Global Pulse

分类： business

  • Trump’s tariffs hit Toyota profit, though its global sales grew

    Trump’s tariffs hit Toyota profit, though its global sales grew

    TOKYO – Japan’s leading automaker Toyota Motor Corporation has posted a sharp 19% decline in full-fiscal-year profit for the 12 months ending March 2025, with former U.S. President Donald Trump’s trade tariffs and unfavorable currency fluctuations identified as the primary drags on its bottom line.

    Released on Friday, the company’s financial results show net profit landed at 3.85 trillion Japanese yen, equivalent to roughly $25 billion, down from 4.8 trillion yen in the prior fiscal year. Toyota, which produces popular nameplates including the Camry sedan, Prius hybrid, and Lexus luxury line, estimated that Trump-era tariff policies alone carved 1.4 trillion yen ($9 billion) off its annual operating income. Unfavorable foreign exchange swings further compressed profit margins for the global manufacturer, which is headquartered in Toyota City, central Japan.

    Despite the profit decline, Toyota outperformed many analyst expectations in key operational metrics. Global vehicle sales rose to nearly 9.6 million units from 9.4 million in the previous year, while total annual revenue climbed 5.5% to 50.7 trillion yen ($323 billion), up from 48 trillion yen a year prior. On a quarterly basis, the brand closed out the fiscal year with strong momentum: January to March profit jumped 23% year-over-year to 817 billion yen ($5.2 billion), from 664 billion yen, while quarterly sales edged up nearly 2% to 12.6 trillion yen ($80 billion).

    Looking ahead to the current fiscal year running through March 2026, Toyota is maintaining a cautious outlook amid escalating geopolitical risk in the Middle East. The company projects it will again sell 9.6 million vehicles globally, while forecasting a relatively modest annual profit of 3 trillion yen ($19 billion). The ongoing conflict between Iran and Israel, which has effectively closed the Strait of Hormuz — a critical global shipping chokepoint for energy and trade — has created significant uncertainty for the manufacturer. Toyota expects persistent supply chain disruptions from the strait closure, and has already recorded a drop in regional vehicle sales across the Middle East.

    As Japan relies on imports for nearly 100% of its oil, much of which comes from Middle Eastern producers, the conflict has driven sharp increases in oil and raw material prices. Additionally, rerouting cargo to avoid the Strait of Hormuz adds substantial fuel and labor costs to Japanese importers, a pass-through expense that hits manufacturing giants like Toyota directly.

    Beyond near-term financial headwinds, Toyota reaffirmed its long-term strategic vision to transition from a traditional automaker to a diversified mobility company. The brand confirmed plans to expand its product portfolio beyond passenger vehicles to include personal watercraft and small aircraft, alongside innovation in adjacent industrial and service sectors. Current development projects include robotic arms designed to restock retail store shelves and autonomous transport devices for medical equipment in hospitals. To support this transformation, Toyota announced it will streamline operations, rationalize its vehicle model lineup, increase local component sourcing to cut supply chain risk, and implement company-wide cost reduction initiatives.

    Following the release of the earnings report, Toyota’s share price declined 2.2% in Tuesday trading in Tokyo.

  • Japan’s Sony reports declining profit but expects a record for this year

    Japan’s Sony reports declining profit but expects a record for this year

    TOKYO — Leading global electronics, entertainment and gaming conglomerate Sony Group Corporation has released its full fiscal year 2024 financial results, reporting a modest 3.4% decline in annual net profit while projecting a strong recovery to all-time record earnings for the ongoing 2025 fiscal year.

    For the 12-month period ending in March 2024, the Tokyo-based firm posted net profit of 1.03 trillion Japanese yen, equivalent to roughly $6.6 billion. That figure marks a pullback from the 1.07 trillion yen net profit the company recorded in the prior fiscal year.

    Two key headwinds dragged down the company’s bottom line over the past year, Sony executives confirmed: the termination of the joint electric vehicle development project with major Japanese automaker Honda Motor Co., and persistent elevated costs for semiconductors, a critical component for the company’s gaming, electronics and imaging product lines. Unlike many large technology and entertainment conglomerates, Sony operates a diversified business portfolio spanning film production, recorded music, video game development, consumer electronics and network services, meaning it faces overlapping cost pressures across multiple segments.

    Despite the annual profit dip, Sony achieved solid top-line growth over the past fiscal year: total annual sales climbed 3.7% year-over-year to hit nearly 12.5 trillion yen, or approximately $80 billion. Strong revenue growth was driven by blockbuster film releases including the newest installment of the *Demon Slayer* animated franchise and the Japanese drama *Kokuho*, paired with steady consumer demand for the company’s video game offerings and subscription-based network services.

