ASX follows Wall Street falls, US government bonds continue sell-off — as it happened

The Australian share market has finished the day down 0.5% at 8,349 points with a lot of losers and not too many winners.

Overall, the market had 125 stocks in the red, 15 unchanged and 60 stocks gaining.

When looking at the sectors, Academic and Educational services finished at the top; up 2.1%, followed by Basic Materials; up 0.5%.

The healthcare sector finished down -0.4%, while consumer non-cyclicals finished down -0.2% and utilities down -0.02%.

The energy sector finished worst of all, down -1.3%.

Among companies, the top mover was Lynas Rare Earths, up +7%, followed by Genesis Minerals, up +5.8%.

It wasn’t a good day for Zip Co, finishing down -6.5%.

Nufarm was also down at -6.4% and Paladin Energy down -5%.

The Australian dollar is pretty flat, up 0.03% at 64.37 US cents.

That’s it from The Business Team today – see you tomorrow morning!

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• ASX 200: -0.5% to 8,349 points (live values below)
• Australian dollar: +0.1% at 64.41 US cents
• S&P 500: -1.6% to 5,844 points
• Nasdaq: flat at 21,080 points
• FTSE: +0.1% to 8,786 points
• EuroStoxx 600: -0.04% to 554 points
• Spot gold: +0.5% to $US3,331/ounce
• Brent crude: -0.4% to $US64.65/barrel
• Iron ore: -0.3% to $US99.95/tonne
• Bitcoin: +2.4% to $US110,848

Prices current around 16:45 AEST

Live updates from major ASX indices:

Chief Executive Officer Jakob Stausholm will step down later in 2025.

More to come..

Lee Sang Hoon, global emerging market equities portfolio manager for Eastspring Investments says there are two main reasons he is convinced that Donald Trump will be forced to make permanent his backdown from the “pretty extreme” tariff levels announced on so-called Liberation Day (April 2).

“Higher tariffs means weakening of their purchasing power for American consumers, and consumption is almost 70% of US GDP. So it’s the key engine of the US economy,” he observes.

“So higher taxes will definitely hurt consumption in the US and probably can cause economic recession there.

“And we have mid-term election coming up in November next year, so this is pretty unpalatable kind of situation for political leaders.

“The second thing is the ultimate goal or objective of doing all this stuff is US wants to rebuild its manufacturing capability, whether through reshoring or having foreign direct investments in the United States.

“But if you look at the reality, I think it’s very, very difficult to achieve that goal, even within the next 5 to 10 years.”

He says the US lacks domestic capacity in supply chains and infrastructure to do this quickly, and its labour costs are also too high to be globally competitive.

Even if it concentrates mainly on China, Mr Lee says the US will have trouble decoupling its economy and finding alternative suppliers for many goods.

“China is close to $US5 trillion in terms of manufacturing value add,” he observes.

“But other alternative countries, like India, India’s only $450 billion, that’s less than one-tenth of that of China.

“Mexico is one-twentieth that of China and Vietnam is a one-fiftieth that of China.

“So you cannot replace China with other countries quite fast.

“So I think that China would remain as a major production base for US and other developed countries for many years to come.”

That’s good news for Australia, given its current economic reliance on exports to China.

Wesfarmers held an analyst briefing in Sydney today.

Weeks ago, The Business took the opportunity to lock-in a face-to-face interview with the conglomerate’s CEO Rob Scott.

However, this morning, after Wesfarmers was informed that the interview would also include questions about Bunnings in light of the recent ABC Four Corners investigation into its market dominance, the company’s media handlers pulled the plug on the interview.

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Wesfarmers is an Australian conglomerate that owns multiple major retail brands including Bunnings, Officeworks, Target and Kmart, as well as other industrial interests.

Last Monday, Four Corners revealed Bunnings stocks around 9,000 home brand products, potentially undermining its famous lower price guarantee, given the specific products are not available from competitors.

The program also exposed how the hardware retailer’s market dominance affects suppliers and competitors.

After Mr Scott pulled out of the interview, the Assistant Minister for Productivity, Competition, Charities and Treasury Andrew Leigh agreed to come onto the program, speaking with Alicia Barry about the government’s planned competition reforms, especially in the retail sector.

