I caught up with Robbie Barwick Senate Candidate for VIC and Research Director for The Australian Citizens Party, to discuss Trump, Tariffs, China and importantly what Australia needs to thrive and survive in this uncertain international environment.
I caught up with Robbie Barwick Senate Candidate for VIC and Research Director for The Australian Citizens Party, to discuss Trump, Tariffs, China and importantly what Australia needs to thrive and survive in this uncertain international environment.
This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto along the way.
The 2nd of April “T” day will go down in infamy, as global markets have since lost around $6 trillion of value as the global world trade order was trashed. The U.S. now accounts for 70% of the global equity market, up from 40% during the Global Financial Crisis. CNN’s Fear and Greed Index fell to 4 out of 100, falling deeper into ‘extreme fear’ territory.
US Treasury Secretary Scott Bessent, the former hedge fund manager who the market hoped would be the voice of reason in President Donald Trump’s second administration, did an interview with Tucker Carlson on Friday night amid more carnage on Wall Street. And remarkably, he claimed it had nothing to do with the tariff war launched by his boss.
Things got so wild that Warren Buffett’s team had to make a public statement after Trump shared a video on social media that suggested Buffett endorsed Trump’s apparent plan to send the share market down 20 per cent on purpose to ultimately revitalise the US economy.
While the 10% level of tariffs are now in place, and the higher levels, calculated on the back of an envelope it seems, following, it is not clear whether they are here to stay, a negotiating point of departure, or an attempt to drive yields lower, thus easing the US deficit.
Jerome Powell on Friday said the FED expects US grow to fall, and inflation to rise which sounds like stagflation to me while acknowledge the tariffs were larger than expected.
China responded with a matching 34% on many US good, Canada imposed 25% tariffs on cars to the US, while other countries are circling the wagons trying to maintain the existing world order, even as the new world order is emerging. This is not going to abate anytime time soon, and there are consequences for households, especially US households actually, businesses and countries. “We’re in the Wild West of a trade war right now,” said Mariam Adams, managing director at UBS Wealth Management.
Trump likened the process to a surgical operation on a patient, stating, “It was an operation like when a patient gets operated on, and it’s a big thing. I said this would exactly be the way it is.” He further predicted that the markets, stocks, and the country will experience a boom.
What is clear so far is that US big firms who have invested in global supply chains, to source cheaply and mark-up massively to sell branded good like Nike and Apple, are right in the front line. Future cash-flows are at risk, so stock valuations are down, with Apple down 25% year to date and Nvidia down 29%.
This market insecurity is set to continue, as the tariff game is played, this is a world class science experiment, driven by Trump and his team, with significant and long lasting collateral damage well beyond the US. As I discussed in my recent post, the basis of the calculations are largely political, and the potential implications enormous. Many will need to reevaluate the potential future earnings from stock, and so value, stocks which generally were priced to perfection, and which are still some way from fundamental value. So, volatility and more falls need to be expected. Duck and cover as stagflation enters centre stage!
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Digital Finance Analytics (DFA) Blog
Trumps Tariff Tidal Wave Swamps Markets With Stagflation Incoming…
It seems that markets are beginning to read the room, as the unwinding of the so-called rules based order – which really was based on a Pax Americana Hegemony, is falling apart. After the 25% auto imports tariffs were announced this week, the so called “Liberation Day”, on April 2, when Trump said he plans to announce reciprocal tariffs to end the days of other nations ripping off the US, or “T “ day is looking to be the next milestone.
No surprise then that safe-haven gold hit a fresh record high on Friday with the futures at $3126 and up more than 18% this year, even as the MSCI index of global shares fell, down 1.58%, and down year to date too, while the STOXX 600 European index fell 0.77% on Friday but is still up 6.79% this year. The SP500 was down 1.97% on Friday erasing -$1 TRILLION of market cap and posted its largest daily decline since March 10th and it’s down 5.11% year to date while the ASX 200 was up 0.16% as the election was announced, but down 2.17% so far this year, all weighed down by worries over a looming trade war sparked by tariff decisions from U.S. President Donald Trump.
With the price of BTC down over 4% this week from weekly highs of $89,000 to $83,654, it really has not value anchor so this may not be the end of the pain for holders of Bitcoin and, of course, other crypto assets, as when the leader falls, others follow.
But sometimes, it only takes one number to shift sentiment on the market, and this time, that number came from the latest inflation report. The price of Bitcoin has now lost a crucial technical support level – the 200-day moving average – after the latest Personal Consumption Expenditures (PCE) data was released, adding more weight to an already uncertain macroeconomic backdrop. For Bitcoin, which tends to struggle in tight liquidity conditions, the break below the 200-day moving average could signal further downside if macro pressures persist. What comes next? That depends on whether inflation slows or if markets have, once again, been too eager to price in victory too soon.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Market Disorder Incoming As “Pax Americana” Unwinds…
It seems that markets are beginning to read the room, as the unwinding of the so-called rules based order – which really was based on a Pax Americana Hegemony, is falling apart. After the 25% auto imports tariffs were announced this week, the so called “Liberation Day”, on April 2, when Trump said he plans to announce reciprocal tariffs to end the days of other nations ripping off the US, or “T “ day is looking to be the next milestone.
No surprise then that safe-haven gold hit a fresh record high on Friday with the futures at $3126 and up more than 18% this year, even as the MSCI index of global shares fell, down 1.58%, and down year to date too, while the STOXX 600 European index fell 0.77% on Friday but is still up 6.79% this year. The SP500 was down 1.97% on Friday erasing -$1 TRILLION of market cap and posted its largest daily decline since March 10th and it’s down 5.11% year to date while the ASX 200 was up 0.16% as the election was announced, but down 2.17% so far this year, all weighed down by worries over a looming trade war sparked by tariff decisions from U.S. President Donald Trump.
