NAB Morning Call The bounce and the Beautiful Bill
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May 14, 2025 Equity markets are showing restraint amid a lack of major announcements, with tech stocks being the standout. Recent tariff cuts on China are already boosting container ship bookings. The Beautiful Bill is gaining attention, viewed as a mixed bag that may increase debt without fostering growth. Internationally, potential negotiations between Putin and Zelensky could sway European market sentiment, while contrasting wage dynamics in Australia and the US prompt discussion on monetary policies.
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US Market Consolidation & Yields
- US equity markets are consolidating, awaiting stimulus from tax reforms or earnings growth.
- Rising bond yields reflect reduced expectations for imminent Fed rate cuts and resilient US data.
Complex Budget Bill Risks Deficit
- The US budget bill is a complex mix of policies risking increased deficits without clear economic growth benefits.
- Many provisions, like tax cuts and bonuses, may fail to significantly boost the economy.
Trade Activity Boosted by Tariff Cuts
- The US-China tariff reduction has boosted container ship bookings by around 50%.
- This tariff cut signals increased trade activity, though retail sales impact is still uncertain.