Markets rally on hopes of more deals
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Why are US and Chinese market dynamics mentioned at the start of the episode?
Yesterday, US and China. Today, a big arms deal with Saudi Arabia. Maybe even a peace deal with Ukraine this week. Or is that taking things too far? The fly in the ointment might be the EU, which are hard to deal with, apparently. Well, who's in charge, basically? And the April data that might have been bad, like US inflation, the NAB Business Survey, none of it was really that bad at all. So, onwards and upwards, it's Wednesday. It's the 14th of May, 2025. It's the Morning Call from NAB. Good morning. Well, with the exception of the Dow, stocks are rising again in the United States at 1.6% at the close for the Nasdaq, up 0.7% for the S&P, which is now higher than it was at the start of the year. But today, down 0.7% for the Dow.
Tech and consumer discretionary are the big winners. And where it goes from here, well, it's going to go a lot higher, according to the US president. He gave another proclamation on the direction of the share market today. In Europe, the euro stocks 50 is up 0.4%, the DAX up 0.3%, but the FTSE 100 marginally at the red at their close. The Hang Seng yesterday fell 1.9%, but the Nikkei in Japan is up 1.4%. And in bond yields, well, basically, the US, Germany, the UK, France, 10-year yields up three basis points in each case. That keeps it nice and simple, doesn't it? The US dollar has fallen back down, losing 0.8% on the DXY, just a little below 100.1 now. The Aussie, though, is up 1.6%, almost up to 65 US cents.
The pound is up 1%. The euro is up 0.9%. And the rise in oil continues today, up 2.8% for WTI today. And 2.5% for Brent. Brent is at 66.60 a barrel right now. So another day of big moves. But before we look at all of that, are you ready to ask Andrew? Andrew Irvine, the NAB CEO, is going to be taking your questions, anything you want to ask him within reason.
How did the $142 billion Saudi‑US defence deal affect market sentiment?
He'll be on the morning call, not this weekend, but the weekend after that. So if you've got a question you'd like to ask him, either a written question or maybe you'd like to send us a sound file of you asking the question that we can play out on the podcast, however you want to do it. You need to do it, we think, by the end of this week. It might be a bit of leeway in that, but try for the end of this week. You can ask about anything, the economy, finance, globally or locally, or you can ask about the bank. It's up to you. Email morningcall at nab.com.au. That's our new email address. Ask away. Morning call. All one word at nab.com.au. Now, we look forward to that. Meanwhile, here's NAB's Skymasters this morning to talk through exactly what is going on.
And it's tech stocks particularly, isn't it, this morning. They are loving things right now. So, Nvidia, for example, is up 6% today. So, it looks as though investors have been caught a bit short by the US-China deal yesterday. You know, were they underweight on stocks and now they're trying to rush back in? Is that what's happening on the share market, do you think?
Yeah, good morning. Good morning, Phil. You are definitely correct. I mean, tech stocks are loving the announcements over the last couple of sessions. But, you know, equities in general, sort of their price action suggests they're loving the announcements that we've received. that we've seen. Just in terms of the positioning, you are correct. There was a Bank of America survey on market positioning, which was done just prior to the trade talks in Geneva. It did show that fund managers were in at 38% underweight US stocks. So this was the most in two years. So yes, you are correct.
What is driving the surge in tech stocks like Nvidia and AMD today?
investors were underweight. And I guess, you know, we're now seeing them chase this latest rally. And I guess there's, you know, the possibility that that continues a little bit further from now. And on that, another thing I would note is that There's also been a shift in earnings. So there's sort of, we've had this positive earnings season and what we're seeing now is according to a Citigroup gauge is that earning upgrades, the number of earning upgrades versus downgrades has now turned positive again. And that's the first time in six months as well.
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Chapters
8 chapters
1
Why are US and Chinese market dynamics mentioned at the start of the episode?
0:01–1:58
2
How did the $142 billion Saudi‑US defence deal affect market sentiment?
1:58–3:45
3
What is driving the surge in tech stocks like Nvidia and AMD today?
3:45–6:16
4
How are recent US inflation and CPI numbers influencing Fed expectations?
6:16–8:45
5
Why are investors shifting from underweight to buying US equities now?
8:45–10:54
6
What do the NFIB small‑business survey and Australian confidence data reveal?
10:54–12:42
7
How might upcoming Australian wages and labour‑force data affect the RBA?
12:42–15:13
8
What are the analysts’ forecasts for Fed rate cuts and RBA moves this year?
15:13–17:15