The global economic landscape has become increasingly turbulent, with the US presidential inauguration on January 20 marking the beginning of a new era of economic uncertainty. As investors seek safe havens, the Australian sharemarket has emerged as a popular destination for those looking to diversify their portfolios. One of the primary reasons for the shift in investor sentiment is the US President Donald Trump’s global tariff war, which has unleashed a wave of market volatility. The S&P/ASX 200 has outperformed the major Wall Street indexes since Trump unveiled his tariffs, with the local bourse rising 0.43 per cent between April 2 and April 24. While the US market has been experiencing significant downturns, the Australian index has seen a more modest decline, with the Dow Jones falling 5 per cent, the S&P 500 down 3.3 per cent, and the Nasdaq trading 2.5 per cent lower. The Australian government’s relatively insulated economy, combined with its strong banking sector, has made it an attractive destination for investors seeking safe havens. Fund managers have noted that the local economy has held up stronger than anticipated, despite being slapped with a baseline 10 per cent tariff. Key Statistics:
- The S&P/ASX 200 has risen 0.43 per cent between April 2 and April 24.
- The Dow Jones has fallen 5 per cent during the same period.
- The S&P 500 is down 3.3 per cent, while the Nasdaq is trading 2.5 per cent lower.
| Company | Change in Price |
|---|---|
| Northern Star Resources | 15 per cent |
| Evolution Mining | 12 per cent |
| Newmont Corporation | 11 per cent |
The Australian government’s relatively insulated economy, combined with its strong banking sector, has made it an attractive destination for investors seeking safe havens. Fund managers have noted that the local economy has held up stronger than anticipated, despite being slapped with a baseline 10 per cent tariff.
“The [investor] money is all coming out of the United States,”
says Jun Bei Liu, co-founder and portfolio manager at Ten Cap. “The US market has historically been the biggest allocation for any portfolio. We are seeing most of them coming out of the US going into equities into Australia and Asia.”
The IMF has slashed the projection for US growth from 2.7 to 1.8 per cent, or about $650 billion in dollar terms. In contrast, Australia is expected to remain one of the fastest-growing major economies in the developed world this year and next. Gold Prices on the Rise:
The price of gold has soared almost 18 per cent since so-called Liberation Day, and more than 40 per cent over the past year. The surge in gold prices is attributed to the ongoing economic uncertainty, with investors seeking safe havens. “The degree of uncertainty in the economic and political spaces are sufficiently high, and that underpins gold,” says Nick Frappell, global head of institutional markets at ABC Refinery. The biggest beneficiary of the trade war is gold, with gold miners such as Northern Star Resources, Evolution Mining, and Newmont Corporation experiencing significant gains.
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