K: Financial and Insurance Services

Goldman Sachs boss says chances of US recession have increased after Trump tariffs

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Original article by Kalyeena Makortoff
The Guardian – Page: Online : 15-Apr-25

Goldman Sachs CEO David Solomon has told analysts during an earnings call to discuss its first quarter results that the bank thinks Donald Trump’s tariffs have increased the chances of a US recession. He said that the growing uncertainty over the fallout of US tariffs was making it harder for Goldman Sachs’ clients to make important business decisions, and that an escalation in the trade war poses "material risks" for US and global growth. Goldman Sachs’ first quarter results saw it record a pre-tax profit of $US5.6 billion, up eight per cent

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How the bond market forced Trump to retreat

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Original article by Cliona O’Dowd
The Australian – Page: 13 & 20 : 11-Apr-25

A dramatic sell-off of US treasuries led to US President Donald Trump announcing a 90-day reprieve of reciprocal tariffs on all countries bar China, rather than the recent sell-off on Wall Street that some have suggested. The sell-off of US treasuries was attributed to global investors such as China and Japan losing faith in the US, and was compounded by hedge funds unwinding what is known as the ‘basis trade’. Despite Trump’s decision to pause his reciprocal tariffs, AMP chief economist Shane Oliver says there could still be a recession in the US, with Oliver saying the significant damage that Trump has done to confidence in the US will be hard to recover.

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AMP LIMITED – ASX AMP

AusSuper’s six-day delay on cyber scam

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Original article by Cliona O’Dowd
The Australian – Page: 2 : 9-Apr-25

The 74-year old woman who lost more than $400,000 from her AustralianSuper account when it was targeted by scammers informed the industry super fund of the fraud on 28 March. The siphoned money was channeled through five separate Commonwealth Bank of Australia accounts, but it has been revealed that AustralianSuper did not inform CBA of the fraud until 3 April. The co-ordinated cyber-attack also targeted several other major industry super funds, although AustralianSuper is the only one to have confirmed that its members have lost money. The Australian Prudential Regulation Authority has increased its oversight of the super industry in the wake of the cyber-attack.

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AUSTRALIANSUPER PTY LTDCOMMONWEALTH BANK OF AUSTRALIA – ASX CBAAUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Medibank must release hack reports

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Original article by Angelica Snowden
The Australian – Page: 17 : 8-Apr-25

The Federal Court has ruled that Medibank’s customers should be given access to cyber-security reports that were prepared by Deloitte in the wake of the health insurer’s data breach in October 2022. Medibank had contended that the reports were subject to legal professional privilege. Justice Helen Rofe noted that Medibank had consistently stated that it would share the results of the external review, although she concluded that chairman Mike Wilkins had in fact never intended to do so. Customers who were affected by the cyber-attack are pursuing a class action against Medibank.

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MEDIBANK PRIVATE LIMITED – ASX MPL, FEDERAL COURT OF AUSTRALIA, DELOITTE TOUCHE TOHMATSU LIMITED

Retirees trying to change their super can’t log into their accounts

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Original article by Michelle Bowes
The Australian Financial Review – Page: 29 : 8-Apr-25

Financial advisers have cautioned superanuation fund members from making changes to their investment options – such as switching from shares to cash – in response to the global sharemarket ructions. Anxiety among super fund members has been heightened by the recent hacking attack on some funds. Access to the accounts of affected funds has been restored, but some still have limited functionality; this includes the ability to make changes to their investment options. Super funds are also emphasising to their members that superannuation is a long-time investment.

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Traders temper rate bets after RBA holds

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Original article by Cecile Lefort
The Australian Financial Review – Page: 25 : 2-Apr-25

Bond market traders are now pricing in a 67 per cent chance tha the Reserve Bank of Australia will reduce the cash rate in May, after its widely anticipated decision to leave rates unchanged on Tuesday. Money markets had put the odds of a rate cut in May at 77 per cent prior to the RBA’s latest two-day monetary policy meeting. However, market participants have still fully priced an interest rate cut at the RBA’s next meeting in July. Christian Bayliss from Fortlake Asset Management says the quarterly CPI data to be released in late April will be crucial to the decision on interest rates in May.

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RESERVE BANK OF AUSTRALIA, FORTLAKE ASSET MANAGEMENT LIMITED

ASX’s $42b plunge seals worst start in years

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Original article by Alex Gluyas
The Australian Financial Review – Page: 25 : 1-Apr-25

Australia’s benchmark S&P/ASX 200 shed 3.9 per cent during the first quarter of 2025; this represents the local bourse’s worst start to a calendar year since the onset of the pandemic in 2020. However, Australian equities have outperformed Wall Street, with the S&P 500 having shed 5.1 per cent in the first quarter and 6.3 per cent in the month of March. Meanwhile, Matthew Sherwood from Perpetual estimates that the chances of a recession is now more than 30 per cent, adding that the Trump’s administration’s impending tariff reforms will be a key driver of the global economic outlook in the near-term.

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STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, PERPETUAL LIMITED – ASX PPT

Risk of mortgage stress dropped in February, after the Reserve Bank cut interest rates for the first time since 2020

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Original article by Roy Morgan
Market Research Update – Page: Online : 26-Mar-25

New research from Roy Morgan shows that 1,549,000 mortgage holders (27.7%) were ‘At Risk’ of ‘mortgage stress’ in February 2025. The share of mortgage holders ‘At Risk’ of ‘mortgage stress’ is the lowest since November 2024. After the introduction of the Stage 3 tax cuts in July 2024 the share of mortgage holders ‘At Risk’ fell for four straight months until October, but it then began to increase for the next three months until the Reserve Bank’s interest rate cut in mid-February. The number of Australians ‘At Risk’ of mortgage stress has increased by 742,000 since May 2022 when the RBA began the cycle of interest rate increases. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 1,066,000 (19.6% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.7%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with more than 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

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ROY MORGAN LIMITED, RESERVE BANK OF AUSTRALIA

Overeach for ASIC to fine us, says big super

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Original article by Lucas Baird
The Australian Financial Review – Page: 10 : 14-Mar-25

Australian Securities and Investments Commission chairman Joe Longo has labelled the superananuation sector the "poster child" for governance failures, with Mary Delahunty saying Longo’s comments are an "overeach". Delahunty is from the Association of Superannuation Funds of Australia, which is the lobby group for the superannuation industry, with ASIC seeking to impose fines on AustralianSuper over its alleged failure to deal with thousands of death benefit claims in a prompt manner. However, Delahunty believes ASIC should use methods such as enforceable undertakings to regulate the industry, rather than fines.

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AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION,(SPACE)THE ASSOCIATION OF SUPERANNUATION FUNDS OF AUSTRALIA LIMITED,(SPACE)AUSTRALIANSUPER PTY LTD

ASX faces dividend horror story as companies slash payouts

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Original article by Alex Gluyas
The Australian Financial Review – Page: 21 : 5-Mar-25

The combined dividend payout for companies in the benchmark S&P/ASX 200 Index was just $31.2bn in the February reporting season. Bell Potter strategist Richard Coppleson notes that it is the lowest payout for this period since 2021, at the height of the COVID-19 pandemic. The three major listed iron ore miners reduced their dividends in response to a sharp fall in the price of the steel input during 2024. Citigroup expects further decline in the mining sector’s dividends, amid expectations that the iron ore price will also fall as new supply enters the market later in 2025. The firm also anticipates lower dividends from bank stocks, which dominate the ASX along with resources stocks.

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STANDARD AND POOR’S ASX 200 INDEX, BELL POTTER SECURITIES LIMITED, CITIGROUP PTY LTD