ASX surges but fears remain; Myer downgrades on sales drop; “bleisure” Is back
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Welcome to Fear and Greed, business news you can use. Today, the local share market surges after a lull in fighting in the Middle East, but uncertainty remains the dominant driver of markets. Maya warns that the cost of living crisis has hit sales, and pleasure travel, business and leisure, is back, with Gen Zers taking full advantage. Plus, Fortescue Metals boss Andrew Forrest's strong warnings on iron ore prices and AI, and the latest hot stock... A chipmaker in China surges 500% on day one. It is Tuesday, the 28th of July, 2026. I'm Michael Thompson and good morning, Sean Aylmer. Get your breath back, Michael. Good morning. You know, it's a big intro and I need to pause halfway through for a breath.
Why did the ASX surge 1.4% after a lull in Middle East fighting?
The main story this morning, Sean, the local share market surged 1.4% yesterday. It's one of the strongest days in six weeks on the back of a lull in fighting in the Middle East and slight relief in the oil price. But few investors are sure about the trajectory from here because you've got the inflation data tomorrow is absolutely critical, as is what happens in Iran. By the close yesterday, the market was at just under 8,900 points, the highest level since mid-June. It is a little over 3% off its all-time high, which was hit in February this year. And yesterday's moves reflected a surge really in tech stocks, as well as general strength across most sectors. with the exception of energy.
Yes. So, oil prices had hit US$100 a barrel late last week after US President Donald Trump warned that the US was considering a massive attack bigger than ever before on Iran. Then over the weekend, the US stopped firing, possibly because it's running down munitions or short on munitions compared to where they like to be, or possibly because the Trump administration is worried about oil prices and domestic politics. As a result, our local share market jumped. Now, what it does show is that the taco trade continues to dominate sentiment. The taco trade, Trump always chickens out, it's held true so far. Investors believe that the US president wants a negotiated settlement, not all-out war. Therefore, traders are investing on that, and that's what happened to our market yesterday.
However, however, however, Michael, what the president wants and what he gets is is becoming much more confusing, much more problematic. That makes it very difficult for investors to know what's next. So a day like yesterday, up 1.4%, all sounds great. No one is betting that it's going to surge something like that today. It could go the opposite way.
Yeah. Yeah. Global markets. Sean is certainly in a quandary, really, about where the war in the Middle East is heading. And those investors that are hoping to benefit from the White House's policies are also starting to lose out as well, because... Exchange-traded funds developed to take advantage of the Trump trade, essentially White House policies to boost home building, defense spending, U.S. manufacturing, those kinds of things. They're actually underperforming. That's right.
So fund managers created these ETFs saying, hey, if you think Donald Trump, if you want to bet on Donald Trump, We're going to create ETFs for that. Now, one of the best ETFs, I've got to tell you, it's called the Truth Social God Bless America ETF. Of course it is. It's down 4% this year, while the S&P 500 is up 8%. It invests in those types of things. Inflation is the big concern as a war in Iran has intensified again over the past fortnight, notwithstanding the last couple of days. Bond yields have risen. on expectations that rates will rise. That puts pressure on the global markets. Even if the ASX closed higher yesterday, certainly Wall Street is feeling it, and particularly those tech companies.
The moral of this story, uncertainty is at a peak. I wish I could say that we knew what was going to happen, but because what's happening out of the US and what Donald Trump is saying and doing, not necessarily the same thing, it's making it very difficult for investors.
Yeah, it certainly is. So that's really, that's the international backdrop to what's going on at home.
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