By Gemma Grant
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket lifted on Monday with mining heavyweights, banks and the energy sector helping investors kick off the week in the green.
The S&P/ASX 200 closed 102.1 points, or 1.3 per cent, higher with 10 of the 11 industry sectors in positive territory. The Australian dollar has also rallied since last week – trading at US63.11¢ – after dipping below US60¢ on April 9.
Markets have had a jumpy week, enough to make even the most confident planner rethink.Credit: Louie Douvis
The lifters
Miners buoyed the market throughout the session, with BHP gaining 2.7 per cent and Rio Tinto rising 1.4 per cent. Fortescue added 0.9 per cent, while Evolution Mining lifted 2.6 per cent.
Gold giant Newmont soared by 4.5 per cent after gold prices reached a record high last week. The energy sector also lifted, with Woodside Energy (up 1.1 per cent) and Santos (up 1.8 per cent).
The big four banks all finished the day higher, with Commonwealth Bank – the nation’s biggest lender – gaining 1.7 per cent. NAB lifted 0.9 per cent, ANZ gained 1.7 per cent, and Westpac was up 1.6 per cent.
The laggards
Consumer staples was the worst performing industry sector, dragged by the supermarket giants (Woolworths shed 0.5 per cent while Coles lost 0.2 per cent).
Endeavour Group was also down 0.7 per cent, and A2 Milk fell by 3 per cent.
Telecommunication giant Telstra was down 0.5 per cent, but the communication services sector pared back earlier losses to finish in positive territory, buoyed by Seek (up 0.8 per cent) and Car Group (up 1.5 per cent).
The lowdown
Tony Sycamore, market analyst at IG, said that while the exemptions for the technology industry – announced last week by US President Donald Trump – had lowered immediate risk of further meltdown, there was still a high degree of uncertainty looming over the global market.
“High tariff rates and frequent tariff changes complicate investment decisions, undermining business and consumer confidence and risking slower capital expenditures and trade – a combination that keeps the odds of recession elevated,” he said.
The flood of money in response to the pandemic hasn’t really made its way into the real economy.Credit: Phil Carrick
“With policy clarity lacking and the end of US exceptionalism, foreign investors are expected to reduce US asset holdings further, ensuring the trend for USD (US dollar) weakness likely continues and yields continue to march higher.”
The US dollar continued a months-long decline this week and registered its biggest single-day drop since 2022 on Thursday. The greenback has fallen nearly 8 per cent since Inauguration Day in a prolonged slide. Meanwhile, the price of gold has surged to its highest level in more than 40 years as it continued its streak of records, trading at $US3255.30 ($5172) on Friday afternoon.
In the US on Friday, smartphones, computers and other electronic devices won exemptions from some tariffs as part of a coming levy on semiconductors. The move was a temporary victory for Apple and other manufacturers relying on Chinese manufacturing.
Despite consumers’ concerns, stocks rose on Friday in a relatively calm market after several days of sharp swings. The tech-heavy Nasdaq composite index gained 2 per cent, the S&P 500 rose 1.8 per cent, and the Dow Jones Industrial Average increased 1.6 per cent, with trading volumes the lightest in several days.
For the week, the S&P 500 and Dow average recorded gains of 5.7 per cent and 5 per cent, their best weekly performance since November 2023. The Nasdaq composite rose more than 7 per cent for the week, an increase not seen since November 2022.
All three indexes remain double-digit percentages below their peaks in February.
Friday’s gains came after China signalled that it wouldn’t increase tariffs on US goods beyond raising customs duties to 125 per cent. China’s State Council said it would ignore any further US efforts to “play the tariff numbers game”.
The US-China trade war could mean the average American household will face a loss of $US4700 ($7528) at last year’s price levels when accounting for Trump’s tariffs, which will also cut US gross domestic product by about 1.1 per cent, according to an April 10 estimate from the Budget Lab at Yale University.
Outside the United States, while share prices were relatively calm on Friday compared with recent days, other financial indicators raised alarm for the financial system’s health.
A sell-off in government bonds resumed as the yield on the 10-year US Treasury climbed above 4.5 per cent at one point. Yields move inversely to prices.
Corporate leaders in the US have said they are prepared for an economic slowdown if trade tensions continue.
“I think we’re very close, if not in, a recession now,” BlackRock chief executive Larry Fink told CNBC’s Squawk on the Street show on Friday.
The investment firm’s conversations with clients have been dominated by uncertainty and anxiety about the future of the economy, Fink said in an earnings release on Friday.
BlackRock’s Larry Fink: “We’re very close, if not in, a recession now.”Credit: Bloomberg
China announced its latest tariff increase last week after most Asian markets closed. Ahead of the announcement, Hong Kong’s Hang Seng Index and China’s Shanghai Composite Index ended the day slightly higher. Taiwan’s index logged a 2.5 per cent gain. Japan’s Nikkei 225 lost almost 3 per cent.
Further increases “no longer have any economic significance” because the current levels make US exports to China not financially viable, China’s State Council said in a statement, adding that imposing higher tariffs would make the US a joke.
Tweet of the day
Quote of the day
“They’re the villains that return in every episode of the cost-of-living fight. And despite the competition watchdog swallowing any mention of ‘price-gouging’ in its recent inquiry, supermarkets are still copping heat.”
That’s Millie Muroi on the future of Australia’s supermarket giants. You can read more of her opinion piece here.
With Bloomberg
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.