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News.com.au
27-05-2025
- Business
- News.com.au
Global equity markets see quite an ‘upbeat tone' following Trump's EU tariffs decision
Global equity markets have seen quite an 'upbeat tone' over the last couple of days after US President Donald Trump delayed his 50 per cent tariffs on the European Union, according to CommSec's Tom Piotrowski. 'That saw other markets do quite well, but Wall Street was off for a long weekend on Monday, so this is the first opportunity in the floor session if you like that they've had to respond to this news,' he told Sky News Australia. 'The futures were higher in after-hours trade, but US markets were able to build on already solid gains.'
Bloomberg
27-05-2025
- Business
- Bloomberg
Biotech IPO Slump Seen Dragging Into 2026 as Returns Disappoint
Drug developers aren't expected to come back to the US equity markets in full force until next year — lagging other industries as biotechnology has delivered only subpar investor returns. Only five biotech companies raising more than $50 million have gone public so far this year, following last year's already stunted number of 18 initial public offerings, data compiled by Bloomberg show. The debuts are far from the frenzy of activity during the pandemic when roughly 150 companies from the sector went public over a two-year stretch starting in 2020.
CNA
27-05-2025
- Business
- CNA
Shares advance, longer-dated Treasury yields fall as markets cheer easing trade tensions
NEW YORK :Global equity markets gained on Tuesday amid signs of easing trade tensions, while longer-dated U.S. Treasury yields were set for their biggest one-day drop in more than a month, mirroring moves in the Japanese bond market. U.S. President Donald Trump paused his threatened tariffs until July 9 on U.S. imports of European goods following a weekend call with European Commission President Ursula von der Leyen. Data showed on Tuesday that U.S. consumer confidence snapped five straight months of decline and improved in May amid a truce in the trade war between Washington and Beijing. All three Wall Street indexes advanced, with the Nasdaq up almost 2 per cent following Monday's Memorial Day holiday. The S&P 500's 11 subsectors all gained, led by consumer discretionary and technology stocks. The Dow Jones Industrial Average rose 1.27 per cent to 42,131.69, the S&P 500 rose 1.59 per cent to 5,895.13 and the Nasdaq Composite rose 1.95 per cent to 19,102.95. European shares rose 0.48 per cent, supported by technology and industrials stocks. UK shares climbed 0.83 per cent following a holiday at the start of the week. MSCI's gauge of stocks across the globe rose 0.98 per cent to 878.87. "It was good news over the weekend, at least for the market, with the 30-day extra time frame for the EU trade tariff negotiation deadline. I guess the market was happy about that," said Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey. "Then the Bank of Japan said it was not going to issue as many bonds and so the yield story looked a little bit better." The yield on 30-year U.S. Treasuries fell as much as 6.3 basis points to 4.9738 per cent, on track for the biggest one-day decline since mid-April. The 30-year yields - at the epicentre of the market selloff in April following Trump's initial raft of tariffs - are still just below 5 per cent, near their highest since October 2023. The move mirrored a near-20-basis-point fall in yields for Japanese 30-year debt that came after a Reuters report on Tuesday that Tokyo will consider trimming issuance of the super-long bonds, after recent sharp rises in yields. Investors will focus on results from Nvidia on Wednesday, with the chipmaker expected to report a 66 per cent jump in first-quarter revenue. Speeches from a slew of Federal Reserve policymakers and Friday's U.S. core PCE price index are also due, which could provide clues on the outlook for U.S. rates. The U.S. dollar advanced against major peers including the yen, euro and Swiss franc following the decision of the Japanese authorities to curb bond issuance and improvement in U.S. consumer confidence. The dollar strengthened 1.07 per cent to 144.37 against the Japanese yen. Against the Swiss franc, the dollar strengthened 0.66 per cent to 0.826. The euro was down 0.37 per cent at $1.1345. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,rose 0.51 per cent to 99.46. Gold prices fell as the U.S. dollar advanced. Spot gold dropped 1.3 per cent to $3,299.39 an ounce. U.S. gold futures lost 1.95 per cent to $3,298.00 an ounce. Oil prices eased, spurred by worries of a supply glut after Iranian and U.S. delegations made progress on their talks and on expectations that OPEC+ will decide to increase output at a meeting later this week.
