April 9, 2025 • 16 mins
Stock markets staged a dramatic rebound in the wake of the US president’s pause on tariffs, following a tumultuous week that’s caused anxiety for investors and super fund members throughout Australia.
This week on the podcast, host Chris Bourke and Bloomberg News cross asset reporter Richard Henderson unpack the unprecedented market turmoil and ask: how does this all play out?
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Episode Transcript
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Speaker 1 (00:01):
Would you be open to a pause in tariffs will
allow for negotiation.
Speaker 2 (00:06):
Well, we're to look at it.
Speaker 1 (00:07):
There. We're hearing that President Trump has announced that there
will be a ninety day pause on reciprocal tariffs.
Speaker 3 (00:16):
There's a lot of winning out there, and we're having
a good day in the stock market, as you can see,
an all time record day and hopefully continues.
Speaker 2 (00:22):
I think it's should If you've been too nervous to
look at your super fund lately, you're not alone. The
global fallout from Donald Trump's Liberation Day tariffs as uphended
stock markets and sparked some of the biggest volatility in history. Hello,
I'm Chris Burke and welcome to the Bloomberg Australia Podcast.
(00:42):
Today we're discussing why Trump's ever changing global tariffs are
creating so much grief for investors. But before we do that,
a reminder that there is actually an election campaign underway,
so let's just have a quick check in on the
campaign trail. Ben Westcott is Bloomberg's government reporter. Ben. What's
been the big story this week?
Speaker 1 (01:02):
Hey, Chris, Well, primiuster Anthony Albernizi has a skip in
his step heading towards the end of the second week
of the Australian election campaign. A News poll earlier this
week found his government was leading the Liberal National Coalition
fifty two to forty eight percent on a two party
preferred basis. That's their best result in eleven months. That
News poll result put a heavy emphasis on Peter Dutton,
(01:25):
the opposition leader's performance at the first debate on Tuesday night,
hosted by Sky News, and while the Liberal Party thinks
he did pretty well, the audience itself gave the debate
Prime Minister Alberizi forty four cent to thirty five percent.
All of this has boosted Labor heading into the third
week of the campaign, where we'll see the second leader's
(01:46):
debate hosted by the ABC and a few more pole
results that will confirm whether or not Donald Trump's tariffs
have been a good or a bad thing for the
Labor government.
Speaker 2 (01:55):
Thank you, Ben, See you next week. Okay, on with
the show. It's Thursday, April two, heron Melbourne And while
we were sleeping last night, President Donald Trump announced a
ninety day pause on those higher tariffs that have royaled
stock markets over the past week, while raising duties on
China to one hundred and twenty five percent. That was
(02:18):
met with a rally in the US that we haven't
seen the likes of since the global financial crisis of
two thousand and eight. I don't know about you, but
I think I'm suffering from motion sickness. Rich Henderson my
colleague in Bloomberg's Melbourne bureau and writer of all things markets.
He's here to help us make sense of things Rich.
(02:39):
A week ago, Donald Trump wandered into the White House
Rose Garden and announced reciprocal tariffs on dozens of countries
that pretty much upended global markets in the following days. Rich,
it seems that the world is still subject to these
tariffs in ninety days time. So why did the markets
go so wild overnight?
Speaker 3 (03:01):
That's a great question. So basically the rebound we saw
in the US on Wednesday was driven by this idea
that there will be a reprieve. Basically, investors have been
waiting for signs that Trump wants to cut deals, and
the big sell off we saw at the end of
last week that spilled into this week was all about
(03:24):
this idea. It had become a bit more serious. You know,
Trump was towing a much harder line than he has
in the past. It was a broader and more ambitious
gambit from the White House, and it really was a
rewiring of global trade. That's what Trump was setting out.
Now investors finally got a sense that actually, this is
all about deal making. This is Trump trying to cut deals,
(03:47):
trying to get a better deal for the US without
hurting global economic growth, US economic growth. And so that's
really what the markets are responding to. They're saying, Okay, yeah,
he does want deals. He's not going to tack the economy.