    The company’s fourth-quarter results, however, showed a starker decline: net profit fell 63% to 83 billion yen ($529 million) compared to 224 billion yen in the same quarter last year. Quarterly sales still posted an 8% uptick to 3 trillion yen ($19 billion), with the company’s music segment, which represents top global artists including Bad Bunny and SZA, contributing consistent revenue to the quarter’s results.

    Looking ahead to the current 2025 fiscal year, Sony is projecting net profit will jump 13% from the past year to reach 1.16 trillion yen ($7.4 billion) — which would mark the highest annual profit in the company’s 78-year history. The conglomerate is banking on upcoming high-profile theatrical releases, including *Spider-Man: Brand New Day* and *Jumanji: Open World*, to drive ticket and merchandise sales that will lift full-year earnings.

    Alongside its financial projections, Sony announced Friday a major share repurchase program: the company will buy back up to 230 million of its outstanding shares, allocating up to 500 billion yen ($3.2 billion) for the initiative, a move designed to boost shareholder value. Following the announcement, Sony stock, which has traded around 3,000 yen ($19) per share in recent weeks, gained 1% on the Tokyo exchange Friday.

  • Oil tanker arrives in South Korea after passing through the Strait of Hormuz in mid-April

    Oil tanker arrives in South Korea after passing through the Strait of Hormuz in mid-April

    SEOSAN, South Korea — A Malta-flagged crude oil tanker carrying 1 million barrels of Middle Eastern crude has reached offshore waters near South Korea’s west coast port of Seosan, industry officials confirmed Friday, marking a critical delivery for the Asian trade-reliant nation as it navigates escalating energy security risks tied to tensions around the Strait of Hormuz.

    The vessel, named Odessa, completed its transit through the strategically vital Strait of Hormuz in mid-April, a window that aligned with temporary ceasefire negotiations between Iran and the United States, according to HD Hyundai Oilbank, the South Korean refinery that procured the cargo. The tanker is on track to dock at the firm’s offshore mooring facility later the same day to begin unloading its shipment, which will then be processed into end products including gasoline, diesel, and naphtha at the refinery’s complex. HD Hyundai Oilbank notes it holds a total daily crude processing capacity of 690,000 barrels, making it one of the country’s major refining operators.

    For South Korea, an export-driven economy heavily dependent on foreign energy imports, this delivery arrives at a moment of acute anxiety over global supply chains. Over 60% of the nation’s annual crude imports and half of its imports of naphtha — a core petrochemical feedstock critical to plastics manufacturing — pass through the Strait of Hormuz each year. The 1 million barrels carried by the Odessa accounts for between 35% and 50% of South Korea’s total daily crude consumption, underscoring the scale and importance of the single shipment.

    Ongoing instability linked to the prolonged conflict involving Iran, paired with Iran’s control over chokepoint traffic that jolts global markets, has sent international fuel prices soaring in recent months, triggering fears of a full-blown energy crisis across South Korea’s trade-exposed economy. In response, the South Korean government has implemented sweeping emergency measures to curb runaway energy costs: for the first time in decades, it has imposed legally binding price caps on gasoline and other refined petroleum products, ordered domestic refiners to redirect existing naphtha cargoes originally destined for export to meet domestic demand, and launched a national push to secure alternative crude oil supply sources and alternate shipping routes to reduce reliance on the Hormuz chokepoint.

