Source : THE AGE NEWS
By Staff reporter
The Australian sharemarket remains flat in afternoon trade after US stocks drifted lower overnight, with Tesla’s plunge weighing on Wall Street as Donald Trump and Elon Musk’s feud continued to escalate.
The S&P/ASX200 was down 0.1 points to 8537.0 at 12.30pm AEST, with eight of 11 industry sectors in positive territory, led by utilities and energy stocks. Tech and real estate stocks are the heaviest weights on the bourse.
The bromance between Trump and Musk is souring quickly.Credit: AP
Mining stocks rose in early trade, boosted by an announcement from the US president overnight that he had a “very good phone call” with Chinese President Xi Jinping as the two superpowers look to reach a trade deal. Fortescue added 1.1 per cent, BHP gained 0.9 per cent and Rio Tinto edged up 0.1 per cent. Oil giant Woodside added 0.9 per cent and Santos gained 0.6 per cent.
Stocks tied to rare earths slumped on expectations the Xi-Trump trade talk progress could pave the way for China to ease export restrictions on the critical minerals. Pilbara Minerals fell 5 per cent, Northern Minerals shed 3.5 per cent and Lynas lost 0.8 per cent.
Financial stocks were mixed. NAB and Westpac both added 0.5 per cent, Commonwealth Bank – the biggest stock on the index – lost 0.7 per cent, while ANZ Bank retreated 0.3 per cent.
The Australian dollar dipped below US65¢ on Friday morning after gains overnight. It was 0.2 per cent higher at US64.97¢ at 12.30pm AEST.
Overnight, the S&P 500 fell 0.5 per cent for its first drop in four days. After sprinting through May and rallying within a couple of good days’ worth of gains of its all-time high, the index at the centre of many retirement accounts has lost momentum.
The heaviest weight on Wall Street was Tesla, which tumbled 14.3 per cent. It has lost nearly 30 per cent of its value so far this year as chief executive Elon Musk’s relationship with Trump sours amid a disagreement over the president’s signature bill of tax cuts and spending. The EV maker lost about $US150 billion ($230 billion) in value, sending it below the $US1 trillion benchmark.
Trading activity in options markets suggests investors believe the next big move for the S&P 500 could come on Friday, when the US Labour Department will say how many more jobs employers created than eliminated during May. The expectation on Wall Street is for a slowdown in hiring from April.
A resilient job market has been one of the linchpins propping up the US economy, and the worry is that all the uncertainty created by Trump’s on-and-off tariffs could push businesses to freeze their hiring.
A report on Thursday said more US workers applied for unemployment benefits last week than economists expected. New applications for jobless benefits rose by 8000 to 247,000 for the week ending May 31, according to the US Labour Department. The number remains relatively low compared with historical data but it still hit its highest level in eight months.
Hopes that Trump will lower his tariffs after reaching trade deals with other countries have been among the main reasons the S&P 500 has rallied back so furiously since dropping roughly 20 per cent from its record two months ago. It’s now back within 3.3 per cent of its all-time high.
Wall Street has struggled to gain traction this week.Credit: Bloomberg
Trump boosted such hopes on Thursday after saying he had “a very good phone call” with Xi about trade and that “their respective teams will be meeting shortly at a location to be determined”.
It’s an easing of tensions after the world’s two largest economies accused each other of violating the agreement that had paused their stiff tariffs against each other, which in turn threatened to drag the global economy into a recession.
To be sure, nothing is assured amid Trump’s on-and-off rollout of tariffs, and markets took the latest detente with China relatively coolly.
Among Wall Street’s winners was MongoDB, which jumped 12.8 per cent after the database company likewise delivered a stronger profit than analysts expected.
