| Name | Daily Close | Daily Change | Daily Change (%) |
|---|---|---|---|
| Dow | 42,051.06 | -89.37 | -0.21% |
| S&P 500 | 5,892.58 | 6.03 | 0.10% |
| Nasdaq | 19,146.81 | 136.72 | 0.72% |
| VIX | 19.03 | 0.41 | 2.15% |
| Gold | 3,181.90 | -6.5 | -0.22% |
| Oil | 60.94 | -2.23 | -3.53% |
US MARKET
Wall Street sent stocks higher as bond yields sank after the latest economic data spurred speculation the Fed will cut interest rates twice this year to prevent a recession. The S&P 500 rose for a fourth straight day. Despite the gain, caution lurked in the background after the rally spurred worries about an overheated market, with the pendulum swinging in favor of defensive dividend-payers.
The S&P 500 rose 0.4%. The Nasdaq 100 was little changed. The Dow Jones Industrial Average added 0.65%. An index of the Mag Seven megacaps fell 1.1%. Stocks are now trading like last month’s rout never happened. The S&P 500 is about 4% away from an all-time high, while the Nasdaq 100 swung from a bear market back into a bull market. The advance is building as economic tensions between the US and China ease and the White House appears to be softening its approach to trade negotiations.
We can focus on company fundamentals but there’s little clarity over how the existing levies might impact the US economy or the trajectory the global trade war will take in coming months. And on fundamentals . . . . read what Walmart report . . . . and they are a consumer bellweather.
Walmart Inc. delivered another quarter of solid sales and earnings growth, but cautioned that tariffs and increasing economic turbulence means even the world’s largest retailer expects to raise prices. Still, Trump’s on-off tariffs haven’t spared the company. Transaction growth slowed from a year ago and sales were choppy last quarter, with grocery and pharmacy holding up while general merchandise slumped. And price increases fueled by the trade war are soon expected to hit shelves. If you’ve not already seen it, it will happen in May and then it will become more pronounced. Walmart will be fine – SMEs (or SMBs in the US context) arguably will not. Walmart is better-positioned than other retailers to weather the range of challenges. The company’s global supply chain allows it to source products from several regions, while its scale means it can negotiate better deals with suppliers.
Most consumer-facing companies have reported soft results in recent weeks, citing volatility in demand and economic disruption. Procter & Gamble Co. and Kraft Heinz Co. slashed their annual outlooks, while Southwest Airlines Co. and other airlines have voiced concerns about a looming recession. It’s a challenging environment to operate in retail right now. There really hasn’t been a historical precedent or prices going up this high, this fast. The magnitude of the tariff increases though are so large that retailers can’t absorb these by themselves. Fancy being a bond, private debt. Leveraged loan holder???
When Jamie Dimon talks, people listen: “recession remains a possibility as tariff fallout continues to buffet global economies”.
Overview of the Australian Market
The S&P/ASX 200 Index rose 0.13% to close at 8,279 on Wednesday, marking its sixth consecutive session of gains, supported by strength in commodity and banking stocks. Market sentiment remained buoyant amid easing global trade tensions, following an agreement between the US and China over the weekend to temporarily reduce tariffs, alleviating concerns over a prolonged trade war and its potential impact on global growth. With Australia’s significant export exposure to China, the local market remains highly sensitive to developments in US-China trade relations.
Top gainers included BHP Group (+0.6%), Woodside Energy (+3.4%), Commonwealth Bank (+0.8%), and NAB (+1.4%). On the downside, Aristocrat Leisure slumped 8.9% after the gaming and entertainment firm reported first-half earnings below market expectations.