  • Food industry warns oil crisis will drive up cost of Australian groceries

    Food industry warns oil crisis will drive up cost of Australian groceries

    Australian consumers are bracing for steeper grocery bills, after a confluence of geopolitical tensions in the Middle East, spiking oil prices and global supply chain disruptions has created a ‘perfect storm’ that is raising costs across every segment of the domestic food supply network. In a stark public warning issued this week, the Australian Food and Grocery Council (AFGC) confirmed that the ongoing United States-Iran conflict has created persistent instability in global energy markets, keeping crude oil and fuel prices at elevated levels that have not receded despite widespread market expectations for stabilization.\n\nAFGC chief executive Colm Maguire explained that the ripple effects of the Middle East crisis have touched every node of the food and grocery supply chain, from agricultural production to retail shelves. ‘This is a fundamental shift in the cost of doing business. From the fertilisers used on our farms to the fuel in the trucks that transport goods and the energy powering our factories, every single link in the chain is more expensive,’ Maguire told NewsWire in an interview.\n\nThe industry body, which represents more than 200 food, beverage and grocery manufacturers across Australia, is currently conducting a granular, product-by-product assessment to quantify how the ongoing oil crisis will translate to higher shelf prices for consumers. ‘There is no simple answer to how much prices will rise, it is a very complex scenario,’ Maguire noted. ‘The inputs we are dealing with range from fertiliser and oil through to transport, energy production and plastic packaging costs. We will be facing this elevated cost environment for a considerable period of time.’\n\nUnlike broad-based pricing adjustments that can be rolled out quickly, Maguire said supermarkets cannot simply apply a uniform percentage price hike across all products to offset the oil price shock. Instead, individual producers and suppliers must calculate the unique impact of the crisis on their own operating margins before passing adjusted costs through to retailers and end consumers.\n\nThe sharp rise in fuel costs was triggered in March, when activity through the Strait of Hormuz – the critical global chokepoint through which roughly 20% of the world’s daily crude oil consumption passes – was effectively blocked, creating massive bottlenecks that cut global supply volumes significantly. Before the Middle East conflict escalated in January, benchmark crude traded at approximately $US56 ($A78) per barrel. In the months since, prices have fluctuated between $US100 and $US110 ($A138 to $A152) per barrel, with every $10 per barrel increase translating to an extra 10 cents per litre for Australian motorists and freight operators.\n\nWhile higher transport costs are the most obvious impact for most consumers, Maguire emphasized that the cost pressures extend far beyond moving goods across the country. ‘It is complex even for us. From a consumer perspective or even a leadership perspective, it is hard to understand the sheer number of products and processes that oil and petrochemicals touch,’ he said. ‘Everything from the wrapping that goes around the bread to the bottles that hold milk through to tissue boxes and nappies sees broad impacts. Early on, the focus was all on fuel and petrol prices, but the flow-on effects for oil-dependent packaging – which is incredibly important in the grocery industry – are an inevitable added cost.’\n\nFor months, Australian manufacturers, suppliers and retailers absorbed as much of these increased costs as possible to shield consumers already grappling with a widespread cost-of-living crisis, but Maguire warned that the cumulative pressure has become too great to absorb, meaning price hikes are now unavoidable for consumers.\n\nThe strain is already visible across Australia’s agricultural sector, where producer margins are being stretched to breaking point. A separate new report from Rabobank finds that Australian dairy producers are entering the 2026/27 production season with a ‘limited margin for error’ as compounding input costs continue to squeeze profitability.\n\nRaboResearch senior dairy analyst Michael Harvey said that while seasonal growing conditions have improved across most major dairy regions, these modest gains are not enough to offset the persistent upward pressure on production costs. ‘Pressure is building across the broader value chain,’ Harvey explained. ‘Processors are facing higher packaging costs, driven by a spike in global resin prices directly linked to the global oil supply crisis. At the same time, energy and processing costs have increased, as have distribution costs, reflecting higher energy and freight prices, further adding to the cost of getting products to market.’\n\nDairy producers have already begun implementing price hikes to cope with the rising pressure. In late April, Norco chief executive Michael Hampson confirmed that the farmer-owned dairy cooperative would increase milk prices by five cents per litre to cover elevated freight costs. ‘This increase is expected to add about 30c per week to the average household grocery bill, but it will deliver an additional $1m per month back to struggling farmers,’ Hampson said. The announcement came as industry groups warn that broader milk price surges are on the horizon.\n\nMajor national retailers and processors have already adjusted producer payments in response to the crisis. Woolworths announced it would increase payments to farmers supplying its private-label Farmers Own Brand by 10 cents per litre, supporting around 20 small-scale producers. Lactalis, Australia’s largest dairy company which owns popular brands including Ice, Oak and Pauls, will add an extra five cents per litre to payments for more than 800 farm suppliers starting May 1. The industry peak body Australian Dairy Farmers is calling for a permanent 20% across-the-board increase in milk prices, arguing that after suppliers, retailers and government take their respective cuts, the increase would leave producers with enough additional revenue to cover rising costs.\n\nHarvey confirmed that Australian consumers have already started seeing higher milk prices at the checkout due to these compounding input cost pressures. ‘A renewed cycle of food price inflation, including for dairy, would further test consumer resilience,’ he said. ‘Households are already adjusting their shopping behaviour, increasingly trading down to lower-cost private-label products and prioritizing value over well-known brands.’\n\nHarvey added that price increases beyond the farm gate have left processors with little remaining capacity to absorb additional cost shocks, increasing the risk of broader food inflation that could put upward pressure on interest rates in the coming months.

  • ‘Shutdown’: Moody’s expects Dubai hotel occupancy to plummet to 10 percent

    ‘Shutdown’: Moody’s expects Dubai hotel occupancy to plummet to 10 percent

    The ongoing US-Israeli military campaign against Iran has triggered an unprecedented existential crisis for Dubai’s world-famous hospitality and tourism industry, with top financial analysts forecasting a catastrophic collapse in hotel occupancy for the second quarter of this year, The Wall Street Journal reported Wednesday.

    According to projections from New York-based credit rating and financial analysis firm Moody’s, Dubai’s overall hotel occupancy is on track to drop to just 10% by the end of the second quarter on June 30, down from a pre-conflict level of 80% recorded before the outbreak of hostilities on February 28. Moody’s called the collapse an “effective shutdown of large parts of the hospitality sector”, a core economic engine for the emirate that draws millions of international tourists and business travelers annually.

