ASX to fall, Wall St wavers after rally
Australian shares are set to open lower, reflecting a lack of further catalysts that have fuelled a stunning global equities rally on easing trade tensions. There's rising expectation among strategists that markets have run a bit too far too fast.
While market sentiment has improved with President Donald Trump's tariff policy pivots, Goldman Sachs' Peter Oppenheimer said 'equity valuations are high, particularly in the US, and earnings growth is likely to be moderate, leaving equities at risk of a further setback if recession fears resurface on the back of deteriorating hard data.
'Given these risks, our strongest conviction remains to be diversified across regions. We also favour companies across sectors with the ability to maintain pricing power and margins and recommend strategies that combine value with growth compounders as another way to diversify to enhance risk-adjusted returns.'
A key reason for the rally from the year's lows has been a return of the artificial intelligence trade, with President Donald Trump this week giving the green light for US tech to sell their products to Saudi Arabia.
'We believe the market opportunity in Saudi Arabia could over time add another $US1 trillion to the broader global AI market in the coming years and this dynamic is not being priced into the market and tech names in our view,' Wedbush Securities said in a note.
Market highlights
ASX futures are pointing down 40 points or 0.5 per cent to 8267.
All US prices are as of 2.25pm New York time.
Today's agenda
Xero and Graincorp are set to report results on Thursday morning. Ampol, oOh!media and Resolute Mining will host annual shareholder meetings today.
At 11.30am, April's labour force data will be released. In a note, NAB said it expects the unemployment rate to remain at 4.1 per cent on a 25,000 employment gain in April.
'Monthly employment data is volatile, but trend employment growth has slowed recently even as the unemployment rate has been little changed,' NAB also said. 'Reconciling that tension is a fallback in participation from its recent record high. The RBA forecast an unemployment rate steady at 4.2 per cent from Q2. We think the risk is to the high side of that forecast later this year.'
Overseas the focus will be on US April retail sales, PPI and weekly initial jobless claims data. Federal Reserve chairman Jerome Powell is set to speak, at 10.40pm AEST, on the central bank's five-yearly review of monetary policy strategy.
Top stories
Macquarie's three lines of defence caught short on reporting | Just two months after the 2009 implementation of controls for trade volume checks, things started to go awry.
Go back to Melbourne': NSW Liberals call to end intervention | Sussan Ley and Mark Speakman are under pressure to end federal intervention in the NSW Liberals after the party's disastrous national poll result.
Chanticleer: Disclosure doozy makes a mockery of Australia's safe-haven fantasy | If you told a private-equity suitor about a regulatory headache, but not shareholders, was the event disclosable or not? A 15 per cent share price drop says Mayne Pharma got this one wrong.
Trump goes for gold in the Middle East | The US president's visit to the region is focused on the money that's on offer. Israel and Gaza are not part of the equation for instant returns, writes Jennifer Hewett.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
ABC News
35 minutes ago
- ABC News
Why Trump and Musk were stronger together
Sam Hawley: Breaking up can be hard and fascinating to watch from afar. So where is the disintegration of the relationship between Donald Trump and Elon Musk up to now? Today, Geoff Kabaservice from the centre-right think tank, the Niskanen Center, on the real-world consequences of the split and whether there's any chance of reconciliation between the President and the billionaire. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. Donald Trump, US President: I'm very disappointed in Elon. I've helped Elon a lot. People leave my administration, some of them embrace it and some of them actually become hostile. I don't know what it is, it's sort of Trump derangement syndrome, I guess they call it. News report: Within hours of his Oval Office comments, their once-close relationship had disintegrated. The world's richest man firing back in a barrage of hostile posts on X. News report: Mr Musk, until recently a major ally of the President, continues to publicly criticise a government spending bill, even agreeing that Mr Trump should be impeached and replaced by Vice President J.D Vance. News report: Donald Trump also fired off on his truth social platform. He posted, I asked him to leave, I took away his EV mandate and he just went crazy. News report: Elon Musk then claimed that Trump is in the files about child sex trafficker Jeffrey Epstein tweeting, that is the real reason they have not been made public. Sam Hawley: Geoff, talk about a clash of the titans, if we could put it that way. How would you describe the last few days? Geoff Kabaservice: Well it's good to be with you Sam and of course this feud between Donald Trump and Elon Musk is causing plenty of amusement