Source : THE AGE NEWS
By STAN CHOE
The Australian sharemarket is set to extend a four-day upward streak following gains in the US where companies reported stronger-than-expected profits.
Futures early on Wednesday were pointing to a lift in the market of 31 points, or 0.38 per cent, at the open after the local bourse pushed past the 8000-mark on Tuesday. The Australian dollar was stable fetching around US63.86¢.
Investors fear Trump’s tariffs could bring a recession if left unaltered because they could freeze global trade.Credit: Bloomberg
US shares rose again Tuesday as stronger-than-expected profits piled higher for companies, though chief executives say they’re unsure how long that can last because of uncertainty around president Donald Trump’s trade war.
The S&P 500 was up 0.6 per cent extending its winning streak to a sixth day. The Dow Jones Industrial Average was up 0.8 per cent and the Nasdaq composite was 0.6 per cent higher.
Honeywell International helped lead the market with a gain of 4.9 per cent after reporting stronger profit and revenue for the latest quarter than analysts expected. Perhaps even more importantly for investors, it also raised its forecast for profit over the full year.
“Though we have not yet seen it in our results, we recognise we face an uncertain global demand environment for the remainder of 2025, and our company will work tirelessly, leveraging all tools available to us, to deliver for customers and shareholders,” chief executive Vimal Kapur said.
Sherwin-Williams rose 5.6 per cent for another one of the market’s bigger gains after the paint and coatings company also reported a better-than-expected profit.
Chief executive Heidi Petz said it expects to see softness from some of its customers continue to persist well into the second half of this year, but she also said that her company gets the majority of its raw materials from the regions where it manufactures. That could help blunt the possible blow from tariffs.
Other stocks weren’t as strong, even though their companies also reported stronger-than-expected profits.
Much like the broader market, UPS stock swung between losses and gains at the day’s start of trading after it reported a stronger profit than analysts expected for the first three months of 2025. Because it’s the world’s largest package delivery company, UPS can offer a window into how the global economy is doing.
But UPS also said it wasn’t updating its financial forecasts previously given for 2025 because of “the current macro-economic uncertainty.” It also said it expects to cut about 20,000 jobs and close 73 buildings this year as part of a cost-cutting effort that chief executive Carol Tomé said “could not be timelier.” Its share price was down 0.5 per cent.
Investors fear Trump’s tariffs could bring a recession if left unaltered because they could freeze global trade and send prices higher for all kinds of products. Trump’s on-again-off-again rollout could also by itself throw into disarray the long-term plans for spending and investment by businesses and households.
US households are getting much more pessimistic because of tariffs, and a report from the Conference Board on Tuesday said their expectations for income, business and job market conditions dropped to the lowest level since 2011 and are well below the level that usually signals a recession ahead.
US Treasury Secretary Scott Bessent said such economic uncertainty is a tool Trump can use as he negotiates tariffs and trade deals. “President Trump creates what I would call strategic uncertainty in the negotiations,” he told reporters at the White House.
The latest zigzag may be arriving for the US car industry after White House Press Secretary Karoline Leavitt said Trump will sign an executive order on Tuesday relaxing some of his 25 per cent vehicle tariffs.
General Motors nevertheless slipped 0.8 per cent despite reporting a stronger profit for the latest quarter than analysts expected. The company rescheduled a conference call with investors to discuss its results and forecasts for 2025 to Thursday because of “recent reports regarding updates to trade policy”.
In the bond market, Treasury yields fell. The yield on the 10-year Treasury dropped to 4.17 per cent from 4.23 per cent late on Monday.
Not only did the report on consumer confidence come in weaker than expected, so did an update on how many job openings US employers were advertising at the end of March. Such weaker-than-expected data could eventually push the Federal Reserve to resume cutting interest rates to give the economy a boost.