    Official data from Dubai Airports released Monday underscores the severity of the downturn. Total passenger traffic for the first three months of 2026 fell by at least 2.5 million compared to the same period in 2025, with March alone seeing a 66% year-on-year drop. Fearing regional instability, international travelers have overwhelmingly canceled trips to the Gulf, cutting off the steady flow of visitors Dubai’s hospitality ecosystem relies on. The collapse in demand has already triggered widespread temporary and permanent hotel closures, mass layoffs for sector workers, and a rapid erosion of business confidence across the emirate.

    In a bid to reverse the crisis, the United Arab Emirates announced Saturday that it would lift all air travel restrictions imposed after Iran launched retaliatory strikes against Gulf nations hosting or cooperating with U.S. military forces. However, the policy shift has yet to reverse the steep decline in visitor numbers or shore up investor confidence.

    Middle East Eye interviews with hospitality workers and business leaders across the UAE earlier this week paint a grim picture of collapsing sentiment. Tatiana, a Russian entrepreneur who runs a business logistics firm supporting new enterprises setting up operations in the Gulf, described a sudden, dramatic shift in outlook among both existing and prospective businesses.

    “Within the first two weeks, people decided it’s no longer worth living or doing business here,” she said. “They weren’t panicking, necessarily, but they just saw no upside to staying. Businesses began liquidating assets almost overnight.” Tatiana added that her own family is now relocating to Europe, joining a growing exodus of foreign investors and professionals from Dubai.

    To attract what little demand remains, top luxury hotel brands across Dubai have slashed room rates far below typical seasonal levels, a striking shift for one of the world’s most expensive urban destinations for luxury travel. The newly opened Atlantis The Royal, which markets itself as “the most ultra-luxury experiential resort in the world”, is offering a standard sea-view suite with a private balcony, plus breakfast for two, for just $800 per night this upcoming weekend. Beachfront property Mandarin Oriental Jumeira lists a standard room for $448 per night including parking and breakfast, while Four Seasons Resort Jumeirah lists the same type of room for $359 per night. Downtown Dubai’s Four Seasons International Finance Centre offers rooms for as low as $243 per night. All of these rates are substantially lower than pricing for the same properties and same seasonal window in previous years, as properties compete for a drastically smaller pool of potential guests.

  • Trump gives 4 July ultimatum to EU to approve trade deal with US

    Trump gives 4 July ultimatum to EU to approve trade deal with US

    A fresh flashpoint has emerged in transatlantic trade negotiations, after U.S. President Donald Trump issued an ultimatum to the European Union: slash all levies on American goods to zero by July 4, or face sharply increased tariffs on EU exports entering the United States.

    The ultimatum came following a phone conversation between Trump and European Commission President Ursula von der Leyen. In a post on social media, Trump claimed the EU had already committed to the zero-tariff plan as part of a landmark bilateral trade agreement reached between the two leaders last July. He wrote that he granted von der Leyen an extension until the U.S. Independence Day – the nation’s 250th birthday – warning that failure to meet the demand would trigger immediate, far higher tariffs than currently in place.

    Von der Leyen offered a more measured assessment in her own post on the social platform X, acknowledging that negotiators have made solid progress toward tariff reduction ahead of Trump’s deadline. She emphasized that both sides remain fully dedicated to implementing the framework agreement the two leaders signed last year.

    The path to finalizing the deal has hit a major snag this week, however. A round of negotiations between EU lawmakers and representatives of the bloc’s 27 member states concluded Wednesday without a consensus on how to move forward with enactment.

    The original deal, struck after Trump played a round of golf at his Turnberry luxury resort in Scotland, rolled back a planned 30% Trump tariff on European goods, settling on a permanent 15% levy for EU exports to the U.S. The pact secured conditional backing from the European Parliament back in March, when a majority of lawmakers voted in favor of implementing legislation. But legislators attached critical safeguards to their approval, tying any commitment to eliminate tariffs on U.S. goods to one key demand: the U.S. must permanently exempt European-made steel and aluminum from Trump’s 50% global tariff on those metals.

    Even with parliamentary approval in hand, the deal still requires formal sign-off from all 27 EU national governments, a hurdle that has divided negotiators. Ahead of Trump’s latest social media announcement, Bernd Lange, the European Parliament’s lead negotiator on the file, noted Thursday that talks were moving forward but still had ground to cover. “We remain more committed than ever to advance and defend Parliament’s mandate so as to provide additional guarantees that will benefit citizens and companies in both the EU and the US,” Lange said in a statement. Negotiators have scheduled their next round of talks for May 19 in Strasbourg.