You can watch that interview at 8:44pm AEST on ABC News Channel or anytime on iView.

And you can read more about Bunnings’ market dominance in the articles written by my ABC colleagues Emilia Terzon, Angus Grigg and Ben Schneiders.

I managed to get out of the office for an hour to have a chat with Eastspring Investments portfolio manager Lee Sang Hoon.

The Singapore-based stock picker focuses on emerging markets and, perhaps unsurprisingly, thinks now is a good time to pivot towards them and away from the advanced economies.

“100% of time when the US had a recession, it was followed by bull market in emerging markets,” he said, presenting a Powerpoint graph going back a few decades as evidence.

“Why is that? The transmission mechanism is in US recessions the dollar weakens, then the capital flows back into EMs, that boosts domestic consumption, investment etc…

“So, if history is something to go by, we probably can be in early stage of kind of EM market rally.

“And, year to date, EM market already has done pretty well, especially relative to the US market.”

An ABC investigation has revealed farming giant Duxton Farms is the successful applicant for a farming development in WA’s Ord Valley.

Duxton Farms is now involved in a joint venture with landowner MG Corporation, but Paul Burke sits on both boards as a director.

MG says Mr Burke excluded himself from the tender process when the conflict of interest became apparent, but a legal expert questions how the venture can progress while he remains on both boards.

You can read the full report from Alys Marshall below:

• ASX 200: -0.6% to 8,339 points (live values below)
• Australian dollar: +0.2% at 64.47 US cents
• S&P 500: -1.6% to 5,844 points
• Nasdaq: flat at 21,080 points
• FTSE: +0.1% to 8,786 points
• EuroStoxx 600: -0.04% to 554 points
• Spot gold: +0.7% to $US3,337/ounce
• Brent crude: +0.1% to $US64.94/barrel
• Iron ore: -0.1% to $US100.10/tonne
• Bitcoin: +2.8% to $US11,305

Prices current around 15:15 AEST

Live updates from major ASX indices:

We’ve told you a fair bit about the decline in US bond prices and consequent rise in bond yields (or interest rates) as confidence in US Treasuries wanes on global markets.

So where is all this money seeking “safe havens” going instead?

Some of it has gone into crypto, with Bitcoin hitting a record high of $US111,862.98 today.

However, there’s also been a large amount of cash flowing into the more traditional “store of value”, gold.

The precious metals is close to its record highs, reached earlier this year, and is trading for $US3,338 an ounce this afternoon.

CBA commodities analyst Vivek Dhar says a variety of “risk-off” events sent investors looking for safe places to park their money that aren’t US Treasuries or the Greenback.

“Gold futures rose back above $US3,300/oz yesterday on safe haven demand tied to concerns around the US economy and worries of rising tensions in the Middle East,” he writes.

“Concerns around the US economy have increased after Moody’s cut its US credit rating last week. Those concerns were compounded overnight after a weak auction of 20-year US bonds. Both the US dollar and US Treasuries sold off as a result. A CNN report that Israel may be planning a strike on Iran’s nuclear facilities also boosted safe haven demand.”

Dhar says gold appears to be replacing the US dollar and Treasuries as the preferred safe haven asset.

“We continue to believe that safe haven demand flows will favour gold more than it has in the past,” he argues.

“Typically, both the US dollar and US Treasuries have benefitted the most when global growth worries have intensified. Looking at the collapses in equity markets in the Global Financial Crisis (GFC) and the COVID 19 pandemic, the US dollar and US Treasuries outperformed gold. This has not been the case this year, as gold has outperformed the US dollar and US Treasuries following the increase in US tariffs.

“The lift in gold futures yesterday alongside the sell off in the US dollar and US Treasuries is consistent with gold’s emerging status as the preferred safe haven asset.

“We believe some of the shift in preference to gold for safe haven demand is permanent due to aggressive US tariff policy. We’ll likely know how the structural this shift has been if gold maintains its preference even if the Trump Administration walks back its tariff policy.

“It’s worth noting that our International Economics team believe the US dollar could strengthen by 3.5 to 4 per cent in coming weeks as President Trump backs down on aggressive US tariffs.”

However, Dhar thinks gold’s value could continue rising, as the US dollar keeps falling.

