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I have titled this week’s wrap with the introductory “Forget US tariff talk,” and that was a cruel prank on my part. Because we actually do need to talk about it.
But that’s about as much as we need to, because it’s relevant to what we learned from the ABS this week.
Here’s the important bit: private business investment into machinery in Australia (non-mining) has fallen to yearly lows, down -1.3% in the March quarter, a drop we haven’t seen since the first year of COVID.
Some analysts have called current Australian business conditions for the March quarter as “recessionary.” So, there’s that.
What’s the cause?
The culprit is, indeed, global macro uncertainty borne from…well, you can guess what. Starts with “T”, rhymes with “Rump.”
Not helping matters at all, then, is we got some more gloom this week: US QoQ GDP actually came in negative at -0.2%. Another quarter of that, and the US will be in a technical recession. Finally, some good news!
(Just for absolute clarity, I am being sarcastic.)
What does the future of Australia look like for CY2025, let alone FY26? That depends on what happens in the coming weeks and months. Don’t forget Trump’s “reciprocal tariffs” are set to be un-paused in July when that 90-day period winds up.
Still, further evidence that world economies just can’t catch a break in the 2020’s. But while many economies may be floundering (while India expects GDP growth over 6% this year,) stock markets remain robust.
NVIDIA earnings strong, AI hype softer
Helping the USA’s was NVDIA earnings this week. The company says AI demand is still going strong, it’s still very bullish on AI – so is the computer company Dell, a surprise winner in this week’s US earnings reports.
However, market reaction wasn’t as strong as last year’s NVIDIA results which one SAXO Markets analyst described as “insane.” When it comes to the AI narrative around NVIDIA in 2025, it looks like the market has been given a nice tranquilliser.
Costco came out too as a surprise winner – though, a lot of that is because Americans are bulk buying while they can, ahead of an apparent trade war and probably motivated by memories of bulk buying for COVID lockdowns.
Good news, at any rate, for CostCo.
And so what else went on this week?
Macquarie Bank believes that copper’s bull run (as a commodity) could be about to commence, given large production issues on the international stage.
Earlier this month, Ivanhoe Mines’ Kamoa-Kakula copper mine as effectively shut down due to flooding, and now Macquarie analysts see possible continued upside for the orange metal – tariffs be damned.
There was Oz inflation, too, with TMI (core) jumping +0.1% and actually beating estimates somewhat – but not by much. And seeing as the RBA see Australian inflation climbing back up later this year, well, it’s not like nobody’s been warned.
Uranium also climbed over +5% in May – we’ll see how long that lasts.
In the background, gold is more or less trading sideways (if you average it) and Bitcoin, the new digital safe haven (with an investor base more wiling to tolerate Trump) is currently outperforming.
One last note on the USA: Federal Reserve Chair Jerome Powell was summoned to the White House for a meeting with an agenda that is probably obvious. Following that, the central bank released a rare statement outlining its independence.
Until next week.
Australian Equities
Woodside popped nearly +9% in May as projects come online; oil swings; earnings impress
Predictive Discovery and Resolute Mining caught up in latest permit cancellations in Africa
Woodside chasing minnow Far Ltd for $10M; FAR Ltd tells Woodside to get stuffed
International Equities
NVIDIA earnings continue to point to increasing demand for AI, market hyped but not like 2024
In a similar fashion, once again, AI news also helps lift Dell in minds of investors
Costco beats estimates as consumers bulk buy in the midst of Trump’s tariff tirades
Australian Economy
Oz Inflation comes in slightly higher than expected in line with RBA forecasts but not analysts
Non-mining private business investment Oz-wide falls -0.9% in March quarter
Retail sales come in flat down -0.1% for April as consumers keep behaviour unchanged
International Economies
US QoQ GDP Growth comes in at -0.2% using 2nd estimates
Japan’s national debt now twice the size of its GDP
India expecting to hit a GDP growth rate of up to +6.8% for FY26 as world toils
Commodities
Uranium up +5.4% in May as Trump helps to boost nuclear narratives
Gold rides waves of volatility but ultimately traded sideways through May
But Bitcoin outperforms, acting like a Trump-motivated safe haven
Geopolitics, Regulatory, Odds & Ends
Trump meets with Jerome Powell in direct push to sway Fed into cutting rates
Days after calling Trump great, NVIDIA’s Huang makes rare criticism of Trump-China chip ban
More strife in Libya as Eastern Government says oilfields could see insurance write-off
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