The Point

Crispin Murray: What’s driving the ASX this week?

What’s driving Aussie equities this week

This week, Donald Trump began to make good on promises of aggressive pro-US policy, announcing plans for tariffs on Canadian, Mexican and Chinese imports.

How concerned should investors be about the inflationary effect of US tariffs?

Trump’s new US commerce secretary Howard Lutnick acknowledges that tariffs would raise prices, at least temporarily.

The inflationary effects of tariffs (and a sweeping immigration crackdown) were a “concern” for businesses, added Richmond Fed president Tom Barkin.

But Pendal’s Julia Forrest notes that tariffs generally apply to “lower-frequency consumer durables”.

Consumers tend to be less aware of price rises in those product categories compared to the hyper-awareness of supermarket or petrol price rises, Julia says.

“As such, tariffs may end up raising inflation with less impact on the politically important perception of inflation.”

Still, markets continue to pare back expectations of US rate cuts partly because of continuing strength in the US economy.

Julia explains in Pendal’s latest Aussie equities note

Crispin Murray: What’s driving the ASX this week?

What’s driving ASX stocks this week?

Here are the main factors driving the ASX this week, according to Pendal portfolio manager PETE DAVIDSON. Reported by investment specialist Chris Adams.

Crispin Murray: What’s driving the market this week?

With barely three weeks to go, Donald Trump has gained momentum in average betting odds, moving to a 56% chance of a win versus 43% for Kamala Harris.

It’s his biggest lead since Harris entered the race. How are investors reacting?

“Market volatility has picked up, but the forward curve has this falling back post-election,” note Pendal’s head of equities Crispin Murray.

“To date, this has not impacted equities and is supported by credit spreads staying low.

“The most likely election outcome is a Democrat or Republican presidential win without sweeping both the House and Congress – and hence being constrained in what they can achieve.

“The main difference in market impact relates to bonds, with Trump’s threat of higher tariffs and less immigration potentially leading to higher inflation in late 2025, and therefore to higher yields.

“This may have limited impact on equities as it could be seen to come with higher growth.”

Crispin explains more in his latest weekly note

Elise McKay: What’s driving equities this week?

Here are the main factors driving the ASX this week, according to Aussie equities analyst and portfolio manager ELISE MCKAY and reported by investment specialist JONATHAN CHOONG.

Read Pendal’s latest weekly equities overview.