24 Apr 2025
Stocks rise as trade tensions settle
Markets
- Local and global stocks bounced this week as trade rhetoric softened with potential deals and negotiating activity ramping up.
- In local stock news, CBA shares surged to a new all-time high pushing the world’s most expensive bank stock to near $170 per share but fell back later in the week.
- Macquarie Group shares rose slightly after the diversified financial group announced it would sell off its North American and European public investments business to Japanese investment bank Nomura. The $2.8 billion deal will see Macquarie offload its international equities, fixed income, and multi-asset investments.
- Santos shares fell despite the company receiving final approval for its $5.8 billion Barossa gas project in the Timor Sea.
- ResMed said it has received an exemption from US President Trump’s trade tariffs. The company also reported earnings per share slightly lower than expected with sales up 8%.
- Newmont reported a 19% fall in gold production in the first quarter due to planned mine maintenance and safety improvements. Additionally, they reported a lower output result from their Nevada Gold Mines joint venture.
- Oil prices had a volatile week, rising on new US sanctions on Iran and a drop in US crude inventories, before falling on potential tariff relief and rumours of another OPEC+ output hike in June.
- The Aussie dollar rose on a weakening US dollar as US President Trump went after the Fed Chair publicly, before the US dollar reversed losses putting downward pressure on the Aussie dollar with Trump softening his rhetoric.
Economics
- The IMF reduced its world growth forecast for this year from 3.3% to 2.8%, with notable downgrades for the US and China, citing the effects of tariffs and their impact on uncertainty.
- A key US leading economic indicator index fell by 0.7% in March, coming in below expectations which were weak.
- The US Richmond Fed manufacturing index fell further into negative territory in April.
- S&P manufacturing data for the US showed a subtle expansion overall, against expectations for a contraction. The services component fell but remained in expansionary territory.
- US new home sales rose 7.4% in March to a 724,000 annual rate, coming in above expectations.
- European Central Bank president Christine Lagarde has said US tariffs may be more disinflationary (lower inflation) than inflationary for Europe, though more time is needed to fully assess the situation.
Politics
- The US dollar and equity markets surprisingly got caught up in US President Trump’s public pressure on Fed Chair Jerome Powell. Political pressure on central bank chairs is fairly standard fare, though it's less frequently done in the public spotlight. Powell’s term ends next year whilst Trump subsequently clarified he has no intention of firing Powell.
- Hopes of a Russia / Ukraine deal rose earlier in the week before falling away as Trump publicly castigated Ukraine’s Zelensky on comments he made regarding Crimea.
- China has warned countries seeking to make deals with the US not to do so at Beijing’s expense.
- US President Trump said tariffs on Chinese goods will come down substantially from the current 145%. This followed US Treasury Secretary Scott Bessent’s comments that the trade standoff with China is unsustainable and will likely de-escalate but offered nothing on a timely resolution.
- The US said it made significant progress toward a deal with India following talks between US Vice President JD Vance and the Indian PM Narendra Modi. Apparently, a Japan deal is also near.
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