The n 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 n Securities Exchange, with the benchmark S&P500 in New York plummeting by six per cent during Friday trade.
The futures market in 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 n share market investments, with technology and mining stocks expected to take a big hit.
In another bad sign, the n dollar has also slipped below 60 US cents for the first time since the start of the Covid pandemic in March 2020, stirring fears of higher inflation as imports become more expensive.
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 .
‘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 currency’s fortunes are tied to global growth sentiment, with the n dollar previously falling under that 60 US cents mark during the start of the pandemic.
The n dollar is now in a worse position than the aftermath of American investment bank Lehman Brothers collapsing in September 2008, which led to the Reserve Bank intervening in the currency market to keep it above 60 US cents.
Mr McCarthy said the imposition of new American tariffs, including 34 per cent on China and 10 per cent on , 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 and that’s why the market are repricing so aggressively because the perception of what 2025 looks like has changed enormously, particularly since the introduction of tariffs.’
Mr McCarthy said financial markets now regarded a global recession as a one-in-two chance.
‘A real risk: some global strategists are now rating it as a better than 50 per cent chance that we’re heading into a global recession,’ he said.
‘If the global economy, particularly the US and China, are under pressure, then it’s inevitable that the n economy will be under pressure.’
Tech stocks are expected to fare badly on Monday with Life360 plunging by 9.8 per cent on Friday, with its share price having tripled in 2024.
‘Growth-exposed stocks are particularly vulnerable today so that means the previously glamorous tech stocks are likely to be under severe pressure,’ he said.
Billionaire Elon Musk is reportedly so incensed with the Trump Administration tariffs he is expected to quit as post running DOGE, the Department of Government Efficiency tasked with cutting $US1trillion worth of government spending.