It’s Monday the 7th of April, 2025 and global financial markets are in turmoil with the ASX set to tumble, PM Anthony Albanese promises $2.5 billion for batteries, super funds are hit by a cyberattack and the world's richest people lose a combined $900 billion in two trading sessions.
Global financial markets are in turmoil with the ASX set to fall sharply this morning – futures markets suggest 4.3pc – on the back of US tariffs, a retaliatory impost from China and fears of a global recession. A 4.3pc fall is worth about $115 billion, which would take it to its lowest level since January last year. It fell 2.5pc on Friday and is already down 10pc since its peak six weeks ago.
PM Anthony Albanese says a re-elected ALP government will spend $2.3bn providing 30pc rebates on household battery systems from July this year. Housing and batteries are one of the focal points of this campaign, with the Opposition expected to announce a program before the 3 May poll.
An unknown number of superannuation fund members have lost thousands of dollars from their retirement savings accounts in what appears to be a co-ordinated cyberattack on Australia’s superannuation sector. Major industry funds Australian Retirement Trust, AustralianSuper, REST and Hostplus were all breached.
Budget pressures have eased for households and the proportion that are behind on mortgage payments has stabilised at pre-pandemic levels, according to the Reserve Bank. However it is worried that expectations of lower interest rates could cause households to take on too much debt.
On Thursday and Friday of last week, the world’s 500 richest people suffered the biggest two-day loss ever on the Bloomberg Billionaires Index as fallout from President Donald Trump’s tariff announcement decimated markets across the globe. Billionaires on the wealth list lost a collective $US536 billion ($887 billion) from Thursday’s New York stock market open to Friday’s close.
Fear-o-meter
The thing that investment markets dislike more than bad news is uncertainty. At least when there's bad news, opportunities emerge. Unfortunately, last week markets got both bad news and uncertainty. The ten per cent tariffs on Australian exports to the US, and much higher imposts on other countries' goods entering America, is the bad news. The fact that President Donald Trump immediately suggested countries could negotiate the tariff rates lower provides the uncertainty.
Wall Street sold off as did the local sharemarket. It is unlikely to get much better because there is no sense that the Trump Administration will become more certain.
What might help is a market crash. If Wall Street drops 20 per cent below its peak - it's currently closer to 15 per cent - then maybe Trump and his team will start listening to experts. Or maybe members of the Republican Party will make enough noise that the President will have to listen. The bottom line: markets need some certainty.
Who's talking today?
Not sure what to make of last week's tariff announcements? AMP's Dr Shane Oliver explains:
The chance of a US recession ("close to 50-50")
What to expect in terms of interest rate cuts here (one in May, then "a couple more by the end of the year")
The big threat to our own economy ("less demand for our raw material exports")
The calculations behind the tariffs ("pure nonsense")
Electric vehicles made up less than 5pc of Australian new car sales last month. The top five vehicles sold were a mix of the usual suspects (dual-cab utes and 4WDs). For a second month in a row the BYD Shark 6 came in sixth, but Tesla is nowhere to be seen.
