Source : THE AGE NEWS
By Jessica Yun
The Australian sharemarket has built on its positive gains from the morning after China announced it was evaluating a request from the US to open trade talks.
The S&P/ASX 200 was 58.9 points or 0.7 per cent higher to 8204.5 at 12:40pm AEST as energy stocks rallied 2.1 per cent higher. Ten of 11 sectors were in the green at lunchtime, with industrials the only exception.
Wall Street is on track to extend its winning streak.Credit: Bloomberg
Stocks were boosted after China’s commerce ministry said on Friday it was considering a request from the US for trade talks. But in a ministry statement, it said one-sided tariffs of up to 145 per cent remain an obstacle, undermining trust.
Energy stocks roared higher on the news, with oil and gas giants Woodside and Santos both 2.3 per cent higher in early afternoon trade. Mining titans BHP (up 0.3 per cent) and Rio Tinto (up 0.8 per cent) recovered from early losses to be in the green.
Clarity Pharmaceuticals has risen to the top of the bourse with gains of 14.5 per cent after JPMorgan raised its stake from 6.32 per cent to 7.33 per cent.
Boss Energy has gained 7.9 per cent, followed by uranium company Deep Yellow (up 6.1 per cent).
Meanwhile, Afterpay owner Block (previously known as Square) has suffered a 24.8 per cent loss to its share price after the digital payments juggernaut – also listed on the New York Stock Exchange – revealed first-quarter results that undershot expectations and lowered its profit outlook.
Corporate Travel Management has shed 10.1 per cent and Zip Co has tumbled 6.7 per cent.
“We revise down our estimates to incorporate tariff uncertainty,” said Citi Research analyst Samuel Seow of Corporate Travel Management in a note, although it retained its buy rating.
The big banks are higher, led by ANZ’s 2 per cent gain. Westpac is 1.5 per cent higher and ANZ added 0.6 at lunchtime, while CBA – the biggest stock on the bourse – rose 0.8 per cent.
On the economic front, retail sales rose just 0.3 per cent over March, indicating that the consumer spending recovery has been weak, and undershooting most economist expectations, indicated AMP economist My Bui.
“The stagnation in March retail volumes suggests that the recovery will be gradual and limited, with most households still experiencing the impacts of the faster cumulative rise in price levels over the past few years (compared to wages),” she said in a note.
“There are now even more arguments for the RBA to resume its cutting cycle in May.”
S&P Global Ratings has lowered its GDP growth forecasts for “most” countries and raised its US inflation forecast. It is now predicting 1.7 per cent growth to Australian GDP for 2025.
“A seismic and uncertain shift in US trade policy has roiled markets and raised the spectre of a global economic slowdown,” the S&P global economists stated in a research note.
“We see a material slowdown in growth, but do not foresee a US recession at this juncture.”
Overnight, Microsoft and Meta Platforms led Wall Street higher while Amazon and Apple released their results after the closing bell.
The S&P 500 rose 0.6 per cent for an eighth-straight gain, its longest winning streak since August. The Dow Jones added 83 points, or 0.2 per cent, and the Nasdaq composite climbed 1.5 per cent.
Apple’s revenue for the fiscal second quarter topped Wall Street’s expectations, but an uncertain outlook sent shares sliding 3.8 per cent in after-hours trading.
Amazon posted higher first-quarter profit and sales, underscoring the online behemoth’s hold on shoppers looking for low prices in an uncertain economy.
Amazon shares are 3.2 per cent lower in after-hours trading.
Microsoft rallied 7.6 per cent after the software giant said strength in its cloud computing and artificial intelligence businesses drove its overall revenue up 13 per cent from a year earlier.
Meta, the parent company of Facebook and Instagram, also topped analysts’ targets for revenue and profit in the latest quarter. It said AI tools helped boost its advertising revenue, and its stock climbed 4.2 per cent.
They’re two of the most influential stocks within the S&P 500 and other indexes because of their massive sizes, and they weren’t alone. CVS Health, Carrier Global and a bevy of other companies also joined the stream of better-than-expected profit reports that have helped steady Wall Street over the last week. The S&P 500 is back to within 9 per cent of its record set earlier this year, after briefly dropping nearly 20 per cent below the mark.
Still, plenty of uncertainty remains about whether President Donald Trump’s trade war will force the economy into a recession. Even though companies have been reporting better profits for the first three months of the year than analysts expected, many CEOs are remaining cautious about the rest of the year.
General Motors cut its forecast for profit in 2025, for example. It said it’s assuming it will feel a hit of $US4 billion to $US5 billion because of tariffs, and it expects to offset at least 30 per cent of it. GM’s stock slipped 0.4 per cent.
The uncertainty has already shown up in surveys of consumers, which say pessimism is shooting higher about where the economy heading. On Thursday, a couple of reports about the economy came in mixed, following up on several recent updates that suggested it’s weakening.
The first of the reports said more US workers filed for unemployment benefits last week than economists had forecast, setting the stage for a more comprehensive report on the job market arriving Friday.
But a later update said US manufacturing activity was better last month than economists had feared, though it still contracted again.
The fear on Wall Street is for a possible worst-case scenario called “stagflation,” where the economy stagnates yet inflation remains high. The Federal Reserve has no good tools to fix both such problems at the same time. If the Fed were to try to help one problem by adjusting interest rates, it would likely make the other worse.
with AP
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