Forbes
25-05-2025
- Business
- Forbes
Recessions Signs Rise; Moody's Turns The Bond Market Blue
For the week, the large cap equity indexes (S&P 500, Nasdaq, and the DJIA) were down in the -2.5% range, with small cap stocks (Russell 2000) down a bit more (-3.5%) (see table). For the year to date, the results are mixed – pretty much near the flat line except for the -5.26% performance of small cap Russell 2000. Equity Markets Universal Value Advisors Six of the large cap tech Magnificent 7 were also down for the week with GOOG being the exception. These are all off significantly from their peak levels with AAPL, TSLA and GOOG off double digits in 2025. Only MSFT and META are positive for the year. And with a weakening economy, the outlook for equities is clouded. Magnificent 7 Universal Value Advisors The big financial news of the week was the Moody's downgrade of U.S. debt from AAA to AA+, now joining Fitch and S&P. All three ratings agencies have now lowered the credit of the U.S. government to less than AAA. It is noteworthy that S&P lowered their rating 14 years ago (in 2011). Clearly, the iterations of Congress and the Executive Branch since that S&P downgrade paid little attention as business as usual prevailed. And, given the current reaction, or lack thereof, it doesn't appear that the ratings downgrade will have any significant impact on the fiscal process. That is, business as usual will continue with future deficits as far as the eye can see! In our view, unless something changes, which appears unlikely, we could see more such downgrades. It appears that the dollar's status as the world's reserve currency has given the U.S. an automatic pass when it comes to fiscal responsibility. It is also noteworthy that even after the Moody's downgrade, the U.S. still has the worst balance sheet in terms of Deficit/GDP and Gross Debt/GDP of all other countries with the AA+ rating. This implies that, unless Washington D.C. takes this downgrade to heart, which appears to be highly unlikely, future downgrades are possible (if not probable). As an aside, we wonder why it took Moody's so long to follow what S&P clearly saw 14 years ago. As seen from the chart, the latest University of Michigan's Consumer Sentiment Index and their Index of Consumer Expectations are now at or below levels last seen in the Covid Recession three years ago. Consumer Sentiment & Consumer Expectations Universal Value Advisors Currently, there are no new stimulus checks in the works. And the U.S. consumer appears to be out of gas as they have depleted their savings (the savings rate currently is 3.9%; 9% is the norm). According to Wall Street Economist David Rosenberg, if not for the savings drawdown, GDP growth would be close to 0%. Recent data confirm that the economy is slowing increasing the probability of a Recession. Initial unemployment claims haven't spiked. They have been steady in the 220K-240K range for the last few months. What is of concern is the number of Continuing Unemployment Claims. They are now over 1.9 million. This implies that those looking for jobs are finding it more and more difficult to land one. This also implies that, while companies appear to be hoarding their existing staff, they have significantly slowed down their new hiring. This is a significant leading indicator – one the Fed should be paying attention to. This is where there is good news. In April, the CPI rose +0.2% from March's level. On a year/year basis, it was up +2.3% (vs. +2.4% in March) – so getting close to the Fed's 2% target. The three-month trend was at a +1.6% annual rate, and, according to Economist David Rosenberg's daily blog (May 23rd Breakfast with Dave) if current rents were used in the CPI calculation instead of rents lagged nearly a year, the three-month trend would have been a +0.7% annual rate, the slowest rate since October 2020 (Covid Recession). Note that this index showed a 3-month trend of +3.3% last December and +6.0% a year ago. Equities were down slightly for the week, and struggling for the most part on a year-to-date basis. Not surprisingly, it's a similar story for the Magnificent 7 tech stocks. Only Microsoft and Meta are positive for the year, with Apple, Tesla and Google down double digits with Amazon not far behind. A negative bias in the financial markets isn't surprising as Moody's downgraded U.S. government debt to AA+, now joining Fitch and S&P (which lowered 14 years ago in 2011). That downgrade initially caused a spike in interest rates, but, given a slowing economy, by week's end, rates fell back slightly with the 10 year, after peaking a 4.62% on Thursday (May 22nd) falling back to 4.50% by close of business on Friday (May 23rd), Meanwhile, consumers have become downbeat. Target reported a -3.8% falloff in sales versus a year ago, and retail is reducing its footprint, something normally seen in Recessions. Even Walmart (WMT) feels profit pressure and is lowering its headcount. And, when consumers scale back their vacation plans, one knows economic weakness lies ahead. Another sign of a weakening economy is rising delinquency rates. We see this in every major loan category (Credit Cards, Auto Loans, HELOCs, and Student Loans). A New York Fed Survey found that 11% of respondents said they won't be meeting their minimum debt payments over the next three months. Economic weakness also showed up in Existing Home Sales, with sales falling for three months in a row. In fact, they were lower in April than they were in October '08 (in the midst of the Great Recession). Prices have fallen for four months in a row, a streak not seen for 14 years. Continuing Unemployment Claims are rising. At the same time, Initial Unemployment Claims are not. These two facts imply that jobs are harder to find than they were several months ago. This is a leading indicator that implies upward pressure on the U3 unemployment rate over the next few months. Meanwhile, inflation looks to be contained with the three-month trend in the CPI at a +1.6% annual rate. On a year/year basis, which is what the media and apparently the Fed watch, the CPI was up +2.3% in April, approaching the magic 2% Fed target. The weak soft data (surveys etc.) have begun to appear in the hard data. Once again, because changes in monetary policy have a long lag before they impact the economy, the Fed looks to be behind the curve and late to the game. It is our view that the odds of a Recession are much higher than Wall Street believes. (Joshua Barone and Eugene Hoover contributed to this blog.)
ABC News
25-05-2025
- Business
- ABC News
Live updates: Trump trade threats hit markets, ASX set to follow Wall St down
A threat by US President Donald Trump to impose a new punitive 50 per cent tariff on European imports sparks selling across global equity markets with Wall Street in retreat on Friday. The ASX is set to follow the trend with futures trading pointing to a 0.4 per cent drop on opening. Follow the day's financial news and insights from our specialist business reporters on our live blog. Disclaimer: this blog is not intended as investment advice.