for anyone who pays attention to US politics. The memes practically write themselves. Is this alien versus predator? Is this the gayest thing to have happened during the whole of Pride Month so far? You know, it's amusing but it's also quite consequential in the sense that Elon Musk is not just the richest man in the world but somebody whose businesses directly impacts US national security and the fate of global affairs. And of course Donald Trump is the most powerful man possibly in the world. So it's entertaining but it's also disturbing. Sam Hawley: So there is deeper implications to all of this. One of them of course for Donald Trump is that the richest man in the world could switch his allegiances to the other side of politics. If he really wants to annoy Donald Trump he could back the Democrats, right? Geoff Kabaservice: You know, Elon Musk is unlike anyone who Trump has ever had in his circle because he's not a creature of Trump. He is independent. He has his own base in the world of business and of course his vast fortunes and the companies that he controls. So it's entirely possible that Musk could say I am flipping over to the Democrats or as he has already tweeted during the course of his epic meltdown that he is going to support a third party. Anything's possible. But of course there are also some people wondering if maybe this is a big put on of some kind, if maybe this was staged, if there's going to be an immediate kiss and make up session - to be determined. Sam Hawley: Well during an interview on NBC, Donald Trump did warn Elon Musk against that move. He said there'd be serious consequences although he didn't mention what those consequences would be. And even though he kept saying that he doesn't spend any time thinking about Elon Musk, he was happy to keep answering questions about Elon Musk. Reporter: What's your view on Elon Musk as of today? I mean, have you heard from him at all? Donald Trump, US President: I've been so busy working on China, working on Russia, working on Iran, working on so many, I'm not thinking about Elon. Geoff Kabaservice: This is a breakdown that I've been predicting for a while. I can at least say that I was correct in foreseeing that egos this Titanic could not comfortably coexist for long on the same team. But you know, Elon Musk has considerable cards, shall we say, because he is, as we've said, the world's richest man. He actually has a number of businesses that are critical to how government and the world works. Just as an example, SpaceX has under its umbrella Starlink, which does I think 80% of satellite communications launches in this country. It had a material impact on the outcome of the Ukraine war and the conduct of that war. And, you know, Elon Musk also controls a very important social media platform. It is as though he were the head of, let's say, the Washington Post 50 years ago. This is a person with a lot of formidable weapons, should he choose to go to all out war with Donald Trump, as opposed to just flinging insults at each other and calling each other paedophiles. Sam Hawley: Yes, because of course, Elon, without evidence, accused the US president of being named in the Epstein sex trafficking files, a post which he later deleted. So let's just delve a bit further, though, into what Elon Musk could actually do to harm President Trump. As we said, he also has, of course, this very large social media platform with millions of followers. Could he use that against the president, do you think? Will he want to? Geoff Kabaservice: Well, Elon Musk has a lot of say over what messages get broadcast on his platform, X, which is his new name for Twitter, of course. And it's entirely possible that he could actually go up against some of Trump's biggest supporters on that platform and simply suppress their messages, as well as putting out his own using one of the world's biggest microphones. But that's an entirely foreseeable outcome. Sam Hawley: And of course, as we mentioned, he could also set up a new political party, support the Democrats. Geoff Kabaservice: Well, you know, Elon Musk doesn't really have a lot of followers among Democrats. And in fact, a lot of people on the left have fled his platform for Blue Sky and others. But Elon Musk does have considerable amount of influence over the so-called tech right. Elon Musk is one of the biggest beasts in Silicon Valley, and a lot of people do look up to him and have followed his lead in being willing to support Donald Trump, even despite the fact that Silicon Valley's institutional political perspective, if that makes sense, is really quite different from Trump's populism. So there's a lot of points of stress in politics that if Elon Musk chooses to exacerbate them could widen the divides within the Trumpian coalition such as it is. And that might or might not benefit the Democrats. It's hard to say, but at least would weaken Trump. Sam Hawley: Mm hmm. All right. Well, there's also, of course, a number of ways that Trump could also make life very difficult for Elon Musk. You mentioned SpaceX. Donald Trump, he's threatened to tear up all of the contracts that Musk companies have with the federal government. And