The US market took off, in a fashion I’ve not seen in my career, after Trump sent this message on his social media platform:
“Authorised a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!”
Here’s what we saw:
- S&P 500 = +8.82%
- Nasdaq = +11.6%
- Aussie dollar = +3.1c to US$61.44
- Iron ore = -1.1% to US$93.75 per tonne
- ASX SPI indicates a 6% increase
Keeping our eye on Australian pharmaceuticals
Yesterday the ASX 200 closed down 1.8%. The sector hit the most was our pharmaceuticals, which were included in the on-again off-again tariffs. This saw CSL Limited (ASX:CSL), one of our highest quality companies drop 4.96%. Mesoblast Limited (ASX: MSB) was hit 8% and Neuren Pharmaceuticals Ltd (ASX: NEU) fell 6.14%. A bad day for Melbourne-based pharma.
If you have not followed NEU previously it is worth a look. The company is a developer of therapies for neurodevelopment disorders – these include Rhett syndrome and Fragile X. In 2021 the stock traded between $1 and $2. In 2023 Neuren soared to over $24 on the back of strong sales of its drug, Daybue, and positive FDA results. Since then the wind has been taken out of its sails. The share price currently sits at $8.72.
Look for the companies that don’t bounce
What are we watching today?
In short, everything. On a day when the US bounces hard and our futures indicate a 6% rise the tide should lift all boats. iShares S&P 500 (ASX:IVV) and Betashares Nasdaq 100 ETF (ASX: NDQ) holders will have a smile on their face although there’s still a lot to recover.
Of course, we’ll have a keen eye on our materials and energy sectors which have been the hardest hit, but you want to keep an eye out for those who don’t budge. It will be a fantastic indicator of sentiment.
I’ll have half an eye on embattled former market darling, Mineral Resources Limited (ASX:MIN).
After a series of own goals the company is down a casual 79% over the last twelve months. It’s facing a class action, soft commodity prices, an ASIC investigation, the very real potential for a capital raise and the majority of executives are still in their seats. It will be very interesting to see what appetite investors have for it today.