Really his goal. He wants a better basically deal for
US consumers and US businesses, more manufacturing in the US,
(04:07):
that sort of thing.
Speaker 2 (04:09):
Yeah. I mean, the deadline passed yesterday I think at
two o'clock our time, and so it did seem that
this was he was digging his heels and this was
going ahead. Australia got off comparatively lightly with these tariffs,
with just ten percent. It looks like it looks like
we're still subject to that. But we have seen some
(04:31):
massive swings in the ASX this week and the Aussie
dollar on the back of these tariffs. So why have
our markets been reacting so violently?
Speaker 3 (04:39):
A lot of the movement in ossie stocks is related
to that global volatility. We're not insulated from that. And
keep in mind that some of the biggest listed companies
in Australia I'm thinking like BHP, rio tinto the big
mining giants, but also James Hardy. They sell building materials
in the US. They're one of the major global suppliers.
(05:00):
They are gaining a lot of revenues from outside of Australia,
so they're really responsive to what might happen in the
US and globally. So that's one reason that you see
some of that volatility around the rest of the world,
in the US hitting Australian Australian markets and also China.
The tariffs Trump is unveiled, he's actually ratcheted them up
(05:20):
against China even through this reprieve we've just seen. So
that's going to have potentially a big flow and effect
for Australia.
Speaker 2 (05:29):
Of course, and that's a good point. It does look
like this as this evolves, that maybe this is just
evolving into a massive trade war between the world's two
largest economies.
Speaker 3 (05:39):
Yeah, and I think again what investors will be looking
for is the Donald Trump playbook. He wants a deal.
What's the deal likely to look like with China? That's
what I think he's going for. That's what investors I'm
talking to are thinking. But where does it end. It
could end with some larger agreement between the two world's
(06:00):
biggest economies.
Speaker 2 (06:02):
Of course, central banks don't like any of this. They
hate uncertainty. And this is all happening just as as
central banks all around the world finally started to be
getting inflation down. So what do these wide ranging tariffs
mean for inflation? Are they now?
Speaker 3 (06:21):
Do?
Speaker 2 (06:22):
They now represent the bigger threat?
Speaker 3 (06:24):
So the relationship between tariffs and inflation, it's obviously all
very intertwined. Tariffs are a levy like attacks. They have
to be borne by businesses or consumers, and those higher
prices can filter through the economy that is inflation, that
is inflationary, so investors. Central banks have to respond to this. Obviously,
(06:46):
like the Federal Reserve in the US or the RBA
in Australia, They're going to wait to have actual concrete
data coming in showing this impact. They're not really going
to want to get too far ahead of it. They
have to be very cognizant and aware of it. Actually
also need to not rely on the bluster of Donald
Trump actually need to rely on hard data. So there
is a little bit of a delay if you like there.
(07:08):
But obviously tariffs can be inflationary foreshore.
Speaker 2 (07:12):
Yeah, but markets however, are making up their own mind
as far as rate cuts go. What's the lat is there?
And did did the action overnight change anything?
Speaker 3 (07:24):
The action did change things for the Australian context. So THEBA,
the financial markets were pricing in five RBA rate cuts
yesterday today after the big rally in stocks overnight in
the US. Now only four rate cuts are anticipated. But
(07:45):
keep in mind a week ago or just over a
week ago, prior to the Liberation Day Trump tariff announcements,
there were only three rate cuts twenty five basis point
rate cuts priced in for the RBA to do this year.
So it is higher. It's at four now.
Speaker 2 (08:04):
So markets are still expecting that these targets to be
inflationary and impact and impact those Central Bank rate decisions.
And I guess that's perhaps one silver lining for some
of us at least who have a mortgage.
Speaker 3 (08:20):
Yeah, it can be, because you've got to keep in
mind though that you know, rate cuts mean the economy
isn't doing well, you know, so if everything's going great,
you don't need to cut rates. So those rate cuts
really denote the idea that rates are a little bit
elevated and inflation is still coming down towards target levels
that the RBA would be looking for. So we should
(08:41):
be getting some of those rate cuts flowing through. But
there's two sides to it. They're not always a great
thing because it does mean you're cutting rates to stimulate
the ECONO exactly.
