- ASX SPI 200 futures up 0.3% to 7,101.00
- Dow Average little changed at 32,223.42
- Aussie up 0.4% to 0.6970 per US$
- U.S. 10-year yield fell 3.6bps to 2.8822%
- Australia 3-year bond yield rose 1bp to 2.83%
- Australia 10-year bond yield fell 2bps to 3.38%
- Gold spot up 0.7% to $1,824.50
- Brent futures up 2.1% to $113.93/bbl
- 11:30am: (AU) RBA Minutes of May Policy Meeting
Stocks fell back toward session lows in the last hour of trading Monday as investors assessed the latest signs of economic malaise in the US and China.
The S&P 500 dropped, dragged lower by a slide in megacaps including Tesla Inc., Amazon.com Inc. and Apple Inc. The tech-heavy Nasdaq 100 dropped more than 1%. Equity markets gave up earlier gains in a seesaw session amid data showing China’s industrial output and consumer spending hit the worst levels since the pandemic began, hurt by Covid lockdowns. New York state manufacturing activity unexpectedly contracted in May, stoking concerns of slowing economic activity that may complicate the Federal Reserve’s policy path.
Adding to those growth concerns, New York City is preparing to hit a high Covid-transmission level in the coming days that would have it reconsidering mask requirements in public places.
The risk of an economic downturn amid price pressures and rising borrowing costs remains the major worry for markets. Goldman Sachs Group Inc. Senior Chairman Lloyd Blankfein urged companies and consumers to gird for a US recession, saying it’s a “very, very high risk.” That said, while the US market is pricing in 40% odds of a recession, history shows the S&P 500 tended to rally in the absence of the worst case, according to a study by UBS Group AG.
One of the world’s biggest laggards in electric vehicle adoption, Australia, is finally warming to the idea.
On the campaign trail three years ago, Prime Minister Scott Morrisonfamously told car-loving Australians that EVs were too feeble to tow trailers and boats. Battery-powered cars would be the death of the weekend, he warned.
Back then, not even one in every hundred new vehicles in Australia was electric, and it was rare to spot one on Sydney’s roads. Even tractors outsold them almost 2-to-1, and Morrison went on to claim an unexpected election victory.
The picture is changing. EV sales in Australia are soaring — led by the almost-ubiquitous Tesla Model 3 — and more brands and models are arriving in the market. A national election on Saturday could prove pivotal: Morrison, who has ruled out subsidies for electric cars, trails in opinion polls. The opposition Labor party, meanwhile, is offering tax exemptions on many EVs.
A surge in demand saw electric vehicle sales in Australia triple last year, to about 20,665, and hasn’t relented in 2022, according to Behyad Jafari, chief executive officer of the Sydney-based Electric Vehicle Council. Politicians now know better than to dismiss EVs out of hand, and a change in government might push adoption closer to global standards, he told me last week.
“A fresh set of eyes could only be more helpful,” Jafari said. “No one dares to be hostile to electric vehicles anymore. The trend is moving in our direction.”
Morrison’s federal government has said its A$250 million ($172 million) Future Fuels Fund should deliver EV charging infrastructure to 50,000 households and fund 1,000 public-charging stations. But there’s no sign of financial support for EV purchases.
Labor is also pledging cash for charging stations on Australian highways, and is going a step further. The party plans to exempt many electric cars from a 5% import tariff, as well as a 47% tax on EVs that are provided by employers to staff for private use.
While Morrison once derided EVs for political gain, Labor leader Anthony Albanese is promoting them to try and win votes. Last month, he visited Tritium, a Brisbane-based maker of fast-chargers for EVs. He called theNasdaq-listed company, which has a market value of about $1.4 billion, a “great Australian success story.”
Still, plug-in vehicles make up only 2% of all new-car sales in Australia, industry data show. That’s way behind a global average of 13% in the final three months of 2021, and a tiny fraction of the market share in leading adopters like China, Norway and Sweden.
Australia also lacks fuel-efficiency standards that could evict the most polluting vehicles from the market and make more room for EVs. That’s led carmakers to prioritize other nations for new models, meaning those who do switch to electrics face limited choice and need patience — wait times for some deliveries run to months.
Even if there isn’t a change in the national government this weekend, political winds are shifting. Last week, Western Australia announcedA$3,500 rebates on EV purchases. That means every Australian state and territory, including the most populous, New South Wales, now has announced some form of EV subsidy, incentive or tax exemption.