| Name | Daily Close | Daily Change | Daily Change (%) |
|---|---|---|---|
| Dow | 40,545.93 | -1,679.39 | -3.98% |
| S&P 500 | 5,396.52 | -274.45 | -4.84% |
| Nasdaq | 16,550.61 | -1,050.44 | -5.97% |
| VIX | 30.02 | 8.51 | 39.56% |
| Gold | 3,137.70 | 16 | 0.51% |
| Oil | 66.61 | -0.34 | -0.51% |
US MARKET
Ouch! First, the index numbers. The S&P 500 fell 5.0%. The Nasdaq 100 fell 5.5%. The Dow Jones Industrial Average fell 4%. Magnificent 7 Total Return Index fell 6.7%. The Russell 2000 Index fell 6.6%. Any company with major supply chains in Asia, notably the likes of Apple (-9.2%, $315bn market cap wiped out), Nike (-14%), Gap (-20%), got smashed. Financials got hammered based on concerns that their business customers will be materially impacted.
Several weeks ago we noted that equities managers held the highest level of equities historical ever. They were all in on equities. That has started to decline. According to a poll by the National Association of Active Investment Managers, fund managers have rolled back exposures to American equities to levels not seen since November 2023, Hedge funds dumped global stocks at the fastest rate in 12 years in March, according to Goldman Sachs data. But real point here is there could be, and likely will be, capacity to sell considerably more – the process may have just started.
Right now the critical thing for equities markets in terms of near term direction is whether there is an exit ramp on the tariffs, most probably the degree the higher tariff levels are being partly used as a bargaining chip. And right now it looks like not.
The methodology of the tariff determination was completely unexpected – effectively they were set based on the US trade deficit absolute number with any given country and then, because Trump said he wanted to be nice, the figure was halved. Additionally, a minimum floor of 10% applied to any other country, which explains why Australia in which the US enjoys a trade surplus, was slapped with a 10% tariff.
Earnings season kicks off next week. This season will be all about guidance vs reported earnings. Problem is – the sheer uncertainty, so how clear can CEOs be on guidance. But it is likely that certain themes will emerge, including any investment plans are on-hold, capex expectations being lowered, and commentary about the sentiment of the customer base.
LOCAL MARKET
The S&P/ASX 200 Index finished down 0.94% after paring 2% losses at open. Not surprisingly, it was defensive stocks that outperformed and plenty of selling pretty much everything else.
A mere 1% decline??? Seriously!
With the imposition of an additional 34% tariff on Chinese goods, raising total levies on China to 54%, heavyweight iron ore miners led the decline, with BHP Group dropping 3.4%, Fortescue falling 3%, and Rio Tinto losing 2.7%. Losses extended across energy, financial, consumer, and technology stocks, while gold stocks bucked the trend, benefiting from higher bullion prices—Northern Star gained 2.1%.