that includes, of course, SpaceX. Can Trump actually do that, do you think? Geoff Kabaservice: Well, Trump has certainly threatened other institutions with the withdrawal of federal funds, most notably Harvard University, which stands to lose close to $3 billion if Trump's actions are upheld by the courts. So it's certainly not an idle threat to take action against Elon Musk's companies. Certainly, SpaceX would be the most vulnerable to that kind of Trumpian threat because they get something on the order of $20 billion a month from the federal government. And in many ways, Trump's threat, it would really matter, would not just be to withhold funds from SpaceX, but actually to nationalise it. And Steve Bannon, who is in so many ways Elon Musk's antagonist, has actually called for Trump to do just that. And there's a real argument that somebody who does so much of the United States rocketry business, who has such an incredible sway over its Starlink and satellite apparatus, who in many ways is almost a sovereign entity at this point, you could make a real argument that nationalisation of SpaceX should happen. And I'm sure you would actually find a lot of Democrats supporting that motion as well. Sam Hawley: Trump could also suspend his security clearances, right? Which would make life somewhat difficult. Geoff Kabaservice: You know, Trump in extremis could even deport Elon Musk, who after all is from another place, shall we say. Sam Hawley: Yeah. And Steve Bannon, a former advisor to Trump, he's actually raised that, hasn't he? Geoff Kabaservice: He has indeed. Sam Hawley: That Donald Trump should investigate the immigration status of Elon Musk, even though, of course, he is an American citizen. Geoff Kabaservice: Right. Sam Hawley: Well, of course, the stoush also did send Tesla stocks plummeting, Geoff. So that's another way, I suppose. This could harm Elon's business operations. And also Trump could tighten regulations, couldn't he, to make it harder for Elon to do business? Geoff Kabaservice: Sure. You know, it's been interesting to see the way the narrative has shifted over the last several months since Elon Musk came aboard. When Elon invested something on the order of $250 million in the 2024 political campaigns, which included not just Trump's election, but also a number of other Republican candidacies in Congress and elsewhere, this seemed like actually a remarkably astute payoff because Elon Musk's personal net worth soared in the first few months. But, you know, there's been incredible pushback, even from some Republicans, against the Doge project of cutting the government that Elon Musk has engaged in. And Elon never quite seemed sure as to what his purpose was in helming that Doge effort. Was it to just help Trump extract political payback against woke enemies and the so-called deep state? Or was it actually to try to genuinely cut the deficit or make government work more efficiently? You know, the blow up between Musk and Trump got its start when Elon started criticising the Republican budget bill, which truly is a fiscally incontinent budget buster, which will add something on the order of over $3 trillion to debt. News report: Tech billionaire Elon Musk has issued a blistering criticism of US President Donald Trump's spending bill. News report: He has said that I'm sorry, but I just can't stand it anymore. This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Shame on those who voted for it. Geoff Kabaservice: So, you know, there's a lot of things that are going wrong in the Trump-Musk relationship in the ways that they're not seeing each other eye to eye. And Elon is not very political. So in that sense, Trump could actually have the upper hand on him and could make his life difficult in many ways. And, you know, since you mentioned Tesla, you know, Tesla's stock has really cratered in recent months. People on the left really don't want to be associated with Elon Musk, but the right has never gone in for electric vehicles in the first place. And even Donald Trump's shilling for Teslas on the White House lawn hasn't really done much to encourage people on the right to buy Teslas. And one would imagine that they will be even less willing to do that now. Sam Hawley: Yeah. And Donald Trump, of course, says he's going to sell his Tesla. I wonder if this might be better for Tesla, then Elon might have somewhat of a recovery when it comes to Tesla if he's not so closely associated with Donald Trump. Geoff Kabaservice: It's kind of amusing. Like I said, this is this sandbox, quarrel of these two extremely powerful men flinging poo at each other. But, you know, let's not forget that the United States is no longer the world's unquestioned superpower. It no longer, in some sense, has the luxury to actually engage in this kind of infantile are facing a serious technological threat from China, which undoubtedly will translate into global mastery of some kind. And frankly, Elon Musk's Tesla is also losing shares not just because of politics, but because it's actually lost the technological edge to some of these other Chinese companies. And the same is true of a number of critical technology areas where the