Speaker 2 (08:50):
Yet those are important points. As I was alluding to before,
you could be forgiven for forgetting that Australia is actually
in the middle of an election campaign. What effect is
this turmoil all having on the campaign.
Speaker 3 (09:04):
That's a great question. So there's two signs for me
in the past week that tell me that it could
have a bearing. The first one is a gauge of
Australian consumer confidence from Westpac. This fell six percent to
a six month low. But the important thing for me
was that there was a ten percent drop among survey
respondents who answered after the Liberation Day tariff announcements. Couple
(09:30):
that with the election debate between Peter Dutton and Anthony Albanesi,
in which cost of living questions played a big role.
Speaker 2 (09:38):
Now.
Speaker 3 (09:39):
That tells me how each leader explains to the Australian
electorate how they will deal with Trump and the fallout
of any potential trade war and tariffs that could be
a big feature of the campaign.
Speaker 2 (09:51):
We still have three weeks until the election day, are
so who knows what financial markets will be looking like
then when we come back. What do all these wild
market swings mean for our super funds? Welcome back to
(10:13):
the Bloomberg Australia Podcast. I'm Chris Burke, and today I'm
talking to Cross Asset reporter Rich Henderson about the turmoil
that we're seeing in markets and how that is affecting
us in Australia. Speaking of which, super funds have been
a big talking point for many people this week. I
was actually brave enough to check my superbalance this spawning
(10:34):
and showed a six percent loss over the past three months,
which really dragged down the annual performance to almost nothing.
Of course, that could change after last night's action, and
then it could change again tomorrow. Who knows. But you
know a lot of people just can't stomach this kind
of volatility. It's really too much for them. And I'm sure,
(10:58):
there's all sorts of there's all sorts of concerns in
Australian workers this week about what's happening to their balances.
But Rich, as you know, about a third of super
Fund's investments are made up of overseas shares, with a
big chunk of them in the US. What does this unprecedented?
(11:20):
Because it is unprecedented. I think this volatility mean for
the outlook for our retirement savings.
Speaker 3 (11:25):
Indeed, yeah, it's been a really volatile period. The key lesson,
I think, or at least one of them, is the
tenants of staying invested. You know, you're going to see
a lot of volatility. We've seen that already. The big
bounce back overnight in the S and P five hundred,
which is the pre eminent gauge of the US stock market,
(11:47):
the biggest days since two thousand and eight during the
financial crisis. If investors had sort of wound back their
equity allocations or their US stock allocations after the big
selling pressure of late last week early this week, after
those tariff announcements, they wouldn't have been able to capture
that rebound. And so it's a really great lesson And
(12:08):
obviously I'm not providing any financial advice here, but it's
a great lesson in the tenets of staying invested. In
the need to stay invested. So I think the professional
investors at the super funds will be very aware of that,
and they would not have made any massive strident moves
during this period, especially because after a sell off, you
know the damage is already done. You really don't you
don't want to sort of weaken yourself further because the
(12:31):
potential for a rebound, which we actually.
Speaker 2 (12:33):
Saw, yeah, good, good points. So we've seen this massive
relief rally and stocks overnight, which means that a lot
of people made money from buying the dip. As investors
like to say, what about other types of assets? Is
everything now a bye?
Speaker 3 (12:53):
It's a very hard question to answer. So there was
a big kind of question about defensive assets and haven
assets during this volatility. We saw the US dollar perform
quite poorly, usually it's a haven. We saw the Japanese yend,
the Swiss frank do very well. We saw the US
bond market go through this big wobble that caused a
(13:16):
lot of concern among investors. And now the safety of
US government debt is showing itself. The equity market rebound
has now taken money back out of that of treasuries,
which is US government debt. As investors who had gone
into those sort of haven assets to protect themselves from volatility,
(13:37):
well they want to jump back into the stock market
and catch that upswing. So we're seeing a lot of
cross currents and moves like that. But the overall picture
here is that we're still in a very volatile, uncertain
environment and you're getting paid, you're getting rewarded for it
being in risky assets like stocks.
