The Overnight Report: Tariff Relief

This story features AERIS RESOURCES LIMITED, and other companies. For more info SHARE ANALYSIS: AIS

Good morning.

US markets were closed overnight for Martin Luther King Jr. Day, but Donald J Trump has been inaugurated as the country’s 47th President and the absence of import tariffs has lifted US equity futures and weakened the US dollar.

The Aussie dollar has made a jump towards the upper 0.62 range.

10y yields were lower across most developed markets, including Australia. US bond markets were closed.

The pending removal of restrictions weakened oil prices. Iron ore too failed to join in on the weaker USD excitement.

European stock markets rallied, with the Euro Stoxx rising 0.3% and the FTSE 100 lifting 0.2%.

Copper led the base metals higher amid easing trade tensions. Data on Friday showed industrial production and manufacturing activity in China had been buoyed by recent stimulus measures.

Update from economists at National Australia Bank:

We expect the Fed to remain on hold through the first half of the year before ultimately moving rates another -50-100bp lower this cycle.

Our central case now sees -50bp of cuts this year, and -50bp next year (previously -100 and -25 respectively).

Economic growth remains robust, downside labour market risks have receded, and inflation is still above target. With the Fed having already recalibrated to less restrictive settings, they are set to hold policy rates unchanged for several meetings.

While we expect GDP growth to slow this year, this reflects a likely easing in both supply and demand, which means the labour market should hold up.

SPI futures are indicating the mood remains positive for Aussie equities.

On the calendar today:

-New Zealand Dec retail card spending

-New Zealand Services Index

-Eurozone ZEW expectations

-UK Nov labour force

-Aeris Resources ((AIS)) Quarterly update

-BHP Group ((BHP)) 4Q 2024 Production

-Hub24 ((HUB)) Qtrly report

-Liontown Resources ((LTR)) 2Q 2025 Production

-Northern Star ((NST)) 4Q 2024 Production

-Sheffield Resources ((SFX)) Qtrly production

-Whitehaven Coal ((WHC)) Dec Qtr Results

-Yancoal Australia ((YAL)) Qtrly report

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Corporate news in Australia:

-According to Bloomberg, HSBC is studying options for its consumer banking business in Australia, including a possible divestment

-Star Entertainment ((SGR)) reported 15% revenue drop, ongoing funding struggles and a “material uncertainty” warning, as weak trading and regulatory pressures take their toll

-Iress ((IRE)) sells superannuation business to Apex for $40m, plus potential milestone payments

-Optus is considering selling sports streaming to Nine Entertainment ((NEC)), potentially shifting EPL rights to Stan

-IGO Ltd ((IGO)) has flagged major impairment for Kwinana lithium refinery

-MA Financial ((MAF)) secures $171m for its first ASX-listed investment trust, launching in March

By deVere Group CEO Nigel Green

President Donald Trump’s declaration of a national energy emergency can be expected to spark seismic shifts in global markets and create a wave of opportunities for investors.

The new administration’s focus will be on ramping up domestic energy production, particularly in Alaska, and rolling back regulations like the “electric vehicle mandate.

The announcement, on Day 1 of Trump’s return to power, underscores his administration’s commitment to energy independence as he said in his speech “Drill baby, drill.”

By unlocking Alaska’s untapped resources and unleashing new opportunities for oil and gas production, the initiative aims to stabilize and reduce energy pricesa cornerstone of economic growth.

Energy costs influence every facet of the economy, from consumer prices at the pump to the production costs of goods that rely on fossil fuels.

The energy sector will undoubtedly be the most immediate beneficiary of this sweeping policy shift.

Companies involved in oil and gas exploration, extraction, and infrastructure stand to gain as regulatory barriers are dismantled and investment in domestic production soars. Shares of US energy giants and mid-cap firms are likely poised for significant upward momentum as the markets price in increased output and profitability.

Global oil prices, already sensitive to geopolitical developments, could see sharp adjustments.

While increased US production may initially suppress prices, the broader implicationsincluding shifts in OPEC strategies and trade balancescould lead to heightened volatility. This creates both opportunities and risks, particularly in commodities and energy-linked equities.

Beyond the energy sector, there will likely be positive effects on industries that rely on lower energy costs. Transportation, manufacturing, and agriculture are set to benefit from reduced operational expenses, potentially lifting their stock valuations.

Investors should also watch for renewed interest in infrastructure projects tied to energy distribution, from pipelines to export terminals.

The urgency for investors to position themselves cannot be overstated. Trump’s policies represent a decisive shift from the status quo, and markets are likely to respond rapidly.

Energy stocks are expected to see increased activity as US-based oil and gas companies, particularly those with significant interests in Alaska and other resource-rich regions, expand their operations.

Commodities such as crude oil may experience pricing shifts as domestic production impacts global supply dynamics. Infrastructure investments, including projects related to pipelines and export facilities, are also set to surge in demand.

Lower energy costs will likely catalyze growth across industries such as transportation, chemicals, and heavy manufacturing, creating additional opportunities for investors.

Trump’s bold move signals a return to prioritizing energy security and economic competitiveness. The rollback of regulations like the electric vehicle mandate highlights a shift in prioritiesaway from incentives for emerging technologies and toward bolstering traditional energy sectors.

This recalibration will resonate across markets, creating new dynamics and recalibrating investment strategies.

In addition, the focus on Alaska’s untapped potential underscores the administration’s intent to maximize domestic resources. With technological advancements making extraction more efficient and cost-effective, the region could emerge as a cornerstone of US energy dominance.

The declaration of a national energy emergency marks a turning point for markets and a rallying cry for investors.

With significant policy shifts on the horizon, the potential for growth is extraordinarybut so is the need for strategic action. Investors must act decisively, leveraging these developments to position themselves for what promises to be a transformative era”.

As Trump’s administration sets the tone for a new era in energy policy, the potential for wealth creation is as vast as Alaska’s untapped resources.

The Australian share market over the past thirty days

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

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