United States is almost visibly falling behind China. And certainly our manufacturing capability, we've now been dwarfed by China, which is why Tesla does so much of its manufacturing in China. So one hopes that cooler heads are going to prevail. And I strongly suspect that both Trump and Musk are looking for ways to back down from this feud. But that doesn't mean that the political alliance that existed between them can be resurrected. Sam Hawley: Yeah. I was going to say, is there a way back from the brink? And if there isn't, who do you think will be the ultimate winner of this stoush, the billionaire or the president? Geoff Kabaservice: Oh, that's awfully hard to say because it's not clear what winning would look like here. I mean, at the end of the day, Elon will still have more money than any human being has had in history, as well as however many children he wants to have, however many consorts he wants to have. One suspects Elon will be fine. And at the end of the day, Donald Trump will still be president as well. And it's unlikely that the Republican Party is going to get out from under his brand of populism anytime soon, whether or not he chooses to run for a third term in 2028, despite the constitutional prohibition on that happening. So it's hard to say who is actually going to come out winners, you know, but I think there's a fair case to be made that they were stronger together than they will be apart, and that they will never quite wield the same power and influence or even be able to affect the cultural vibes in quite the same way. Sam Hawley: Geoff Kabaservice is from the Niskanen Center, a centre right think tank based in Washington episode was produced by Sydney Pead. Audio production by Adair Sheppard. Our supervising producer is David Coady. I'm Sam Hawley, thanks for listening.
West Australian
an hour ago
- West Australian
Wall Street opens mixed as US-China trade talks begin
Wall Street's main indexes are mixed as investors watch a fresh round of US-China negotiations aimed at mending a trade rift that has rattled financial markets for much of the year. Top officials from both countries have kicked off discussions at London's Lancaster House, looking to address disagreements around a preliminary trade agreement struck last month that had briefly cooled tensions between the world's largest economies. The meeting, which could run into Tuesday, comes four days after US President Donald Trump and Chinese leader Xi Jinping spoke by phone, their first direct interaction since Trump's January 20 inauguration. The leaders had, however, left key issues unresolved. "The talks will have to go on for some time before we decide whether or not there's actual progress being made. However, most investors remain hopeful that there will be some positive results," said Peter Andersen, founder at Andersen Capital Management. White House economic adviser Kevin Hassett told CNBC in an interview on Monday the US trade negotiators are seeking a handshake in London to seal an agreement struck by Trump and Xi to allow the export of China's rare earth minerals and magnets to the United States. Hopes of more trade deals between the US and its major trading partners, along with upbeat earnings and tame inflation data, helped US equities rally in May, with the S&P 500 and the tech-heavy Nasdaq notching their best monthly gains since November 2023. The S&P 500 remains a little more than 2.0 per cent below all-time highs touched in February while the Nasdaq is about 3.0 per cent below its record peaks reached in December. Major data releases this week include readings on May consumer prices and initial jobless claims. While investors widely expect the Federal Reserve to keep interest rates unchanged next week, focus will be on any signs of pick-up in inflation as Trump's tariffs risk raising price pressures. In early trading on Monday, the Dow Jones Industrial Average fell 129.75 points, or 0.30 per cent, to 42,633.12, the S&P 500 lost 0.32 points, or 0.01 per cent, to 6,000.04 and the Nasdaq Composite gained 44.81 points, or 0.23 per cent, to 19,574.76. Seven of the 11 major S&P 500 sub-sectors fell, with healthcare stocks, down 0.6 per cent, declining the most. On the flip side, information technology stocks advanced 0.6 per cent. Most megacap and growth stocks were mixed. Tesla shares edged 0.5 per cent lower after brokerage Baird downgraded the stock to "neutral". Nvidia gained 1.3 per cent. Warner Bros Discovery shares jumped 9.5 per cent, the most on the S&P 500, after the company said it would separate its studios and streaming business from its fading cable television networks. Robinhood Markets fell 7.4 per cent after S&P Dow Jones Indices left S&P 500 constituents unchanged in its latest rebalancing, following recent speculation that the online brokerage would be added to the benchmark index. Merck rose 1.1 per cent after the drug maker's oral cholesterol pill succeeded in two late-stage studies. Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the NYSE and by a 1.44-to-1 ratio on the Nasdaq. The S&P 500 posted 10 new 52-week highs and one new low while the Nasdaq Composite recorded 63 new highs and 27 new lows.