“Safe haven demand and our weakening US dollar outlook in H2 2025 should see gold gradually increase to $US3,750/oz by Q4 2025. It’s worth noting that gold futures nearly reached $US3,486/oz in intra day trading on 22 April 2025.

“We see the US dollar gradually falling through H2 2025 (1 per cent) and 2026 (4 per cent).”

The national secretary has stepped down from his national leadership role amid a controversial restructure of the union.

Mr Smith told union delegates this morning that he would stay on as the Victorian Branch Secretary.

More to come..

Brisbane lord mayor Adrian Schrinner has announced a review into low-to-medium density residential zoning in Brisbane to address skyrocketing housing costs.

It will focus on expanding density by reviewing car parking requirements, building heights, and lot sizes for developments in LMR areas and identifying areas where more LMR housing could be built.

Paul Bidwell from Master Builders Queensland said it was a “good first step” but governments needed to keep incentivising people to go into the construction industry.

Read the full report from Ned Hammond here:

The ABC is continuing to hear from HESTA members struggling with the seven-week planned outage. Some are confused as to why the outage is continuing for seven weeks while others tell us they didn’t know about it until they went to draw down on their funds and couldn’t access their accounts.

According to HESTA’s website, regular income stream payments have now restarted and its new contact centre is open.

Online account access is still unavailable until Sunday, June 1.

Chinese ambassador Lyu Jin said international seabed resources were the common property of all mankind, with the International Seabed Authority (under the United Nations), the authoritative organisation for managing the international seabed and all its resources.

This announcement came after the United States announced its plans to begin commercial deep-sea mining in US waters and the high seas.

The ambassador said the US announcement seriously violated the United Nations Convention on the Law of the Sea, undermined the consensus of the international community and harmed the interest of all countries.

The ambassador went on to say that China and Nauru should work together to expand cooperation, jointly resist hegemonic acts and safeguard their legitimate rights and interests and international justice.

Adeang said Nauru had invested a lot of resources into deep-sea mining, making it a key development direction of its industry over many years. He also condemned the United States, stating the actions of some countries will seriously impact the international seabed resource management framework and even cause disasters.

“Nauru is willing to strengthen cooperation with China to promote the Seabed Authority and relevant countries to speed up actions and maintain the order of deep-sea mining.”

In case you are coming to this story fresh, you can catch up on my reporting from earlier this month below:

In its annual budget released in parliament, the NZ government forecast a budget deficit of $NZ14.74 billion, according to Reuters.

It’s narrower than a deficit of $NZ17.32 billion forecast in its half-year fiscal update in December.

“Budget 2025 strikes a careful balance – making the investments our country needs now, while driving long-term reforms to safeguard the economic recovery and growth New Zealand depends on,” New Zealand Finance Minister Nicola Willis said in a statement accompanying the 2025 budget, maintaining a broadly tight fiscal strategy despite rising external headwinds to growth.

The budget has focused on fiscal prudence. Operating spending for 2025 is $1.3 billion on average per annum – the lowest in a decade.

According to Reuters the Republican-controlled U.S. House of Representatives Rules Committee on Wednesday voted to advance President Donald Trump’s sweeping tax-cut and spending bill, setting the stage for a vote on the House floor in the coming hours.

Oxford Economies has released its 2025 Global Cities Index, with New York taking out first place, followed by London and Paris.

The index provides “a comprehensive evaluation of the structural advantages, opportunities, and challenges facing the world’s largest cities” — essentially a look at the most liveable cities from around the world.

Cities are scored across five categories: Economics, Human Capital, Quality of Life, Environment, and Governance.

The 2025 top ten cities are:

1. New York

2. London

3. Paris

4. San Jose (California)

5. Seattle

6. Melbourne 

7. Sydney

8. Boston

9. Tokyo

10. San Francisco

Eight of the top 10 cities are the same as last year, with Sydney and Boston joining fresh this year.

Anthony Bernard-Sasges – senior economist, City Services at Oxford Economics, and lead author of the report said:

 “Leveraging our best-in-class urban economic forecasts, and supplemented by other publicly available datasets, we have created a globally consistent dataset of characteristics for the 1,000 largest cities in the world. As a result, the Global Cities Index provides a holistic, data-driven approach to city rankings, by scoring them not just on their economic performance, but also considering several other important dimensions that influence their standing in the world.”