Speaker 2 (13:56):
Yeah, I mean, who would want to be a fund
manager in this environment? Speaking of which, you have been
talking to some of those big investors in the past
few days. How do you think they see this playing
out in the long run? I know you've spoken to
some of those people before before this massive rally yesterday
(14:17):
or overnight, but just in general, how do you see
they see this whole drama playing out in the long run.
Speaker 3 (14:23):
Well, they're responding to the same information we're all seeing.
So you know, one of my best contacts, he's a
guy who runs a hedge fund in Singapore. You know,
he is basically saying he's been waiting for signs that
this whole tariff push by Trump is around setting deals
(14:43):
and he really never wanted big, big tariffs on anyone.
He just wants to get great deals, and now we're
seeing evidence of that he believes, so that's a real
positive for him. Other folks that I've spoken to are
basically very cautious. They're saying, you know, all this uncertainty,
it's not good for business. We could see recession in
(15:04):
the US. That's quite a big risk. Not that it's
definitely going to happen, but one clouding factor here is
that some consumers in the US have actually gone out
and made big purchases of washing machines or iPhones prior
to tariff's coming into play, because they don't want to
be hit with those extra costs. And that's actually broad
(15:26):
a load of activity, it's front load of that activity,
and so when these tariffs start to take effect and
flow through the economic data, it might be three or
six months before you actually start to see that impact,
and so there's a lot of uncertainty between now and then,
so people are really just wanting to take their time,
make sure they understand what's going on before they make
any big moves.
Speaker 2 (15:47):
Rich. As you know, we don't like cliches very much
at Bloomberg, but I'm going to say it. The only
certainty is uncertainty. That's it.
Speaker 3 (15:55):
Yeah, it's correct.
Speaker 2 (15:57):
Okay. Thank you for joining us, Rich, and thank you
for listening to the Bloomberg Australia podcast. I'm Chris Burke.
This episode was recorded on the traditional lands of the
Wurundrii people. It was produced by Paul Allen and edited
by Rebecca Jones and Ainsley Chandler. Don't forget to follow
and review the show wherever you get your podcasts, and
sign up to Bloomberg's free daily newsletter, Australia Briefing. Go
(16:20):
to Bloomberg dot com to subscribe.
Would you be open to a pause in tariffs will
allow for negotiation.
Speaker 2 (00:06):
Well, we're to look at it.
Speaker 1 (00:07):
There. We're hearing that President Trump has announced that there
will be a ninety day pause on reciprocal tariffs.
Speaker 3 (00:16):
There's a lot of winning out there, and we're having
a good day in the stock market, as you can see,
an all time record day and hopefully continues.
Speaker 2 (00:22):
I think it's should If you've been too nervous to
look at your super fund lately, you're not alone. The
global fallout from Donald Trump's Liberation Day tariffs as uphended
stock markets and sparked some of the biggest volatility in history. Hello,
I'm Chris Burke and welcome to the Bloomberg Australia Podcast.
(00:42):
Today we're discussing why Trump's ever changing global tariffs are
creating so much grief for investors. But before we do that,
a reminder that there is actually an election campaign underway,
so let's just have a quick check in on the
campaign trail. Ben Westcott is Bloomberg's government reporter. Ben. What's
been the big story this week?
Speaker 1 (01:02):
Hey, Chris, Well, primiuster Anthony Albernizi has a skip in
his step heading towards the end of the second week
of the Australian election campaign. A News poll earlier this
week found his government was leading the Liberal National Coalition
fifty two to forty eight percent on a two party
preferred basis. That's their best result in eleven months. That
News poll result put a heavy emphasis on Peter Dutton,
(01:25):
the opposition leader's performance at the first debate on Tuesday night,
hosted by Sky News, and while the Liberal Party thinks
he did pretty well, the audience itself gave the debate
Prime Minister Alberizi forty four cent to thirty five percent.
All of this has boosted Labor heading into the third
week of the campaign, where we'll see the second leader's
(01:46):
debate hosted by the ABC and a few more pole
results that will confirm whether or not Donald Trump's tariffs
have been a good or a bad thing for the
Labor government.
