What’s in store for US shoppers?

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NAB Morning Call 12 min 2 speakers 8 chapters transcribed 19 days ago
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Is the decline in Chinese shipments set to raise US prices and empty shelves?

Phil Dobbie 0:01
Well, the evidence is mounting that there's much less arriving in the United States and China. No big surprise there, perhaps, but in a few weeks, will that translate to much higher prices and empty shelves? Paul Krugman has likened it to COVID, except this time he says there's no vaccine. Is that why markets have turned south again today? Or is it apprehension ahead of some big earnings results later in the week? Most of the big tech firms are reporting, and how do they? See their future. It's Tuesday, it's the 29th of April. Trump's 100th day today. It's the morning call from NAB. Good morning. Well, the US dollar is back on the slide today. It's down half a percent on the DXY, just under ninety nine now.
Phil Dobbie 0:43
The Aussie is up naught point six percent at sixty four point three US cents. The euro is up half percent. The pound has climbed over over naught point nine percent today, and the yen up almost one point one percent. And until the last hour of trade, I'd be saying that the US had finished its short winning streak in shares, but prices turned around in the last hour and finished in the green for the Dow and the S P, just in the green for the S P, but up 0.3% for the Dow. The Nasdaq uh that was down 0.7% or more, finished off just 0.1% in the red.

How did US equity markets close after the late‑day reversal?

Phil Dobbie 1:16
The Russell 2000 is up 0.4% at the close and shares up in Europe as well. 0.3% for the Eurostocks fifty, not point one percent for the DAX, half percent for the CAC Carrant, three quarters of a percent in Spain, which is curious when the country has been in the dark uh for most of the session, thanks to a massive power out outage that hit Spain and Portugal uh right across those countries, as yet undiagnosed as to why it happened, but apparently it's not a cyber attack, uh, but uh still not fixed. Small bond movements in the US, uh down three basis points for ten year treasuries. Up five for ten year German Bundes up five or six in fact for most of continental Europe, uh up three basis points for ten year Gilts in the UK.
Phil Dobbie 2:00
Aussie ten years. We're down seven basis points yesterday to four point one six percent. Now on futures, just one basis point higher than that this morning, and quite a fall in oil as well. One point seven percent off WTI and Brent. Brent well below sixty six a barrel now. And gold has risen uh one point Point nine percent higher for comics today. And Nabs Tappa Strickland joins me. It feels like maybe there's a bit of a reality check going on, which is why uh markets are a little bit more subdued, although you know, as I said, they've turned around a bit. But look, we've got no trade talk supposedly happening between the US and China. Well, China says not anyway, and China also seems to think that they can hit their five percent GDP growth target this year.
Phil Dobbie 2:42
year uh even with the tariffs. So, you know, it raises the question, which would explain why uh there's a bit of uncertainty in the US, who is going to feel the hurt the most from all of this?
Tapas Strickland 2:53
Good morning Phil.

Are the United States and China currently engaged in trade negotiations or a deadlock?

Tapas Strickland 2:54
Yes, it depends on which side you speak to in terms of whether there has been any negotiations to date. But at least the US suggests there has and the Chinese authorities suggest there that they haven't. But the the the key thing is our markets over the past week had come to uh a view, or at least uh edging towards a view, that negotiations on um trade agreements uh w were occurring and that uh prospects of Some trade deals uh being in train over the next couple of weeks uh and some progress in terms of China, but uh at least uh overnight it suggests a little bit of pushback on in terms of that narrative there. And in particular, uh Scott Bessant, who's a US Treasury Secretary, uh was asked a question about progress on China and he said, as I've repeatedly said, I believe it's up to China to de-escalate.
Tapas Strickland 3:39
Um so uh it all lies really on China in terms of uh what were they're doing there, but at least that doesn't seem like conciliatory language in the case. No, and also No, and also
Phil Dobbie 3:47
and you'd be thinking China would I mean, you know, if you were China you'd be thinking, well, okay I mean 'cause d Scott Besson made the point that you know, they sell five times more to the United States than the United States sells to them.

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