Less confidence, less missiles

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NAB Morning Call 17 min 2 speakers 8 chapters transcribed 19 days ago
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Why did US markets lose momentum on Wednesday?

Phil Dobbie 0:02
US markets lost their mojo a little in this session. Perhaps it was the fall in consumer confidence that did it, although that can hardly have been a surprise to many. There's not a big response to a supposed deal over the Black Sea. Ukraine and Russia won't fire at each other, they say, so they can carry out trade. But Russia has conditions attached and it's not exactly a ceasefire, is it? Plus the budget yesterday with that surprise tax cut and inflation for Australia and the UK today. It's Wednesday. It's the twenty sixth of march twenty twenty five. It's the morning call from Nav. Good morning. Well, a bit of a slow turnaround today. The US dollar is down 0.1%. That's all to around 104.2% on the DXY.
Phil Dobbie 0:40
Shares have stalled. Well, maybe not the NASDAQ. It actually finished half a percent up, but the Dow and the S P were both in the red for most of the session, but finishing in the green. In fact, the third day in a row in the green for the S P, which finished up naught point two percent. But the Dow, well, it is in the green, but naught point naught one percent. We could say that is flat on the Couldn't we? The Russell two thousand is well down though, not point nine percent lower this morning. Uh compared to that, Europe uh the Eurostocks fifty closed up one point one percent. So did the DAX, the FTSE one hundred up naught point three percent, and currencies a half percent rise in the yen reversing yesterday's fall.
Phil Dobbie 1:14
The Aussie and the pound are both up naught point two per cent, the euro marginally down, the Aussie just over sixty three US cents now, and ten year treasury yields down three basis points. But German ten year Bund yields are up three basis points and up five for ten year GILT yields in the UK. And Aussie ten years were four point four two percent yesterday, now five basis points on that. And oil was down almost half a percent lower for WTI, but it's back in the green now.

How did the Conference Board’s consumer‑confidence drop affect market sentiment?

Phil Dobbie 1:39
Brent has also switched stacks and it's up naught point two percent, now at seventy three ten a barrel, and gold has climbed naught point three percent, silver is up two point. point three percent, copper up two and a half percent. So why this sudden lack of enthusiasm? Here's Nab's Gavin friend in London. Enthusiasm in the United States I'm talking about. Well how much of it is down to the consumer confidence numbers that were expected to be down, uh but they've been down more than expected. But you know, they were never going to be great though, were they, Gavin?
Gavin Friend 2:09
No, that's right. Good morning, Phil. I mean, uh consumer confidence and this is the the conference boards indicator. You know, it dropped for the fourth consecutive time. Um, a bit like the German EFO that came out earlier on. It was the forward looking expectations index that did all the moves, although they moved the German EFO and the uh the the conference boards uh indexes moved in different directions. And so that forward looking expectations component for the US dropped uh to sixty five point two. So that's even below the lows uh that we saw in the pandemic again back.
Phil Dobbie 2:42
Low stuff. Yeah,
Gavin Friend 2:42
twelve
Phil Dobbie 2:43
years.
Gavin Friend 2:44
Yes, indeed. And the conference board says that, you know, at sixty five point eight that's below the sort of eighty threshold that it tends to associate with recessions. Yeah, but they've said that for a while
Phil Dobbie 2:53
now. It's been down five times since twenty twenty two and we haven't had those recessions, so
Gavin Friend 2:58
No, i i it of cour of course. But it but it, you know, again it comes back to that whole argument about about soft data and hard data. We we know that with this is gelling now with the Michigan numbers, which also see higher inflation and we we you know, we've we've talked a lot on this podcast in the past about, you know, hard versus soft data and what have you. Um I think um, you know, th th the other things that are going on today There's more news about um you know the Russia uh Ukraine issue.

What does Germany’s IFO business‑expectations rise mean for European equities?

Gavin Friend 3:28
There's more news about uh tariffs, which is quite confusing. Um and I think you know markets are a little bit battle worn. It's always I mean they came in to to to to Tuesday um looking reasonably optimistic after those comments late Monday from President Trump about whilst tariffs could be substantial, there were going to be some potential

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