He also added:

“Sydney takes the seventh spot due to an improvement in its Quality of Life and Environment scores, while Boston saw an increase in its Economics score.”

Click here to download the complete Global Cities Index 2025.

Global miner Rio Tinto is taking the lead in Chile’s first major project involving lithium in years, according to Reuters.

The battery metal is used in electric vehicles and comes at a time when lithium prices have fallen nearly 90% since late 2022 due to an oversupply of the product and weak demand for EV cars.

Despite the uncertainty around lithium, Rio has targeted the chemical element, also buying projects in Argentina and Australia, reducing its dependence on iron ore.

Construction is likely to start in 3-5 years after permit updates and will centre around Maricunga – one of the world’s most lithium-rich salt flats.

The US 30-year Treasury yield — that is effectively the interest rate on very long term US government debt — has risen to the highest level since October 2023.

That may not sound so alarming but, at 5.108%, the 30-year yield is within a whisker of being at its highest levels since 2007, when markets were about to peak and start their steep descent into the global financial crisis of 2008/09.

This tells you one or more of a few things:

• Traders aren’t sure inflation has been tamed, especially with US tariffs and tax cuts threatening to push it up;
• Traders aren’t convinced the US has a serious plan to rein-in its soaring budget deficits and debt, meaning they want a higher interest rate to compensate;
• Most worryingly, investors aren’t sure the US remains the financial safe haven it has been ever since World War II, and are moving their money elsewhere.

About a week ago, my colleague David Taylor wrote a good piece explaining why this rise in US yields is so worrying (see below).

Among others, he spoke to Barrenjoey’s chief rate strategist Andrew Lilley.

“So the problem wasn’t increasing bond yields per say. The problem was that is an indication that everybody is very pessimistic about the economy — so pessimistic that bonds are no longer even a safe haven,” he said in that piece.

Or, at least US bonds (and Japanese bonds).

Government debt in Europe has been relatively in demand, keeping long-term yields pretty steady.

Watch this space!

A political showdown is underway in Washington where things are heating up over Donald Trump’s proposals for more tax cuts in the United States. Congressional Republicans who’d normally back Mr Trump are nervous about how to pay for the additional tax breaks as concerns increase the proposal could add trillions to America’s already massive debt pile.

ABC’s senior business correspondent Peter Ryan spoke to NewsRadio. You can listen below.

Large insurer IAG is getting bigger by taking over RACQ insurance — and it wants the WA branch as well.

IAG sells insurance in Australia and New Zealand under a lot of brands, including IAG, NRMA Insurance, Swann Insurance, ROLLiN’, Cylo, and Lumley Special Vehicles.

It also underwrites for third-party brands, including Bendigo and Adelaide Bank, People’s Choice Bank, ANZ, and Coles. So if you buy insurance through them, it’s essentially with IAG.

ACCC says yes

Today’s news is that the competition watchdog the ACCC “will not oppose” Insurance Australia Group Limited’s proposed acquisition of RACQ Insurance Limited.

ACCC chair Gina Cass-Gottlieb said there were still other competitive options:

“The ACCC’s review considered the impact of the proposed acquisition on the supply of home and contents insurance and the supply of motor insurance, focussing on the level of competition provided by other existing insurance providers, how competitive RACQI is now, and the likely impact of the acquisition on insurance prices, service offering, and coverage.

“The ACCC found that alternative suppliers of home and contents insurance and motor insurance would continue to compete with and provide a competitive constraint on IAG after the acquisition.

“Several alternative suppliers of home and contents insurance and motor insurance, including the market leader Suncorp, more established insurers Allianz and QBE, and newer entrants such as Youi, Auto & General, and Hollard will continue to compete in Queensland.”

But this doesn’t mean it’ll wave through more acquisitions, necessarily. 

“The ACCC is currently reviewing Allianz Australia Insurance Limited’s proposed acquisition of RAA Insurance Holdings Limited and is aware of IAG’s proposed acquisition of RAC Insurance from RAC WA.

“This decision in relation to IAG and RACQ should not be treated as being indicative of the ACCC’s decision or further consideration of these transactions. The competitive dynamics and issues in each transaction are unique and the ACCC is considering (or will consider) each transaction individually.”

So watch this space.