The laggards
Utilities were in red,with falls in Origin Energy (down 0.3 per cent) and Meridian Energy (down 2 per cent). Real estate also weathered a tough day,with the Goodman Group shedding 1 per cent and shopping centre owners Vicinity,Stockland and Scentre losing 0.7 per cent,1.2 per cent and 0.1 per cent respectively.
Energy was mixed with Woodside Energy down 0.9 per cent,while Yancoal was up 0.7 per cent.
The four big banks all closed down,reversing gains from the morning with CBA (down 0.3 per cent) Westpac (down 0.1 per cent),ANZ (down 0.2) and NAB (down 0.2 per cent). Westpac on Tuesday announced it had appointed Paul Fowler as the chief executive of its business and wealth division,effective mid-year. Fowler has been with the Commonwealth Bank of Australia for the past 10 years,and was most recently its executive general manager of regional and agribusiness banking.
“Paul has built an impressive track record of success over a long career,most recently leading business banking across regional Australia for CBA,” Westpac chief executive Anthony Miller said.
The lowdown
Overnight,US stocks pared their losses after Mexican President Claudia Sheinbaum said tariffs on her country’s goods are on hold for a month following a conversation with Trump. The Dow even turned higher briefly in the afternoon for a small gain. After trading closed,Canadian Prime Minister Justin Trudeau announced a similar deal with the US.
Much of Wall Street had been hoping Trump’s talk of tariffs through the presidential campaign was just that,talk,and an opening point for negotiations with US trading partners instead of a permanent policy. Monday’s swivel on Mexico leaves open the question of whether Trump is using tariffs as merely a tool for negotiations.
But when traders came into Monday morning thinking tariffs were imminent,fear rose quickly about the potential for an escalating trade war that could damage economies worldwide,including the United States.
“Living in the Midwest,I might feel the trade war soonest and most,” said Brian Jacobsen,chief economist at Annex Wealth Management,because of how much crude oil flows over the northern US border to make petrol. “Our refiners can’t easily switch away from Canadian crude.”
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Crude oil prices swung on Monday amid the uncertainty. The price for a barrel of benchmark US crude went from $US72.53 on Friday to nearly $US75 before the US stock market opened Monday to briefly falling back toward $US72.
Trump himself warned Americans they may feel “some pain” from the tariffs,which he said would be “worth the price” to make America great again. He also said Sunday night that import taxes will “definitely happen” with the European Union and possibly with the United Kingdom as well.
Some on Wall Street remain sceptical about how long a trade war may last,especially considering how much attention Trump pays to the stock market. Anescalating trade war can send stocks skidding,as Monday morning quickly demonstrated,and “significant stock market volatility could lead to a change in approach,” said Solita Marcelli,chief investment officer,Americas,at UBS Global Wealth Management.
Tweet of the day
Quote of the day
“If Donald Trump’s decision to slap tariffs on Canada and Mexico was,asThe Wall Street Journal described it,the dumbest trade war ever,then his decision to pause them even before they were implemented validates that judgment.” Read more here of Stephen Bartholomeusz’s opinion piece here.
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