    This is not the first time Trump has pressed the EU to speed up compliance. Last week, he took to his Truth Social platform to accuse the bloc of failing to honor the terms of the already agreed deal, announcing he would raise tariffs on EU-produced trucks and cars to 25%. The latest ultimatum raises the stakes considerably, putting transatlantic trade relations on a countdown to a potential new trade war just over a month from now.

  • War gains, long-term pain: Wall Street’s core business at risk due to Iran war

    War gains, long-term pain: Wall Street’s core business at risk due to Iran war

    In the wake of the US and Israeli military campaign against Iran, initial market reactions have painted a misleading picture of Wall Street’s fortunes, according to senior market analysts interviewed by Middle East Eye. While immediate short-term windfalls from spiking oil prices and amplified market volatility have lifted headline earnings, these gains are masking a growing slowdown in dealmaking that threatens the foundation of the finance industry’s core operations.

    Within days of the conflict’s launch, global oil prices surged dramatically, with Brent crude jumping 8.6% to roughly $72 per barrel in the first trading session after hostilities broke out. This spike lifted share values for major energy giants including ExxonMobil and Chevron, while heightened market turbulence drove a sharp uptick in trading revenues across major investment banks. Defense sector equities also rallied early on, with leading contractors Northrop Grumman, RTX Corporation and Lockheed Martin all posting immediate gains on expectations of expanded military spending. Goldman Sachs even reported a 48% jump in investment banking fees to $2.84 billion, with the bank acknowledging the conflict had given trading revenues a measurable boost.

    But these early, visible gains hide deeper underlying vulnerabilities, experts warn. While first-quarter 2025 earnings appear strong on paper, the vast majority of that performance traces back to transactions that were finalized before the first strikes on Iran on February 28. The full negative impact of the conflict on global deal flow is only just beginning to emerge.

    “Wall Street has done meaningfully less well out of the Iran war than might meet the eye,” explained Ilya Spivak, head of global macro at tastylive, a U.S.-based financial media and trading platform. Today, Wall Street executives are sounding the alarm that the conflict is complicating cross-border and domestic transactions, delaying planned initial public offerings (IPOs), and putting the entire pipeline of mergers, acquisitions (M&A) and new stock listings at risk.

    The early upward momentum across conflict-linked sectors also proved far from sustainable. While defense stocks jumped initially, many individual firms have struggled to hold gains in subsequent weeks, leaving the broader aerospace and defense sector largely flat for the year to date. Energy equities have followed a similar trajectory, giving up all their post-conflict gains after peaking in early March. Spivak added that recent broad market rebounds are “more driven by opportunistic attempts to ‘buy the dip’ in Magnificent 7 (Mag7) stocks rather than reflecting actual war-related upside for companies.” The Mag7—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla—are seven large-cap tech names that have driven the vast majority of U.S. market growth in recent years.

    The core challenge, Spivak explained, is that trading revenue cannot fully offset a slowdown in traditional dealmaking. Trading operations require far heavier infrastructure investment and deliver significantly thinner profit margins than the advisory and underwriting work that forms the core of investment banking profitability. “Increased volatility can help offset a slowdown in dealmaking, but its thinner margins—of 25 to 45 percent, compared with those for investment banking of 45 to 65 percent—mean that you need about $1.50 in trading revenue to make up $1 of dealmaking revenue,” Spivak said.

    That gap is already showing up in hard data. As of early March, the number of announced U.S. mergers had fallen roughly 23% year-over-year to 1,795, a drop that reflects both pre-existing market weakness and new uncertainty fueled by the conflict. Goldman Sachs CEO David Solomon has openly acknowledged that IPO activity slowed sharply in March, with seven of the 10 largest U.S. listings from the first quarter trading below their offer price within a month of launch.

    “The disruption runs deeper than Wall Street’s earnings headlines suggest,” said Javed Hassan, a former investment banker who previously worked in London and Hong Kong for Swiss Re’s investment banking division. Hassan noted that major global banks with large trade finance portfolios—including Citigroup, HSBC and Standard Chartered—have already flagged rising counterparty risks in commodity-linked transactions. “The difficulty is not just energy prices, it is that no one can write a contract with confidence when the baseline keeps shifting,” Hassan said. “That uncertainty is the supply chain dimension Wall Street’s earnings headlines are not yet capturing.”

    Geopolitical conflict disrupting global financial markets is not a new phenomenon. Previous major conflicts, from the 2003 Iraq War to Russia’s 2022 full-scale invasion of Ukraine, all triggered equity market pullbacks, widening credit spreads and sharp slowdowns in IPO activity. But Mir Mohammad Ali Khan, founder and former chairman of KMS Investment Bank at 110 Wall Street, argues the Iran conflict is unique due to its direct and lasting impact on global energy flows through the Strait of Hormuz.

