Trade war crisis; Albo, Ley talk on hate bill; carriers complain about airfares

Trade war crisis; Albo, Ley talk on hate bill; carriers complain about airfares

News in brief

The Prime Minister Anthony Albanese and Opposition Leader Sussan Ley will work together to find a compromise on hate speech legislation, after both agreed that the families of the Bondi victims were looking to parliament for leadership.

 

Even the airlines think airfares are too high, but they're blaming the airports. The industry group representing Qantas, Virgin Australia and Air New Zealand, called A4ANZ, says the government needs to strengthen regulations over airports to stop airfares from rising.

 

Trading in A2 Milk’s shares was halted yesterday after its price fell more than ten per cent on news that China’s birth rate dropped to a record low. China’s birth rate is about half that of Australia, and one-third of India.

 

Australia has 48 billionaires who hold more wealth than the bottom 40 per cent of the population combined, according to a new report by Oxfam Australia.

 

Perhaps the toughest hard luck story of the Australian Open tennis tournament so far comes from American tennis player Michael Zheng. After a surprise first round victory, Zheng, who has one semester at university left, could be forced to forfeit his minimum $225,000 in prize money due to US college rules not allowing him more than $10,000 in prize money.

Fear-o-meter

Betashares chief economist David Bassanese on Donald Trump, one year on.

 

One year into his term, US President Donald Trump has started the year in fine form, with action in Venezuela, threats on Iran and Greenland and a criminal probe into the Federal Reserve.

 

Trump has also once again threatened tariffs on any country trading with Iran or any European country that says they are against America’s desire to buy Greenland.

 

Sadly, Trump still seems intent on throwing around tariff threats on the slightest whim. Markets are watching and waiting to see if the US Supreme Court allows him to keep wielding his tariff weapon with abandon. More broadly, markets appear to be learning to live with his various threats – taking each with a grain of salt and potentially just seeing them as ambit claims at the state of negotiations.

 

Either way, I suspect Trump’s threats toward Europe with respect to Greenland could ultimately backfire. For starters, it seems highly unlikely any self-respecting European country would give up on Greenland in the face of tariff threats alone. What’s more, further tariffs on major trading partners would only add to the risks facing the US economy – especially if Europe finally responds with trade retaliation of its own.

 

Source: Betashares

Fear & Greed Q+A today

January 20 marks one year since Donald Trump's inauguration. Dr Charles Miller talks about the President's accomplishments and failures over the last 12 months:

 

“Trying to charge or investigate Jerome Powell, the chairman of the Federal Reserve, is a catastrophically bad decision. The independence of the Federal Reserve is a cornerstone of both the American financial system and the global financial system. If you start interfering with that independence, things are going to go very badly wrong — not just in economics and business, but across a whole range of downstream consequences. Combined with what we’ve seen around ICE and the erosion of legal and constitutional norms, this represents a direct attack on the institutional infrastructure that American democracy depends on. The worst effects of that kind of damage often don’t show up immediately, but they can be extremely long-lasting.”

Investors are looking for safe haven assets, pushing the price of gold and silver to record highs, as markets get spooked by Donald Trump’s demand for European nations to sell him Greenland. Underlying the threat is the potential outbreak of a trade war, after Trump announced ten per cent tariffs on several European countries from February 1, unless Greenland is sold. While the local sharemarket fell yesterday, as investors looked for US dollar denominated assets, the local gold stocks surged. Tech stocks have been hit by the chaos with the local sector sharply lower yesterday. US tech stocks are well below their highs of late last year. Since then, market leader Nvidia and Apple are down 10 per cent and Microsoft is off 15 per cent. The exception is Alphabet, owner of Google, which is trading near record levels.

Greed-o-meter

Rank	Fund	Annual return (10 yrs) %
1	Hostplus Balanced	8.7
2	Australian Retirement Trust Balanced	8.5
3	AustralianSuper Balanced	8.2
4	UniSuper Balanced	8.1
5	Vision Super Balanced Growth	8.1
6	legalSuper MySuper Balanced	8.1
7	HESTA Balanced Growth	8.0
8	Cbus Growth (MySuper)	8.0
9	Aware Super Balanced	8.0
10	Equip Balanced Growth	7.9

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Source: Chant West