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To answer the question in the headline first of all – the fact the NASDAQ officially went bearish on Friday is all you may need to know.
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At the same time, the S&P500 had its worst two-day run since early COVID-19. JPMorgan, for its part, has boosted the odds of a global recession to 60%.
So, in that context, it was unlikely the ASX 200 was ever going to have a good run on contrarian sentiment. The signal from the U.S. is just too loud right now, and it’s got nothing good to say.
The defining Australian share market gauge – the ASX 200, or XJO – fell -6% in the first fifteen minutes of Monday trades, pointing to widespread perceptions from investors and traders alike the Aussie bourse hasn’t bottomed yet.
(Perhaps understandably, the Betashares Aus Bear ETF rocketed up +12.6% in the first twenty minutes of trades.)
The ASX200 briefly lost as much as -6.2%, then levelled out around 7,200pts – pretty much in line with futures. That could suggest the 7,200pts mark is around where the market’s collective wisdom currently puts value.
Futures were tipping a loss as bad as -6.4% to a low of 7,121pts before the market opened on Monday; those estimates were spot on. The Aussie tech index fell -7% in the first twelve minutes of trade, corresponding to the official bear market over on the NASDAQ.
So is this as low as the ASX can go? Perhaps not, because there’s more bad news.
As they currently stand at 10.23am AEST on Monday, S&P500 futures suggest a -4.28% fall overnight with the NASDAQ to shed another -5.4%.
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Another sustained night of poor performance on Wall Street will all but lock in a red Tuesday down under, but as for how steep that fourth day of declines could look will depend on where we close on Monday and whatever headlines come out of an increasingly unpredictable U.S.
Behind all of this is of course Donald Trump’s April 2 “Liberation Day” tariffs that kicked in late last week. To that end, tech executives are reportedly preparing to visit Trump’s golf resort in a bid to “talk sense.”
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