1 00:00:03,680 --> 00:00:06,320 Michael Thompson: Welcome to a special edition of Fear and Greed coverage 2 00:00:06,360 --> 00:00:10,320 Michael Thompson: of this morning stunning tariff backflip by US President Donald Trump, 3 00:00:10,400 --> 00:00:12,639 Michael Thompson: and look at what it means for Australia, for markets 4 00:00:12,640 --> 00:00:14,800 Michael Thompson: and what lies ahead. I'm Michael Thompson, and good morning, 5 00:00:14,840 --> 00:00:15,560 Michael Thompson: Sean Aylmer. 6 00:00:15,840 --> 00:00:17,800 Sean Aylmer: Good morning, Michael, crazy morning. 7 00:00:18,079 --> 00:00:19,960 Michael Thompson: We were not expecting this, were we, Sean? 8 00:00:20,400 --> 00:00:24,279 Sean Aylmer: We weren't. Donald Trump has pretty much backflipped on tariff 9 00:00:24,440 --> 00:00:29,720 Sean Aylmer: unless your Chinese. This morning, he decided that he would implement 10 00:00:29,800 --> 00:00:34,560 Sean Aylmer: a ninety day pause on all tariffs excluding China. Now, 11 00:00:34,600 --> 00:00:36,840 Sean Aylmer: having said that there will be a ten percent across 12 00:00:36,840 --> 00:00:39,159 Sean Aylmer: the board tariff still in place. So for Australia that 13 00:00:39,200 --> 00:00:41,879 Sean Aylmer: ten percent doesn't change, so in effect it doesn't make 14 00:00:41,960 --> 00:00:46,600 Sean Aylmer: much difference for us. China, well, Trump has upped the 15 00:00:46,680 --> 00:00:49,560 Sean Aylmer: tariff on China to one hundred and twenty five percent. 16 00:00:49,920 --> 00:00:54,240 Sean Aylmer: He said that Beijing putting on a retaliatory tariff yesterday 17 00:00:54,520 --> 00:00:56,640 Sean Aylmer: showed a lack of respect, and so one hundred and 18 00:00:56,680 --> 00:00:59,680 Sean Aylmer: twenty five percent tariff on China, everyone else gets a 19 00:00:59,720 --> 00:01:03,200 Sean Aylmer: ten percent tariff. An absolutely stunning backflip. 20 00:01:03,720 --> 00:01:06,080 Michael Thompson: What does it mean for markets? I know that that 21 00:01:06,440 --> 00:01:09,153 Michael Thompson: Wall Street responded very, very positively. 22 00:01:11,200 --> 00:01:13,800 Sean Aylmer: Very positively, very quickly. The broad based S&P500 finished up nine and 23 00:01:13,840 --> 00:01:18,160 Sean Aylmer: a half percent. The tech heavy NASDAQ 100, it finished up twelve 24 00:01:18,160 --> 00:01:22,240 Sean Aylmer: percent. Clearly markets love it. Futures in Australia suggests that our 25 00:01:22,280 --> 00:01:26,240 Sean Aylmer: mark will open up six or seven percent. What it 26 00:01:26,319 --> 00:01:28,160 Sean Aylmer: does at the end of the day, what it does, 27 00:01:28,280 --> 00:01:31,040 Sean Aylmer: it just gives a bit of breathing room. Donald Trump 28 00:01:31,040 --> 00:01:34,360 Sean Aylmer: hasn't said that he will drop tariffs totally, and there's 29 00:01:34,360 --> 00:01:38,679 Sean Aylmer: still that ten percent tariff, but countries will now negotiate 30 00:01:38,840 --> 00:01:42,480 Sean Aylmer: with the US around this, and so the world trade 31 00:01:42,640 --> 00:01:46,920 Sean Aylmer: order just looks a bit more normal this morning than 32 00:01:46,920 --> 00:01:49,560 Sean Aylmer: it has over the last week or so. 33 00:01:49,560 --> 00:01:51,880 Michael Thompson: So is it cause for a lot of optimism then 34 00:01:51,960 --> 00:01:54,520 Michael Thompson: for a whole lot of countries because previously there was, 35 00:01:55,200 --> 00:01:58,840 Michael Thompson: it was, it was a very firm declaration and yes 36 00:01:58,880 --> 00:02:00,600 Michael Thompson: they were coming in, yes, this was what was going 37 00:02:00,640 --> 00:02:04,160 Michael Thompson: to happen. Does this show a bit of weakness, I 38 00:02:04,200 --> 00:02:07,560 Michael Thompson: suppose in Donald Trump's stance and just suddenly means that, hey, 39 00:02:07,560 --> 00:02:08,480 Michael Thompson: there is room to move. 40 00:02:09,160 --> 00:02:11,360 Sean Aylmer: I think the word he used was yippy. That people 41 00:02:11,400 --> 00:02:14,040 Sean Aylmer: were getting a bit yippy. So he decided to implement 42 00:02:14,120 --> 00:02:17,720 Sean Aylmer: a ninety day pause. I mean for countries like Cambodia, Vietnam 43 00:02:18,120 --> 00:02:21,960 Sean Aylmer: hit with you know, high forty percent tariffs, great news 44 00:02:22,040 --> 00:02:26,600 Sean Aylmer: for them. For markets, it doesn't actually remove the uncertainty 45 00:02:26,639 --> 00:02:28,680 Sean Aylmer: factor and we always talk about it on Fear and Greed. 