    “Previous conflicts, including the wars in Afghanistan and Iraq, did not have the long-term direct impact on US financial markets,” Khan told Middle East Eye. “Letting this conflict drag on is not in Wall Street’s interest.”

    Industry executives now agree that the second quarter of 2025 will be the first full test of the conflict’s impact, as it will be the first period entirely exposed to war-related disruptions. “Looking ahead, planning, engagement and pipelines remain healthy, but of course, developments in the Middle East could have an impact on deal execution and timing,” JPMorgan CFO Jeremy Barnum said. Citigroup CFO Gonzalo Luchetti echoed that warning, noting a prolonged conflict could introduce “risk of deferrals” for planned deals later in the year.

    Those warnings are grounded in the scale of the energy disruption. Before the conflict began, roughly a quarter of all global seaborne oil and 20% of global liquefied natural gas traded through the Strait of Hormuz—a key shipping lane that has been effectively closed since early March. The Federal Reserve Bank of Dallas has already labeled the conflict the largest geopolitical oil supply shock on record, estimating that removing nearly one-fifth of global oil supply could cut global GDP growth by 2.9 percentage points in a single quarter.

    More than two months into the conflict, the economic fallout is already showing up in broader U.S. economic data. Energy costs rose 10.9% in March alone, pushing average U.S. gasoline prices above $4 per gallon and lifting overall inflation to 3.3%—far above the Federal Reserve’s 2% target. “This is a one-quarter blip where the effects of it really weren’t being felt, but I don’t really see how this is sustainable,” said William D. Cohan, a former senior Wall Street M&A investment banker with experience at Lazard Frères & Co, Merrill Lynch and JPMorganChase. When corporate profitability falls, he explained, it directly reduces companies’ willingness to pursue new deals or take on borrowed capital. “People like to say Wall Street is not Main Street, [but] Wall Street is highly correlated to Main Street,” Cohan added.

    Rising energy and consumer costs have already rippled through to broader borrowing conditions. U.S. Treasury yields and 30-year mortgage rates have climbed steadily, pushing up borrowing costs across the economy and eliminating room for the Federal Reserve to cut interest rates as markets previously expected.

    “The single most important factor determining the trajectory of stock prices is the central bank’s monetary policy,” said Alex Krainer, a Europe-based market analyst, commodities expert and former hedge fund manager. “Stock markets are going higher not because the economy is growing… but because the Federal Reserve is flooding the financial system with liquidity.” If the conflict continues to fuel persistent inflation, Krainer warned, the dollar’s purchasing power will erode, meaning the nominal market gains investors see on paper will not translate into actual, inflation-adjusted wealth.

    The International Monetary Fund has already downgraded its 2025 global growth forecasts and warned that a prolonged conflict could push the global economy to the brink of recession. For Wall Street, which relies on steady economic growth and cheap borrowing costs to support deal activity, that outcome poses an existential threat to its core revenue model. “Look, Wall Street is a confidence game,” said Cohan. “It’s a hard thing to bet against, but at some point investors, corporations, CEOs are going to have enough of this, and they are going to pull back.”

    Despite the clear short-term risks to profitability, not all analysts agree that Wall Street has an incentive to push for a rapid ceasefire. “Wall Street’s interest is in the war continuing, not stopping. I don’t think they will exert meaningful pressure on the administration for a ceasefire – probably quite the contrary,” Krainer said. Drawing on his conversations with financial and policy industry contacts, Krainer argued that control over Iran’s vast natural resources, rather than regional security, is the core strategic driver for many leading financial players.

    “Wall Street’s objective is primarily to take down the regime in Tehran,” he said. “Iran is the fifth richest nation in the world in terms of natural resources, estimated at $30 trillion. If they were able to install their own puppet in Tehran, all that wealth could become their collateral.” For Wall Street, Krainer argues, the long-term potential strategic prize far outweighs any short-term hits to industry balance sheets from the current conflict-induced deal slowdown.