Speaker 2 (01:55):
Thank you, Ben, See you next week. Okay, on with
the show. It's Thursday, April two, heron Melbourne And while
we were sleeping last night, President Donald Trump announced a
ninety day pause on those higher tariffs that have royaled
stock markets over the past week, while raising duties on
China to one hundred and twenty five percent. That was
(02:18):
met with a rally in the US that we haven't
seen the likes of since the global financial crisis of
two thousand and eight. I don't know about you, but
I think I'm suffering from motion sickness. Rich Henderson my
colleague in Bloomberg's Melbourne bureau and writer of all things markets.
He's here to help us make sense of things Rich.
(02:39):
A week ago, Donald Trump wandered into the White House
Rose Garden and announced reciprocal tariffs on dozens of countries
that pretty much upended global markets in the following days. Rich,
it seems that the world is still subject to these
tariffs in ninety days time. So why did the markets
go so wild overnight?
Speaker 3 (03:01):
That's a great question. So basically the rebound we saw
in the US on Wednesday was driven by this idea
that there will be a reprieve. Basically, investors have been
waiting for signs that Trump wants to cut deals, and
the big sell off we saw at the end of
last week that spilled into this week was all about
(03:24):
this idea. It had become a bit more serious. You know,
Trump was towing a much harder line than he has
in the past. It was a broader and more ambitious
gambit from the White House, and it really was a
rewiring of global trade. That's what Trump was setting out.
Now investors finally got a sense that actually, this is
all about deal making. This is Trump trying to cut deals,
(03:47):
trying to get a better deal for the US without
hurting global economic growth, US economic growth. And so that's
really what the markets are responding to. They're saying, Okay, yeah,
he does want deals. He's not going to tack the economy.
Really his goal. He wants a better basically deal for
US consumers and US businesses, more manufacturing in the US,
(04:07):
that sort of thing.
Speaker 2 (04:09):
Yeah. I mean, the deadline passed yesterday I think at
two o'clock our time, and so it did seem that
this was he was digging his heels and this was
going ahead. Australia got off comparatively lightly with these tariffs,
with just ten percent. It looks like it looks like
we're still subject to that. But we have seen some
(04:31):
massive swings in the ASX this week and the Aussie
dollar on the back of these tariffs. So why have
our markets been reacting so violently?
Speaker 3 (04:39):
A lot of the movement in ossie stocks is related
to that global volatility. We're not insulated from that. And
keep in mind that some of the biggest listed companies
in Australia I'm thinking like BHP, rio tinto the big
mining giants, but also James Hardy. They sell building materials
in the US. They're one of the major global suppliers.
(05:00):
They are gaining a lot of revenues from outside of Australia,
so they're really responsive to what might happen in the
US and globally. So that's one reason that you see
some of that volatility around the rest of the world,
in the US hitting Australian Australian markets and also China.
The tariffs Trump is unveiled, he's actually ratcheted them up
(05:20):
against China even through this reprieve we've just seen. So
that's going to have potentially a big flow and effect
for Australia.
Speaker 2 (05:29):
Of course, and that's a good point. It does look
like this as this evolves, that maybe this is just
evolving into a massive trade war between the world's two
largest economies.
Speaker 3 (05:39):
Yeah, and I think again what investors will be looking
for is the Donald Trump playbook. He wants a deal.
What's the deal likely to look like with China? That's
what I think he's going for. That's what investors I'm
talking to are thinking. But where does it end. It
could end with some larger agreement between the two world's
(06:00):
biggest economies.
Speaker 2 (06:02):
Of course, central banks don't like any of this. They
hate uncertainty. And this is all happening just as as
central banks all around the world finally started to be
getting inflation down. So what do these wide ranging tariffs
mean for inflation? Are they now?
Speaker 3 (06:21):
Do?
Speaker 2 (06:22):
They now represent the bigger threat?
