Tariffs. The most beautiful word.
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What did Donald Trump say in his Bloomberg interview and why does it matter for the markets?
Donald Trump came out fighting in a Bloomberg interview this morning. Was it enough to keep him ahead in the polls, or will his tariff talk scare people in the mo middle? Oil falls, is that down to expectations that Israel won't bomb oil plants in Iran? And shares out of fashion, perhaps because of a survey in the US shows investors think they are heavily overweight right now. Plus, China's shares down again. Why is that? All that and what's coming up today as well. Well it's Wednesday, it's the sixteenth of october twenty twenty four. It's the morning call from Nab. Good morning. Well, some big moves over the last twenty four hours with sharp falls in oil. WTI is down four point eight percent. Brent is down four and a half percent, down to seventy-four barrel now, a small fall in the US dollar, but the Aussie is down a third of one percent, almost down to sixty-seven US cents now.
Shares have taken a knock, particularly in Europe. The Eurostocks fifty fell one point nine percent, the cat current down more than one percent, the FTSE is down half a percent. In the US the Nasdaq down 0.9%. The SP is down 0.6%. Same for the Dow as well. That's uh the price about 90 minutes before the market close. And bond yields are falling. 10-year Treasury is down five basis points, down seven basis points in Canada, even more in Europe. In fact, 10-year guilds in the UK now down eight basis points. The same for France and Italy, down five basis points in Germany. Aussie 10-year yields were down two basis points. Basis points yesterday to four and a quarter percent. Now on futures a few basis points lower than that again.
So why these sudden swings? Well, here's Nab's Rodrigo Catrill in Sydney. I mean, there's been a few things around, hasn't there?
Why did oil prices drop and how is the Israel‑Iran situation influencing energy markets?
There's been a uh a Bank of America survey that showed investors think equity uh allocations are overweight. Oil might be down because perhaps Israel won't target the uh infrastructure. infrastructure, oil infrastructure in Iran. And there's concerns about uh caps on AI exports from uh NVIDIA and AMD. That's just some of it. I mean there's a lot more. There's a very telling Trump interview that we can talk about today. But where should we start? Should we start on let's start on shares. Let's start on that Bank of America survey. Because that was out yesterday and it reckons that equity allocations are over thirty percent overweight, whereas bonds are fifteen percent under underweight is and we've seen obviously big moves in in equities and bonds.
Is that a response to that?
Um money
fill. It it's
Certainly is I mean the Bank of America surveys very well respected. And then when it tells you that positioning is at an extreme, typically that tends to be a signal of a reversal. So I think the quote was that uh it's it's time to to sell uh equities. So um that certainly played into it, but uh when you look at the performance of um the equity market, not only in the US but also in Europe, is actually a tech driven decrease. So, yeah. the news around um the US considering putting limits on on NVIDIA and others in terms of the ability to sell to certain parties um the chips is being one component. Um but I think that the biggest one was news coming from Europe that um uh basically ASM ASML, which is the other big chip maker in the Dutch one in in Europe, um we saw shares collapse by
By uh close to sixteen percent. Uh that's the biggest decline in twenty six years. Um because effectively they only sold about half of what they said they were gonna sell uh in terms of chips. So that was a big warning, if you like, in terms of the outlook and demand for chips, um and and it dragged the whole market. And and even if you look at the SP five hundred versus the Nasdaq, the Nasdaq is down close to one percent while the SP is uh around half a percent. So definitely a tech driven one. Um with the combo of of what you said earlier in terms of those restrictions or potential restrictions that the US government may introduce is is challenging the outlook for for for
What does the Bank of America survey reveal about equity‑overweight positions and potential market reversals?
And that's that's very much focused on the Middle East, isn't it?
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Chapters
8 chapters
1
What did Donald Trump say in his Bloomberg interview and why does it matter for the markets?
0:00–1:36
2
Why did oil prices drop and how is the Israel‑Iran situation influencing energy markets?
1:36–3:47
3
What does the Bank of America survey reveal about equity‑overweight positions and potential market reversals?
3:47–6:55
4
How are US export restrictions on AI chips affecting tech stocks and global semiconductor demand?
6:55–9:06
5
Why are Chinese equity markets swinging and what is the impact of the proposed debt‑swap?
9:06–11:24
6
What are the latest CPI readings in New Zealand and the UK and how might they shape central‑bank policy?
11:24–13:53
7
How could Trump’s proposed tariffs on cars and EVs affect prices, inflation and U.S. manufacturing?
13:53–16:20
8
What role will the composition of Congress play in determining future tariff, tax and trade policies?
16:20–18:46