Miners snap ASX losing streak; Trump escalates trade war

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket broke its losing streak and finished in the green on Friday, buoyed by big miners, despite more turbulence on Wall Street as the S&P 500 index entered a correction after the latest chapter of President Donald Trump’s trade war.

The S&P/ASX 200 closed 40.6 points or 0.5 per cent higher at 7789.70 points, with eight of 11 industry sectors in positive territory. Financial stocks retreated, led by banking giant CBA.

Wall Street’s horror week has continued. Credit: Bloomberg

The lifters

The big miners rose on the back of a rise in iron ore prices overnight, with BHP adding 1.1 per cent and Rio Tinto advancing by 1 per cent. Fortescue jumped 2.7 per cent. Northern Star Resources (up 2.8 per cent) and Evolution Mining (up 4.6 per cent) surged after gold hit a record price overnight.

Other top performers included A2 Milk, which soared 8.8 per cent. This result buoyed the consumer staples sector, which finished in the green despite dips from supermarket giants Woolworths (down 0.2 per cent) and Coles (down 0.6 per cent).

Department store Myer rose 1.4 per cent after chief executive Olivia Wirth reshuffled the leadership ranks, resulting in chief financial officer Matt Jackman leaving the business. He will be replaced by former David Jones chief financial officer Kathy Karabatsas.

Myer’s current general merchandise manager of apparel, home and entertainment Belinda Slifkas has been promoted to chief merchandise officer, and Sportsbet’s current chief people officer Megan Collins is set to join Myer in the same role in late April. Meanwhile, a hunt is under way to fill the newly created role of chief product officer, who will have responsibility for Myer’s underperforming exclusive and private label brands including sass & bide, Marcs and David Lawrence.

The laggards

CBA finished 1.1 per cent lower on Friday, while rivals Westpac (down 0.1 per cent) and ANZ (down 0.2 per cent) also retreated. NAB was the best performer of the big four, lifting slightly by 0.3 per cent.

On Friday, ANZ announced a partnership with the Australian government that will support its long-term commitment to Pacific banking. The government has agreed to provide a guarantee worth up to $2 billion over the next decade, which will assist ANZ’s operations in the region.

The lowdown

On Thursday night, Wall Street’s selloff hit a new low after Trump upped the stakes in his trade war by threatening huge taxes on European wines and alcohol. The S&P 500’s 1.4 per cent slide meant it has slumped 10 per cent from its most recent high, the accepted definition of entering a correction. The Dow Jones fell 537 points, or 1.3 per cent, and the Nasdaq composite fell 2 per cent.

Lochlan Halloway, market strategist at Morningstar, weighed in on riding out the turbulence caused by Trump’s tariffs, highlighting the falls in US stocks that surged when Trump was elected last year.

“Trump’s victory lit a fire under these stocks in the immediate aftermath of the election. But how have they fared since? Compared to November 6th, the day after the election, Trump Media stock has almost halved, and Tesla is down about 15 per cent,” Halloway said.

“These assets may again have their day in the sun. But the underlying message still holds: not only is it difficult to predict how the world will unfold, but even if you do, there’s no guarantee a bet will pay off like you expected.”

A particularly feared scenario for the US economy is one where its growth stagnates but inflation stays high because of tariffs. Few tools are available in Washington to fix what’s called “stagflation”. If the Federal Reserve were to cut interest rates to boost the economy, for example, that could also push inflation higher.

Trump’s latest escalation came on Thursday, when he threatened 200 per cent tariffs on champagne and other European wines unless the European Union rolled back a “nasty” tariff announced on US whiskey. The EU unveiled that move on Wednesday in response to US tariffs on European steel and aluminium.

Tweet of the day

Quote of the day

“In the seven weeks since President Donald Trump’s inauguration, investors around the world have been left reeling after wild swings on the world’s biggest sharemarket. A euphoric rally in US shares over 2023 and 2024 created vast amounts of wealth – but the trend has now gone into reverse amid investor fears about the trade war Trump has unleashed.”

That’s Clancy Yeates on how “Trumponomics” has spooked the markets. You can read more of his article here.

with AP

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