Speaker 3 (06:24):
So the relationship between tariffs and inflation, it's obviously all
very intertwined. Tariffs are a levy like attacks. They have
to be borne by businesses or consumers, and those higher
prices can filter through the economy that is inflation, that
is inflationary, so investors. Central banks have to respond to this. Obviously,
(06:46):
like the Federal Reserve in the US or the RBA
in Australia, They're going to wait to have actual concrete
data coming in showing this impact. They're not really going
to want to get too far ahead of it. They
have to be very cognizant and aware of it. Actually
also need to not rely on the bluster of Donald
Trump actually need to rely on hard data. So there
is a little bit of a delay if you like there.
(07:08):
But obviously tariffs can be inflationary foreshore.
Speaker 2 (07:12):
Yeah, but markets however, are making up their own mind
as far as rate cuts go. What's the lat is there?
And did did the action overnight change anything?
Speaker 3 (07:24):
The action did change things for the Australian context. So THEBA,
the financial markets were pricing in five RBA rate cuts
yesterday today after the big rally in stocks overnight in
the US. Now only four rate cuts are anticipated. But
(07:45):
keep in mind a week ago or just over a
week ago, prior to the Liberation Day Trump tariff announcements,
there were only three rate cuts twenty five basis point
rate cuts priced in for the RBA to do this year.
So it is higher. It's at four now.
Speaker 2 (08:04):
So markets are still expecting that these targets to be
inflationary and impact and impact those Central Bank rate decisions.
And I guess that's perhaps one silver lining for some
of us at least who have a mortgage.
Speaker 3 (08:20):
Yeah, it can be, because you've got to keep in
mind though that you know, rate cuts mean the economy
isn't doing well, you know, so if everything's going great,
you don't need to cut rates. So those rate cuts
really denote the idea that rates are a little bit
elevated and inflation is still coming down towards target levels
that the RBA would be looking for. So we should
(08:41):
be getting some of those rate cuts flowing through. But
there's two sides to it. They're not always a great
thing because it does mean you're cutting rates to stimulate
the ECONO exactly.
Speaker 2 (08:50):
Yet those are important points. As I was alluding to before,
you could be forgiven for forgetting that Australia is actually
in the middle of an election campaign. What effect is
this turmoil all having on the campaign.
Speaker 3 (09:04):
That's a great question. So there's two signs for me
in the past week that tell me that it could
have a bearing. The first one is a gauge of
Australian consumer confidence from Westpac. This fell six percent to
a six month low. But the important thing for me
was that there was a ten percent drop among survey
respondents who answered after the Liberation Day tariff announcements. Couple
(09:30):
that with the election debate between Peter Dutton and Anthony Albanesi,
in which cost of living questions played a big role.
Speaker 2 (09:38):
Now.
Speaker 3 (09:39):
That tells me how each leader explains to the Australian
electorate how they will deal with Trump and the fallout
of any potential trade war and tariffs that could be
a big feature of the campaign.
Speaker 2 (09:51):
We still have three weeks until the election day, are
so who knows what financial markets will be looking like
then when we come back. What do all these wild
market swings mean for our super funds? Welcome back to
(10:13):
the Bloomberg Australia Podcast. I'm Chris Burke, and today I'm
talking to Cross Asset reporter Rich Henderson about the turmoil
that we're seeing in markets and how that is affecting
us in Australia. Speaking of which, super funds have been
a big talking point for many people this week. I
was actually brave enough to check my superbalance this spawning
(10:34):
and showed a six percent loss over the past three months,
which really dragged down the annual performance to almost nothing.
Of course, that could change after last night's action, and
then it could change again tomorrow. Who knows. But you
know a lot of people just can't stomach this kind
of volatility. It's really too much for them. And I'm sure,
(10:58):
there's all sorts of there's all sorts of concerns in
Australian workers this week about what's happening to their balances.
But Rich, as you know, about a third of super
Fund's investments are made up of overseas shares, with a
big chunk of them in the US. What does this unprecedented?
(11:20):
Because it is unprecedented. I think this volatility mean for
the outlook for our retirement savings.
