocked President Donald Trump’s “liberation day” tariffs from going into effect, ruling the president overstepped his authority by imposing sweeping duties on imports.

Business investment – a key component of economic growth – has again disappointed with new spending down in the March quarter, adding to the argument for more interest rate cuts.

Green homes are fetching up to 15 per cent more than non-energy efficient units and houses, with one town, Broken Hill, reporting price differences of up to 75 per cent.

The competition watchdog is in the early stages of an investigation into REA Group, the $33 billion owner of realestate.com.au, saying it is concerned about competition in the real estate industry.

Model Hailey Bieber has sold her makeup and skincare brand Rhode, to Elf Beauty for about $US1 billion. That’s three times the total net worth of husband Justin.

Fear-o-meter

In the economy, there are three main parts – consumption driven by households, government spending and business investment. Government spending has helped the economy ever since COVID while consumption has been stable. Business investment is often the wild card. High investment levels mean strong growth and contributes to productivity.

The bad news is that business investment in Australia is terrible. During the mining boom of 2012, it was 20 per cent of economic output. Today it is about 11 per cent.

Investment in the March quarter fell and is lower over the last year than the previous year. No wonder there’s so little productivity improvement. Most of the growth in spending is on AI, data centres and utilities.

While it’s bad news for economic growth, it certainly adds to the argument that the Reserve Bank needs to cut interest rates later in the year to kickstart growth. Next week we get March quarter GDP figures. They won’t be great – the economy probably expanded by around 1.5 per cent during the quarter. It demonstrates the need for more rate cuts.

Who's talking today?

"We are right at the pointy end in terms of people processing big business payments, we can literally see... on a day by day basis, what's happening in the economy with business. 

And the first thing that we see is just the downturn in terms of traditional spend. So if I go to an industry like restaurants, we can see when the volume from restaurants comes off.

 

Second indicator that we get is that the card issuers start to cut the limits. So you might have a customer that pumps through 50,000 bucks a week and he gets up to 30k and you know, after 30k, the card starts to decline. And that's because the card issuers... decide that their risk is getting too high and so they know the way to manage that is they cut their card limits.

 

At the moment business is actually holding up really well. We're not seeing any of that, despite a lot of the talk in in the press at the moment that the economy is a little bit jittery. In terms of B2B, we don't see that." 

Greed-o-meter

Green features like double-glazed windows and solar panels are adding thousands of dollars to the value of properties around the country, according to property platform Domain. And it's not just in cities either.

Source: Domain.com.au

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