46 00:02:29,080 --> 00:02:33,800 Sean Aylmer: Markets hate uncertainty more than anything else. I still think 47 00:02:33,840 --> 00:02:35,840 Sean Aylmer: it's going to be a bumpy ride. Obviously there'll be 48 00:02:35,840 --> 00:02:38,200 Sean Aylmer: a bounce today on the ASX 200, and there's been 49 00:02:38,240 --> 00:02:41,600 Sean Aylmer: a huge bounce on Wall Street. But it's not like 50 00:02:41,760 --> 00:02:46,519 Sean Aylmer: we know exactly what's going to be implemented in three 51 00:02:46,560 --> 00:02:49,080 Sean Aylmer: months time. But something that's really interesting is that it 52 00:02:49,120 --> 00:02:51,520 Sean Aylmer: looks like and you say, it looks like, you never can 53 00:02:51,560 --> 00:02:54,320 Sean Aylmer: be sure with Donald Trump, Canada and Mexico, those twenty five 54 00:02:54,320 --> 00:02:57,400 Sean Aylmer: percent tariffs go down to ten percent immediately. It also 55 00:02:57,480 --> 00:03:02,360 Sean Aylmer: looks like the auto tariffs, the steel tariffs will remain 56 00:03:03,160 --> 00:03:06,360 Sean Aylmer: as they are, so they won't be reduced to ten percent. 57 00:03:07,040 --> 00:03:09,360 Sean Aylmer: The point of all this, Michael, there is still plenty 58 00:03:09,360 --> 00:03:11,840 Sean Aylmer: of uncertainty so I think we're in for a rocky ride. 59 00:03:12,400 --> 00:03:15,320 Michael Thompson: One last question, Sean, what do you think was the 60 00:03:15,440 --> 00:03:18,639 Michael Thompson: main factor causing this? I know that you mentioned that 61 00:03:18,680 --> 00:03:22,200 Michael Thompson: Trump said that people getting yippy. Was it the massive 62 00:03:22,240 --> 00:03:25,160 Michael Thompson: whack to markets over recent days, the surge in US 63 00:03:25,240 --> 00:03:27,079 Michael Thompson: government bond yields? What do you reckon it was? 64 00:03:27,600 --> 00:03:30,000 Sean Aylmer: Yeah, I mean it has to be global markets. Donald 65 00:03:30,000 --> 00:03:34,320 Sean Aylmer: Trump himself kind of portrayed it as being, you know, 66 00:03:34,360 --> 00:03:36,440 Sean Aylmer: people getting a bit scared and thought he'd better help out, 67 00:03:36,840 --> 00:03:38,560 Sean Aylmer: like he was sort of giving a gift, is the 68 00:03:38,600 --> 00:03:40,960 Sean Aylmer: way he portrayed it. But there is no doubt when 69 00:03:41,120 --> 00:03:45,480 Sean Aylmer: you have a twenty percent fall in the NASDAQ or more, and trillions 70 00:03:45,680 --> 00:03:47,920 Sean Aylmer: and more than a trillion dollars wiped off the market, 71 00:03:48,440 --> 00:03:51,000 Sean Aylmer: that's going to move you. It's going to move Republican lawmakers, 72 00:03:51,080 --> 00:03:53,400 Sean Aylmer: it's going to move a lot of people on Wall 73 00:03:53,440 --> 00:03:55,960 Sean Aylmer: Street who are influential with Donald Trump. So there's no 74 00:03:56,080 --> 00:03:58,040 Sean Aylmer: doubt the markets is what made him move. 75 00:03:59,040 --> 00:04:03,040 Michael Thompson: Certainly a surprise, wasn't it, Sean? Considering we recorded the 76 00:04:03,080 --> 00:04:06,880 Michael Thompson: show this morning, the podcast this morning, published it, and 77 00:04:08,520 --> 00:04:09,400 Michael Thompson: then came the news. 78 00:04:10,040 --> 00:04:11,840 Sean Aylmer: Yeah, and then came the news. You would never know 79 00:04:11,920 --> 00:04:12,520 Sean Aylmer: with Donald Trump. 80 00:04:12,640 --> 00:04:15,440 Michael Thompson: You certainly never know with Donald Trump. Thank you very much, Sean. 81 00:04:15,600 --> 00:04:16,200 Sean Aylmer: Thanks Michael. 82 00:04:16,440 --> 00:04:19,000 Michael Thompson: We'll have more later on the response from markets in 83 00:04:19,120 --> 00:04:21,520 Michael Thompson: the afternoon report and again tomorrow with the full edition 84 00:04:21,680 --> 00:04:24,200 Michael Thompson: of Fear and Greed. I'm Michael Thompson and this was 85 00:04:24,240 --> 00:04:26,040 Michael Thompson: a special edition of Fear and Greed.