Speaker 3 (11:25):
Indeed, yeah, it's been a really volatile period. The key lesson,
I think, or at least one of them, is the
tenants of staying invested. You know, you're going to see
a lot of volatility. We've seen that already. The big
bounce back overnight in the S and P five hundred,
which is the pre eminent gauge of the US stock market,
(11:47):
the biggest days since two thousand and eight during the
financial crisis. If investors had sort of wound back their
equity allocations or their US stock allocations after the big
selling pressure of late last week early this week, after
those tariff announcements, they wouldn't have been able to capture
that rebound. And so it's a really great lesson And
(12:08):
obviously I'm not providing any financial advice here, but it's
a great lesson in the tenets of staying invested. In
the need to stay invested. So I think the professional
investors at the super funds will be very aware of that,
and they would not have made any massive strident moves
during this period, especially because after a sell off, you
know the damage is already done. You really don't you
don't want to sort of weaken yourself further because the
(12:31):
potential for a rebound, which we actually.
Speaker 2 (12:33):
Saw, yeah, good, good points. So we've seen this massive
relief rally and stocks overnight, which means that a lot
of people made money from buying the dip. As investors
like to say, what about other types of assets? Is
everything now a bye?
Speaker 3 (12:53):
It's a very hard question to answer. So there was
a big kind of question about defensive assets and haven
assets during this volatility. We saw the US dollar perform
quite poorly, usually it's a haven. We saw the Japanese yend,
the Swiss frank do very well. We saw the US
bond market go through this big wobble that caused a
(13:16):
lot of concern among investors. And now the safety of
US government debt is showing itself. The equity market rebound
has now taken money back out of that of treasuries,
which is US government debt. As investors who had gone
into those sort of haven assets to protect themselves from volatility,
(13:37):
well they want to jump back into the stock market
and catch that upswing. So we're seeing a lot of
cross currents and moves like that. But the overall picture
here is that we're still in a very volatile, uncertain
environment and you're getting paid, you're getting rewarded for it
being in risky assets like stocks.
Speaker 2 (13:56):
Yeah, I mean, who would want to be a fund
manager in this environment? Speaking of which, you have been
talking to some of those big investors in the past
few days. How do you think they see this playing
out in the long run? I know you've spoken to
some of those people before before this massive rally yesterday
(14:17):
or overnight, but just in general, how do you see
they see this whole drama playing out in the long run.
Speaker 3 (14:23):
Well, they're responding to the same information we're all seeing.
So you know, one of my best contacts, he's a
guy who runs a hedge fund in Singapore. You know,
he is basically saying he's been waiting for signs that
this whole tariff push by Trump is around setting deals
(14:43):
and he really never wanted big, big tariffs on anyone.
He just wants to get great deals, and now we're
seeing evidence of that he believes, so that's a real
positive for him. Other folks that I've spoken to are
basically very cautious. They're saying, you know, all this uncertainty,
it's not good for business. We could see recession in
(15:04):
the US. That's quite a big risk. Not that it's
definitely going to happen, but one clouding factor here is
that some consumers in the US have actually gone out
and made big purchases of washing machines or iPhones prior
to tariff's coming into play, because they don't want to
be hit with those extra costs. And that's actually broad
(15:26):
a load of activity, it's front load of that activity,
and so when these tariffs start to take effect and
flow through the economic data, it might be three or
six months before you actually start to see that impact,
and so there's a lot of uncertainty between now and then,
so people are really just wanting to take their time,
make sure they understand what's going on before they make
any big moves.
Speaker 2 (15:47):
Rich. As you know, we don't like cliches very much
at Bloomberg, but I'm going to say it. The only
certainty is uncertainty. That's it.
Speaker 3 (15:55):
Yeah, it's correct.
Speaker 2 (15:57):
Okay. Thank you for joining us, Rich, and thank you
for listening to the Bloomberg Australia podcast. I'm Chris Burke.
This episode was recorded on the traditional lands of the
Wurundrii people. It was produced by Paul Allen and edited
by Rebecca Jones and Ainsley Chandler. Don't forget to follow
and review the show wherever you get your podcasts, and
sign up to Bloomberg's free daily newsletter, Australia Briefing. Go
(16:20):
to Bloomberg dot com to subscribe.
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