  • ASX 200 surges as plunging oil prices send mining giants soaring

    ASX 200 surges as plunging oil prices send mining giants soaring

    A confluence of bullish signals from global markets and easing geopolitical tensions in the Middle East pushed Australia’s benchmark share index to solid gains on Thursday, capping a day of uneven sector performance driven by falling crude oil prices. The ASX 200 closed 84.50 points, or 0.96%, higher at 8878.10, while the broader All Ordinaries index rose 90.90 points, or 1.01%, to settle at 9107. The Australian dollar also edged up 0.20% to trade at 72.49 U.S. cents by market close. The rally followed a record-setting overnight session on Wall Street, where the S&P 500 gained 1.5% and the technology-focused Nasdaq climbed 2.08% to both hit new all-time closing highs. The upward momentum in U.S. equities was triggered by a breakthrough diplomatic development: the U.S. government tabled a one-page proposal that could pave the way for a gradual reopening of the Strait of Hormuz, a critical global oil chokepoint. U.S. President Donald Trump announced via social media that he was pausing military “Project Freedom” for a short period to allow time for a final agreement with Iran to be negotiated and signed. IG market analyst Tony Sycamore noted that this more constructive geopolitical tone injected fresh optimism into global markets, pulling West Texas Intermediate crude prices back below the key $100 per barrel threshold. For the ASX, falling oil prices delivered an outsized boost to mining and resources stocks, which led all 11 market sectors with a 3.67% collective gain. Major iron ore miners posted double-digit gains in line with the sector: BHP rose 3.78% to $58.52, Rio Tinto gained 3.23% to $180.24, and Fortescue Metals outperformed many peers with a 3.73% rise to $21.42. Gold producers also rallied alongside rising spot gold prices, which traded at $4709 per ounce at press time. Northern Star Resources climbed 4.38% to $31.70, Evolution Mining surged 6.33% to $13.10, and Newmont Corporation added 2.78% to $160.06. Consumer staples, another key driver of the day’s gains, also saw broad upward movement. Woolworths closed 0.92% higher at $34.16, Coles eked out a 0.37% gain to $21.81, and Treasury Wine Estates rose 1.17% to $4.34. Not all sectors joined the rally, however. Energy stocks bore the brunt of lower crude prices, posting broad losses across the board. Woodside Energy slumped 4.24% to $30.49, Santos fell 3.30% to $7.63, and fuel retailer Ampol dropped 2.28% to $34.22. In the fintech space, digital financial services firm Zip bucked broader market trends to post a 4.76% gain to $2.64 after it reaffirmed its full-year 2026 guidance of $260 million in earnings before interest and tax. Conversely, wagering operator TAB suffered a steep 23.48% nosedive to $0.88 after Australia’s financial intelligence agency Austrac issued a formal notice over the firm’s compliance failures with anti-money laundering and counter-terrorism financing regulations. Gaming firm Lights & Wonder also closed 8.34% lower at $102.66 after reporting mixed first-quarter 2026 results: overall earnings rose 5% year-over-year, but adjusted net profit after tax slipped 2% to US$115 million (AU$159 million). In total, seven of the ASX’s 11 sectors finished the session in positive territory, closing out one of the market’s strongest single-day gains in recent weeks. Altogether, the day’s trading highlighted how shifting geopolitical developments and global market momentum continue to shape Australian equities, with commodity price movements driving sharp divergences across sector performance.

  • Surging fuel prices and data centre costs wipe out Australia’s nine-year trade surplus

    Surging fuel prices and data centre costs wipe out Australia’s nine-year trade surplus

    After nearly a decade of consistent goods trade surpluses, Australia’s unbroken run has come to an abrupt end, with official data revealing a $1.8 billion deficit in March driven by two key factors: skyrocketing global fuel costs and a historic, unexpected surge in data centre equipment imports from Taiwan.

    The Australian Bureau of Statistics (ABS) published the revised trade data on Thursday, confirming the sharp reversal in the country’s goods trade balance. Analysts point to two primary contributors to the unanticipated deficit: the rapid spike in global energy prices and a one-in-a-generation jump in imports of automatic data processing (ADP) equipment, core infrastructure for modern data centres.

    First, the global oil market disruption that rippled across the world in March hit Australia’s import bill particularly hard. With roughly 20% of the world’s total crude oil shipments passing through the Strait of Hormuz, regional conflict that disrupted shipping lanes in the key chokepoint sent oil prices soaring from around $US56 per barrel in January, before tensions escalated, to a range of $US100 to $US110 per barrel by March. This translated directly to a 53.6% jump in Australia’s total fuel and lubricant import spending, adding an extra $2.1 billion to the import bill and pushing the total value of fuel imports to $6.1 billion for the month. For Australian consumers, every $US10 increase in crude prices adds an extra 10 cents per litre at domestic fuel pumps, a burden that has weighed heavily on household budgets through the early months of 2024.

    The second, far more unexpected factor driving the deficit was a 322% monthly surge in ADP equipment imports from Taiwan. The total value of these shipments jumped from $1.6 billion in February to $4.8 billion in March, more than doubling the previous record high of $2.3 billion for this product category. Economists say most of this imported equipment consists of high-performance semiconductors and computing hardware destined for Australia’s growing fleet of new data centres, as demand for cloud computing and AI infrastructure booms domestically.

    “The biggest surprise for markets and analysts was unquestionably the jump in ADP equipment imports,” explained Harry Ottley, senior economist at Commonwealth Bank of Australia. “The vast majority is almost certainly chips and computing hardware for data centre buildouts, and this was a material increase that no one forecast. We still don’t know for certain if this is a one-off large shipment for a single major infrastructure project, or the start of a sustained upward trend in capital imports for the tech sector.”

