Mag 7 hit $32 trillion; Trump says end of war is near; sleep’s health benefits

Mag 7 hit $32 trillion; Trump says end of war is near; sleep’s health benefits

News in brief

Over the weekend, US President Donald Trump said a memorandum of understanding on a peace deal with Iran has been largely negotiated, and the details would be unveiled soon.

 

Liberal senator Andrew Bragg has suggested the Coalition will support Labor’s legislation to change the National Disability Insurance Scheme spending.

 

About one-third of cars sold this year will be electric or a plug-in hybrid vehicle and that is likely to rise to 50 per cent within ten years, according to the International Energy Agency in a major new report.

 

Guzman y Gomez has exited the US, surprising most investors, announcing it will shut its Chicago restaurants immediately after the business failed to meet financial performance hurdles.

 

Sleep plays a crucial role in clearing toxic waste such as proteins linked to Alzheimer’s disease from the brain, and smartwatch data could help warn of problems, according to a new scientific review.

Fear-o-meter

AMP Chief Economist Dr Shane Oliver on asset prices

 

Global and Australian share markets have likely seen the worst from the War and oil shock if the flow of oil quickly resumes. But the risk of further falls taking us to a 15 per cent top to bottom correction remains high given uncertainty around the flow of ships through the Strait along with still stretched valuations, political uncertainty associated with Trump & the midterm elections and worries about private credit and the impact of AI.

 

However, returns should still be positive for the year as a whole thanks to Trump still likely to pivot to consumer-friendly policies and solid profit growth.

 

Bonds are likely to provide returns around running yield.

 

Unlisted commercial property returns are likely to be solid helped by strong demand for industrial property associated with data centres.

 

Australian home price growth this year is likely to slow to around 3 per cent and could go negative over the year ahead due to poor affordability, RBA rate hikes, reduced investor demand likely to result from the Budget moves to wind back negative gearing and the capital gains tax discount and the hit to confidence from the War.

Fear & Greed Q+A today

On the week ahead for the economy, plus a look back at last week's bigger than expected jump in unemployment, and what it means for interest rates.

 

"Normally we know there’s a lag of six to 12 months with interest rates. It depends a little bit what else is happening in the economy, but let’s say it’s the shorter end of that — six months.

 

So the February rate hike hasn’t had its full effect yet. The March hike certainly hasn’t. And the one that we saw three weeks ago, we haven’t really got any data on yet basically.

 

There’s a pipeline of monetary policy tightening still permeating its way through the economy, still working through when we get our mortgage repayment schedule or the small business sector gets its overdraft rate bumped up. It takes a few months for people to realise and acknowledge and adjust their behaviour to that.

 

So look, I wouldn’t hike again on the current figuring. And it does suggest to me that the unemployment rate, unfortunately, could get very close to 5% by the end of the year."

The Magnificent 7 tech stocks on Wall Street have all reported quarterly earnings, and momentum in the AI world is accelerating with chipmaker Nvidia leading the way. Its sales are surging on demand for AI infrastructure, helping cement its status as the world’s largest company, worth $US5.2 trillion.

 

By comparison, the other six – Alphabet, Apple, Microsoft, Amazon, Meta and Tesla - are expanding at a much steadier pace though all will invest billions of dollars into their AI ventures in coming years.

 

Underlying this spending, which is broadly supported by investors, is the belief that tech’s long-term promise over-rides all else, including the war in the Middle East, the potential for inflation and competition from China.

Greed-o-meter

	Company	Market Cap USD
1	NVIDIA	5.2T
2	Alphabet (Google)	4.6T
3	Apple	4.5T
4	Microsoft	3.1T
5	Amazon	2.9T
6	Broadcom	2.0T
7	Tesla	1.6T
8	Meta (Facebook)	1.5T
9	Berkshire Hathaway	1.0T
10	Walmart	958.7B

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The Magnificent 7 now comprise almost one-third of the S&P500, and have a combined market valuation of $US23 trillion, or $32 trillion Aussie dollars. Here's the current market cap of the 10 biggest companies on Wall St:

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Source: CompaniesMarketCap.com