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. A stunning tariff backflip by US President Donald Trump,

3
00:00:10,400 --> 00:00:12,639
Michael Thompson: and a 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 as pretty much backflipped on tariff

9
00:00:24,440 --> 00:00:28,960
Sean Aylmer: unless your Chinese. This morning, he decided that he would

10
00:00:29,280 --> 00:00:33,839
Sean Aylmer: implement a ninety day pause on all tariffs excluding China

11
00:00:34,320 --> 00:00:36,520
Sean Aylmer: now having said that there will be a ten percent

12
00:00:36,520 --> 00:00:39,040
Sean Aylmer: across the board tariff still in place. So for Australia

13
00:00:39,040 --> 00:00:41,760
Sean Aylmer: that ten percent doesn't change, so in effect it doesn't

14
00:00:41,760 --> 00:00:46,320
Sean Aylmer: make much difference for us. China, well, Trump has upped

15
00:00:46,520 --> 00:00:49,560
Sean Aylmer: the 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&P 500 finished up nine and

23
00:01:13,840 --> 00:01:16,795
Sean Aylmer: a half percent. The tech heavy NASDAQ 100 is finished

24
00:01:16,795 --> 00:01:21,960
Sean Aylmer: up twelve percent. Clearly markets love it. Futures in Australia suggests

25
00:01:21,959 --> 00:01:25,080
Sean Aylmer: that our mark will open up six or seven percent.

26
00:01:25,880 --> 00:01:27,720
Sean Aylmer: What it does at the end of the day, what

27
00:01:27,760 --> 00:01:30,160
Sean Aylmer: it does, it just gives a bit of breathing room.

28
00:01:30,440 --> 00:01:34,039
Sean Aylmer: Donald Trump hasn't said that he will drop tariff totally,

29
00:01:34,080 --> 00:01:37,640
Sean Aylmer: and there's still that ten percent tariff, but countries will

30
00:01:37,640 --> 00:01:41,399
Sean Aylmer: now negotiate with the US around this, and so the

31
00:01:41,480 --> 00:01:45,520
Sean Aylmer: world trade order just looks a bit more normal this

32
00:01:45,720 --> 00:01:49,560
Sean Aylmer: morning than 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 --> 00:02:17,040
Sean Aylmer: a ninety day pause. I mean for countries like Cambodia

43
00:02:17,080 --> 00:02:20,720
Sean Aylmer: and Vietnam hit with you know, high forty percent tariffs,

44
00:02:21,240 --> 00:02:25,840
Sean Aylmer: great news for them. For markets, it doesn't actually remove

45
00:02:25,880 --> 00:02:28,040
Sean Aylmer: the uncertainty fact and we always talk about it on

46
00:02:28,080 --> 00:02:31,600
Sean Aylmer: Fear and Greed, markets hate uncertainty more than anything else.

47
00:02:33,360 --> 00:02:35,080
Sean Aylmer: I still think it's going to be a bumpy ride.

48
00:02:35,120 --> 00:02:37,840
Sean Aylmer: Obviously there'll be a bounce today on the ASX 200,

49
00:02:37,840 --> 00:02:40,359
Sean Aylmer: and there's been a huge bounce on Wall Street. But

50
00:02:40,840 --> 00:02:44,840
Sean Aylmer: it's not like we know exactly what's going to be

51
00:02:44,880 --> 00:02:48,280
Sean Aylmer: implemented in three months time. But something that's really interesting

52
00:02:48,440 --> 00:02:50,799
Sean Aylmer: is that it looks like and you say, it looks

53
00:02:50,840 --> 00:02:53,600
Sean Aylmer: like you never can be sure with Donald Trump. Canada and Mexico,

54
00:02:53,720 --> 00:02:57,080
Sean Aylmer: those twenty five percent tariffs will go down to ten percent immediately. It

55
00:02:57,120 --> 00:03:01,800
Sean Aylmer: also looks like the auto tariffs, the steel tariffs will

56
00:03:01,960 --> 00:03:05,640
Sean Aylmer: remain as they are, so they won't be reduced to

57
00:03:05,760 --> 00:03:08,799
Sean Aylmer: ten percent. The point of all this, Michael, there is

58
00:03:08,840 --> 00:03:10,880
Sean Aylmer: still plenty of uncertain so I still think we're in

59
00:03:10,960 --> 00:03:11,840
Sean Aylmer: for a rocky ride.

60
00:03:12,400 --> 00:03:15,320
Michael Thompson: One last question, Sean, what do you think was the

61
00:03:15,440 --> 00:03:18,639
Michael Thompson: main factor causing this? I know that you mentioned that

62
00:03:18,680 --> 00:03:22,200
Michael Thompson: Trump said that people getting yippy. Was it the massive

63
00:03:22,240 --> 00:03:24,880
Michael Thompson: whack to markets over recent days, that the surge in

64
00:03:25,000 --> 00:03:27,079
Michael Thompson: US government bond yields? What do you reckon it was?

65
00:03:27,600 --> 00:03:30,000
Sean Aylmer: Yeah, I mean it has to be global markets. Donald

66
00:03:30,000 --> 00:03:34,320
Sean Aylmer: Trump himself kind of portrayed it as being, you know,

67
00:03:34,360 --> 00:03:36,440
Sean Aylmer: people getting a bit scared and thought he'd better help out,

68
00:03:36,840 --> 00:03:38,560
Sean Aylmer: like he was sort of giving a gift, is the

69
00:03:38,600 --> 00:03:40,960
Sean Aylmer: way he portrayed it. But there is no doubt when

70
00:03:41,120 --> 00:03:44,040
Sean Aylmer: you have a twenty percent fall in the NASDAQ or more, and

71
00:03:44,920 --> 00:03:47,920
Sean Aylmer: trillions and more than ten trillion dollars wiped off the market,

72
00:03:48,440 --> 00:03:51,000
Sean Aylmer: that's going to move you. It's going to move Republican lawmakers,

73
00:03:51,080 --> 00:03:53,400
Sean Aylmer: it's going to move a lot of people on Wall

74
00:03:53,440 --> 00:03:55,960
Sean Aylmer: Street who are influential with Donald Trump. So there's no

75
00:03:56,080 --> 00:03:58,040
Sean Aylmer: doubt the markets is what made him move.

76
00:03:59,040 --> 00:04:03,040
Michael Thompson: Certainly a surprise, wasn't it, Sean, considering we recorded the

77
00:04:03,080 --> 00:04:06,880
Michael Thompson: show this morning, the podcast this morning, published it, and

78
00:04:08,520 --> 00:04:09,400
Michael Thompson: then came the news.

79
00:04:10,040 --> 00:04:11,840
Sean Aylmer: Yeah, and then came the news. You would never know

80
00:04:11,920 --> 00:04:12,520
Sean Aylmer: with Donald Trump.

81
00:04:12,640 --> 00:04:15,440
Michael Thompson: You certainly never know with Donald Trump. Thank you very much, Sean.

82
00:04:15,600 --> 00:04:16,200
Sean Aylmer: Thanks Michael.

83
00:04:16,440 --> 00:04:19,000
Michael Thompson: We'll have more later on the response from markets in

84
00:04:19,120 --> 00:04:21,520
Michael Thompson: the afternoon report and again tomorrow with the full edition

85
00:04:21,680 --> 00:04:24,200
Michael Thompson: of Fear and Greed. I'm Michael Thompson and this was

86
00:04:24,240 --> 00:04:26,040
Michael Thompson: a special edition of Fear and Greed.