    Ottley added that while the surge in fuel prices was largely expected given the ongoing Middle Eastern tensions, the scale of the ADP import jump caught the entire industry off guard.

    The deficit was also exacerbated by an unexpected downturn in Australia’s key rural export sector, which saw an 11.6% drop in rural goods export values in March. Non-rural exports remained largely flat overall: a 0.3% uptick was driven by rising global gas prices that offset falling values for iron ore and coal, two of Australia’s largest export commodities.

    Looking ahead, Ottley noted that the pressure on Australia’s trade balance is likely to persist in the coming months, even as some factors offset the drag. “Energy markets have remained tight through early May, and while additional shipments are now arriving, the value of fuel imports is likely to stay elevated in the next few monthly reports,” he said. “This will continue to put downward pressure on the overall trade balance, though that drag will be partially offset by higher export prices for one of Australia’s key commodities – liquefied natural gas.”

    Ottley projected that the March trade deficit will cut approximately 0.8 percentage points from Australia’s gross domestic product for the current quarter, though he noted that much of the hit to GDP from falling net exports will be countered by gains elsewhere in the economy: the massive ADP equipment imports represent a major increase in private business investment, a positive driver of long-term economic growth.

    The end of Australia’s nine-year trade surplus streak marks a key shift in the country’s trade dynamics, driven by both global energy market volatility and a historic wave of capital investment in the domestic digital economy.

  • Westpac economist urges government to cut ‘life admin’ burden on women

    Westpac economist urges government to cut ‘life admin’ burden on women

    Ahead of the upcoming Australian federal budget, Westpac’s top economist has sounded a sharp warning about growing government overreach and called for sweeping policy reforms to unlock economic potential for Australian women and older workers. In a high-profile address to the National Press Club, chief economist Luci Ellis made a targeted case for rolling back unnecessary bureaucratic complexity, arguing that ballooning regulation and administrative burdens are disproportionately holding back Australian women, while breeding a culture of “learned helplessness” across the community.

    Ellis pointed to the rapid, unplanned expansion of the National Disability Insurance Scheme (NDIS) as a defining example of well-intentioned policy gone awry. Launched with the core mission of supporting Australians living with permanent, severe disabilities, the scheme has since expanded to cover a far broader range of services, creating layers of unnecessary administrative work that falls heaviest on family members — most of whom are women. Even well-meaning additional regulation, she emphasized, ultimately adds unnecessary complexity to daily household life.

    “Policy circles are seeing a growing expectation that government must step in to solve every problem, and that expectation has driven exponential growth in the size and scope of the public sector,” Ellis explained in her speech. She highlighted the tangible downstream impacts of this shift: a growing share of household income going toward taxes, an ever-expanding regulatory footprint across industries, and a mounting “life admin” burden that falls disproportionately on women.

    Ellis drew on a wide range of examples to illustrate the scope of regulatory bloat, from the multiple layers of approval developers must secure from overlapping government agencies to the ever-expanding length of Australia’s Income Tax Assessment Act. In a memorable, lighthearted jab at the growing complexity of public policy, she referenced a lyric from iconic feminist artist Avril Lavigne: “why did you have to go and make things so complicated.”

    Beyond regulatory bloat, Ellis warned that constant government intervention every time a challenge arises risks creating a state of “learned helplessness” across the community. She also called out outdated misconceptions about women’s workforce participation and population ageing that continue to hold back Australia’s economy, arguing that current policy is built on flawed assumptions that do not reflect modern demographic and labor market trends.

    “If the government wants to harness the full economic opportunity of an ageing population and a workforce that includes more older workers and more women, it should prioritize removing barriers to women entering, re-entering, and remaining in the workforce for as long as they choose and are able,” Ellis said.

    She emphasized that getting the NDIS back on a sustainable footing and refocusing it on its core mission of supporting severely disabled people would go a long way toward reducing the unpaid care burden falling on Australian women, who currently carry a disproportionate share of responsibility for both caring for children and ageing parents. As an alternative to the current NDIS model, Ellis suggested that well-funded school-based support, with training for both teachers and parents, could better support many children currently on the scheme, without adding layers of extra administrative work that require parents to attend multiple provider appointments.

    Ellis added that reducing administrative burdens for families should be a non-negotiable core principle guiding all federal and state government initiatives, not just disability policy. She also called for targeted overhauls of tax and retirement policy to better support women who take career breaks for caregiving, noting that much of Australia’s existing economic policy framework is built on the outdated assumption that an ageing population will automatically lead to a shrinking workforce.

    “Budgets, intergenerational reviews, and all types of public policy should be revised to reflect actual demographic and labor market trends, rather than outdated first-generation assumptions about ageing,” she said. The Labor government is set to unveil its fifth federal budget on May 12, with policymakers facing growing pressure to address cost-of-living pressures and unlock long-term economic growth.