With the price of BTC down over 4% this week from weekly highs of $89,000 to $83,654, it really has not value anchor so this may not be the end of the pain for holders of Bitcoin and, of course, other crypto assets, as when the leader falls, others follow.
But sometimes, it only takes one number to shift sentiment on the market, and this time, that number came from the latest inflation report. The price of Bitcoin has now lost a crucial technical support level – the 200-day moving average – after the latest Personal Consumption Expenditures (PCE) data was released, adding more weight to an already uncertain macroeconomic backdrop. For Bitcoin, which tends to struggle in tight liquidity conditions, the break below the 200-day moving average could signal further downside if macro pressures persist. What comes next? That depends on whether inflation slows or if markets have, once again, been too eager to price in victory too soon.
In this “Election Special” Journalist Tarric Brooker and I discuss the announced election, and look at the data surrounding the upcoming campaigns.
This is perhaps one of the most consequential elections of the recent era, and we touch on the main policy areas, around housing, employment, productivity, infrastructure, and the gas reservation. Make your vote count!
You can follow Tarric’s latest article on the jobs market here: https://www.burnouteconomics.com/p/has-the-australian-job-markets-luck
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
In this “Election Special” Journalist Tarric Brooker and I discuss the announced election, and look at the data surrounding the upcoming campaigns.
This is perhaps one of the most consequential elections of the recent era, and we touch on the main policy areas, around housing, employment, productivity, infrastructure, and the gas reservation. Make your vote count!
You can follow Tarric’s latest article on the jobs market here: https://www.burnouteconomics.com/p/has-the-australian-job-markets-luck
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
In this show, I want to go beyond the superficial analysis of the recent budget given my in box has been flooded by “analysis: thousands of sources, much missing the point.
And in passing a recognition that the proposal to remove the non compete clause in employee contracts, is one welcome surprise.
But the Spin was in full force through the budget speech this week, with Chalmers claiming it represented the biggest ever” improvement in the budget bottom line since Labor’s May 2022 election, based on the May 22 forecast deficit of $79.8 million. This is the annual loss, not the cumulative total! Now, wall-to-wall deficits projected are projected ahead, so it’s a bit rich for the Treasurer to spin so hard, we all might get giddy.
Actually, the budget has been in deficit 33 of the past 50 years – or two-thirds of the time since Gough Whitlam lost office. And yet in that time our standard of living has improved and we still exist as a sovereign nation. So why all the focus on deficits and surrounding spin?
In summary, according to KPMG we got a forecast underlying cash balance of $42.1 billion in 2025-26; a $4.8 billion improvement on the recent MYEFO estimate. But Nearly $85 billion of “off-budget” spending over the forward estimate period, resulting in cumulative headline cash balance deficits of $236 billion over the four years to 2028-29.
But whether we look at the gas cartel, or tobacco tax, so many issues of importance were missed, indicative a a budget for the election, not reform for the ages….
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
In this show, I want to go beyond the superficial analysis of the recent budget given my in box has been flooded by “analysis: thousands of sources, much missing the point.
And in passing a recognition that the proposal to remove the non compete clause in employee contracts, is one welcome surprise.
But the Spin was in full force through the budget speech this week, with Chalmers claiming it represented the biggest ever” improvement in the budget bottom line since Labor’s May 2022 election, based on the May 22 forecast deficit of $79.8 million. This is the annual loss, not the cumulative total! Now, wall-to-wall deficits projected are projected ahead, so it’s a bit rich for the Treasurer to spin so hard, we all might get giddy.
Actually, the budget has been in deficit 33 of the past 50 years – or two-thirds of the time since Gough Whitlam lost office. And yet in that time our standard of living has improved and we still exist as a sovereign nation. So why all the focus on deficits and surrounding spin?
In summary, according to KPMG we got a forecast underlying cash balance of $42.1 billion in 2025-26; a $4.8 billion improvement on the recent MYEFO estimate. But Nearly $85 billion of “off-budget” spending over the forward estimate period, resulting in cumulative headline cash balance deficits of $236 billion over the four years to 2028-29.
But whether we look at the gas cartel, or tobacco tax, so many issues of importance were missed, indicative a a budget for the election, not reform for the ages….
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
We got the next tranche of monthly inflation data from the ABS today, which showed that the Consumer Price Index indicator edged down to 2.4%, which is below economists’ estimate of 2.5%. The headline figure has now been inside the RBA’s 2-3% band for seven straight months.
One important point of distinction with the monthly Indicator is that, while it will include prices for all the items in the CPI basket, not all these prices will be updated each month, so there are large helping of fudge in the numbers, which is why the RBA tends to value the quarterly data more.
That said, even the trimmed mean measure, which smooths out volatile items such as food and energy and is the focus of the RBA’s attention, played ball, decelerating to 2.7% in February from 2.8% in the prior month. The monthly inflation figures are volatile and are unlikely to affect the outlook for interest rates.
The outcome was the equal-lowest rate of underlying inflation since December 2021 and was consistent with the Reserve Bank of Australia’s view that inflationary pressures had cooled considerably over the past year. The slowdown was driven by a cooling of housing inflation, including rents and power prices, and a decline in fuel costs, the ABS said.
So what is ahead? Well of course we will get the more complete quarterly data in a month’s time, which the RBA is more likely to consider in their rate decision making. But while headline inflation fell to 2.4 per cent last month, it is expected to increase this year as state government electricity bill subsidies expire, even though the federal government has extended the support for power bills another 6 month, and as a result of this use of tax payer funds, the ABS recently revised down the weighting given to power bills in their inflation calculation, which just shows what $9 billion of your money can do!
All this means it is unlikely we will see an April Fool’s Day surprise next Tuesday.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
