The Australian share market is bracing for a $115billion plunge on Monday as Donald Trump’s tariffs stir fears of a global recession.
Wall Street often sets the tone for the Australian Securities Exchange, with the benchmark S&P500 in New York plummeting by six per cent during Friday trade.
The futures market in Australia is expecting the key S&P/ASX200 to fall by more than 5.11 per cent or 398 points to 7,387.5 during Monday trade.
Should that prediction materialise, more than $115billion would be wiped from Australian share market investments.
In another bad sign, the Australian dollar has also slipped below 60 US cents for the first time since the start of the Covid pandemic in March 2020.
Moomoo chief commercial officer and market strategist Michael McCarthy said this was a sign global investment sentiment was under threat.
‘The Aussie dollar, if nothing else, is signalling we are in crisis mode already,’ he told Daily Mail Australia.
‘A lot of people have been talking about buying dips – that’s worked very well for people over the last few years but the Aussie dollar is very clearly saying now is not the time.’
The Australian share market is bracing for a $115billion plunge on Monday as Donald Trump ‘s tariffs stir fears of a global recession
The currency’s fortunes are tied to global growth sentiment, with the Australian dollar previously falling under that 60 US cents mark during the start of the pandemic and during the Global Financial Crisis.
Mr McCarthy said the imposition of new American tariffs, including 34 per cent on China and 10 per cent on Australia, had stirred global recession fears and a revival of 1970s style stagflation where inflation and unemployment are both high at the same time.
‘It’s the tariffs – there’s no two ways about it,’ he said.
‘The concern here is stagflation and the tariffs feed both sides of that equation in that tariffs increase prices, lifting inflation, and also gum up the global economy.
‘So, a slowing economy and rising prices is an economic disaster for everyone.’
