Defensive stocks win friends; immigration goes digital; Netflix ponders live channels
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What is the main topic discussed in this episode?
Welcome to Fear and Greed, business news you can use today. Among Australia's largest companies, it is the less fashionable defensive stocks proving to be the best performing amid higher interest rates and war. Labor goes to the edges of the law to keep ISIS fighters and brides out, and the government will finally dump the orange immigration cards passengers fill in when arriving in the country. Plus, Genesis's $12.6 billion bid for Volt Minerals set to get the green light. And Netflix considers getting into live channels. It is Tuesday, the 14th of July, 2026. I'm Michael Thompson, and good morning, Sean Aylmer.
Good morning, Michael. Topsy-turvy world when you've got Netflix thinking about live channels. We're going to dump those stupid immigration cards that I have no idea why we've had those for the last 10 years.
And you nearly saw me be brought unstuck by Genesis's. Genesis's. Anyway, we'll tackle that one later, and I'm sure it'll be much, much better second time around. The main story this morning, Sean, the best performing large cap stock on the ASX this year, it isn't a big bank or miner. It's Woolworths. The next best is Insura QBE. Over the past month, the second best performing stock on the ASX 20 is gaming machine manufacturer Aristocrat Leisure. So uncertainty around the trajectory for interest rates and commodities spurred on, of course, by the Middle East war has meant defensive stocks and oversold stocks have performed best at the big end of the market.
That's right, Michael. This is best highlighted by CSL, a defensive stock. that also was oversold. It could not find a friend a couple of months ago. This year, it's off 29%, right? So it's really fallen sharply in 2026. But over the past month, investors have been piling in. Given how far its valuation fell, it's up 25% or 24%. since the middle of June. It is the best performing large cap in that period. Over the past month, the commodity players, BHP, Fortescue, Rio, Woodside, they've all gone backwards. While, shall we say, the less fashionable stocks, Woolies, QBE, Wesfarmers is in there, Aristocrat Leisure, CSL, they have all Soared. Now, a couple have been buffeted by specific issues. So the falling price of gold has hit Northern Star.
Uncertainty around interest rates and AI has hit Goodman Group. And not all defensive stocks have done well recently. So there's always exceptions to the rule. So over the four months or so, Telstra is down 1.8. Sorry, over the last month, Telstra is down about 1.8%. It's up just 2.5% this calendar year. Now, last week's outage probably won't help things there. Toll Road operated Transurban, another typical defensive stock. It's actually off more than 4% in the past month, up about 2% in the calendar year. But generally, it's these defensive stocks that are done best.
You've given us plenty to think about there. What about the big banks, Sean? Because they've got lots of shareholders, lots and lots of shareholders, and Commonwealth Bank has been underperforming. Is it the threat of higher interest rates and the slowdown in the economy, is it hurting them? Yes.
To be honest, the big four banks have actually had a better month. led by National Australia Bank, which is up nearly 10% in that four-week period. But generally, in 2026, the banks are laggards as fears of an economic slowdown hit earnings forecasts. In fact, since their peaks, so the big four peaks sort of between February and April, The big banks, with the exception of ANZ, in fact, have fallen really sharply. Now, as we head towards earnings season, there's now plenty of caution among investors about what the large caps will announce. There's still a bias towards higher interest rates from the Reserve Bank. Consumer confidence is weak. The housing market is falling, economic growth is slow, and we just don't have a big tech sector to bolster the market like Wall Street does.
The fear is that the economic cycle is working against stocks at the moment, and that's why the defensive players are doing best.
Now, we mentioned the war in the Middle East and the Strait of Hormuz, and whether it is open or closed, continues to dominate sentiment in the market.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:06–5:43
2
Which large-cap defensive stocks are outperforming ASX leaders in 2026?
5:43–6:09
3
Why have Woolworths, QBE and Aristocrat surged while miners lag?
6:09–7:33
4
How are interest rate uncertainty and the Middle East war affecting market sentiment?
7:33–16:10
Speakers
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