Global markets are at an interesting turning point—and "interesting" might be the polite way to say it.
In the first quarter of 2025, we’ve seen three major economies take three very different paths. The US is shrinking, China’s stimulating, and Australia’s... holding the line (for now). For business owners, investors, and everyday Aussies wondering what it all means, we’ve broken it down in plain English.
Let’s dive into what’s happening, why it matters, and what to watch next.
The big news out of the States is that their economy contracted by 0.3% (annualised) in Q1 2025. That’s a slowdown with serious implications—especially considering the US is one of Australia’s major trading partners.
So, what’s going on?
These new tariffs are a bit of a mixed bag—deflationary for global trade, but inflationary within the US, especially as imported goods get more expensive. Soft data indicators (like business confidence and consumer sentiment) are also weakening, pointing to possible recession risks. Markets still appear to be pricing in a mild slowdown, but that could change if indicators worsen.
In short? The US economy is under pressure. And when America sneezes, the rest of the world often catches a cold.
China, meanwhile, has responded to its own set of economic challenges with another round of stimulus. We're talking:
These measures are designed to revive a sluggish economy hit hard by two big issues:
China’s factory activity dropped sharply in April, showing its fastest pace of contraction in over a year. That’s partly due to the frontloading of export orders—businesses were rushing to ship goods before the US tariffs kicked in.
Despite this, market sentiment has improved thanks to renewed US-China trade talks. There’s cautious optimism, but some red flags remain:
So, while markets are cheering the headlines, the underlying fundamentals remain fragile. This uncertainty affects everything from supply chains to commodity prices... and yes, that includes Australia.
Closer to home, things have been a little more predictable—at least in political terms. The federal election came and went without much market disruption. Now, all eyes are on the next GDP report, expected to confirm what most of us already feel: the economy is sluggish.
Here’s what we know:
While we're not in recession territory, it’s clear that market-wide earnings growth is slowing, and expectations for the rest of 2025 (and possibly into 2026) are being downgraded.
Within the Australian share market, company management teams have noticeably softened their tone. That’s usually a signal to prepare for flat or even declining growth in some sectors.
In a nutshell: uncertainty is the only certainty right now.
If you're a business owner, investor, or planning your next big move, now’s a good time to reassess your strategy and make sure you’re not flying blind.
This is a moment to stay informed, stay flexible, and stay supported.
When global headlines are full of contradictions, having the right advice can make all the difference. At Trekk Advisory, we help clients cut through the noise and make informed decisions—whether you’re managing investments, running a business, or planning for the future.
If you’ve got questions about:
Contact Trekk Advisory today. Let’s talk about where you are, where you're going, and how we can help you get there—no jargon, no fluff, just real advice.