The big news of the week is that the bourse has joined Wall Street in shrugging off an RBA pause, high unemployment, and tariff threats – hitting a new record high above 8,770 points on Friday.
In fact, a surprise unemployment jump to 4.3% only helped matters, as that has many punters bullish the RBA will now cut in August.
Personally – and I hope to be wrong! – I’m not sure about that. While Wall Street is currently ignoring Trump’s tariff posturing, which I’ve been calling ‘tariff fatigue’ and painting as inevitable all year, US bond markets reflect a more cautious psychology.
The world is waiting to see what happens on August 1, when Trump is next expected to ‘un-pause’ sweeping tariffs for more or less every nation on Earth. (The exceptions are interesting, particularly Slovenia, where Melania Trump was born.)
Talking of tariffs, we got another tariff announcement for another critical metal, and it’s not copper – Chinese graphite imports to the US have been the latest thing to catch Donny’s attention (apart from the fabled Epstein list, a story which is becoming larger than life itself.)
As for that much-expected ASX rotation from the banks and into miners, well, that narrative isn’t really correlating to reality right now.
On Friday, CBA jumped 1.2% bringing its market cap back to $3.06B for the end of the week; at the same time, BHP jumped, helping clock fresh record highs, as it released a healthy-looking update.
So, for now, both CBA and BHP are looking equally positive. Especially as iron ore prices re-approach US$100/tn on the SGX.
Wall Street’s rise (and then our own down under) also shrugs off a slightly-higher-than-expected US inflation read this week. In the world’s #1 economy, core inflation is at 2.9% – this time last year, it was 3.3%.
Make of that what you will; how significant that gap is probably comes down to subjectivity. I still predict that US CPI will become the most important market sentiment indicator for the next few months.
And I imagine the RBA will probably be looking at the impact of US inflation to predict what tariffs may or may not do to Australia when the board meets late next month.
To get an idea of what Australian equities news caught my attention this week, check out my latest edition of HotCopper Highlights here.
Until next week!
International Equities
Apple to help bolster US REE sector with US$750M+ deal with MP after Pentagon stake
Australian Economy
Aus unemployment stages somewhat surprising jump to 4.3%
Unemployment expectations are starting to assume a rate closer to 5% in Oz (Westpac survey)
International Economies
US Core CPI at 2.9% – not far off where it was a year ago
China Q2 GDP growth comes in with slight beat at +5.2% YoY – partially thanks to tariffs
Commodities
Fresh Trump tariffs for Chinese graphite at 93.5%
Iron Ore futures climb to US$101/tn in Singapore in surprise move
EU potato futures down -30% MoM, showing the volatility climate change brings
Regulatory, Odds & Ends
Washington backflips on NVIDIA H20 chip China sales ban in surprise move
RBA proposes to scrap eftpos payment surcharges nationwide as cash half-dead in the water