Perth Now
an hour ago
- Perth Now
Wall Street opens mixed as US-China trade talks begin
Wall Street's main indexes are mixed as investors watch a fresh round of US-China negotiations aimed at mending a trade rift that has rattled financial markets for much of the year. Top officials from both countries have kicked off discussions at London's Lancaster House, looking to address disagreements around a preliminary trade agreement struck last month that had briefly cooled tensions between the world's largest economies. The meeting, which could run into Tuesday, comes four days after US President Donald Trump and Chinese leader Xi Jinping spoke by phone, their first direct interaction since Trump's January 20 inauguration. The leaders had, however, left key issues unresolved. "The talks will have to go on for some time before we decide whether or not there's actual progress being made. However, most investors remain hopeful that there will be some positive results," said Peter Andersen, founder at Andersen Capital Management. White House economic adviser Kevin Hassett told CNBC in an interview on Monday the US trade negotiators are seeking a handshake in London to seal an agreement struck by Trump and Xi to allow the export of China's rare earth minerals and magnets to the United States. Hopes of more trade deals between the US and its major trading partners, along with upbeat earnings and tame inflation data, helped US equities rally in May, with the S&P 500 and the tech-heavy Nasdaq notching their best monthly gains since November 2023. The S&P 500 remains a little more than 2.0 per cent below all-time highs touched in February while the Nasdaq is about 3.0 per cent below its record peaks reached in December. Major data releases this week include readings on May consumer prices and initial jobless claims. While investors widely expect the Federal Reserve to keep interest rates unchanged next week, focus will be on any signs of pick-up in inflation as Trump's tariffs risk raising price pressures. In early trading on Monday, the Dow Jones Industrial Average fell 129.75 points, or 0.30 per cent, to 42,633.12, the S&P 500 lost 0.32 points, or 0.01 per cent, to 6,000.04 and the Nasdaq Composite gained 44.81 points, or 0.23 per cent, to 19,574.76. Seven of the 11 major S&P 500 sub-sectors fell, with healthcare stocks, down 0.6 per cent, declining the most. On the flip side, information technology stocks advanced 0.6 per cent. Most megacap and growth stocks were mixed. Tesla shares edged 0.5 per cent lower after brokerage Baird downgraded the stock to "neutral". Nvidia gained 1.3 per cent. Warner Bros Discovery shares jumped 9.5 per cent, the most on the S&P 500, after the company said it would separate its studios and streaming business from its fading cable television networks. Robinhood Markets fell 7.4 per cent after S&P Dow Jones Indices left S&P 500 constituents unchanged in its latest rebalancing, following recent speculation that the online brokerage would be added to the benchmark index. Merck rose 1.1 per cent after the drug maker's oral cholesterol pill succeeded in two late-stage studies. Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the NYSE and by a 1.44-to-1 ratio on the Nasdaq. The S&P 500 posted 10 new 52-week highs and one new low while the Nasdaq Composite recorded 63 new highs and 27 new lows.
