Just when it seemed Australia had dodged a bullet with only a 10% tariff, Trump has unleashed a shock 200% tariff proposal on all imported pharmaceuticals.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
With nearly $2.5 billion worth of Aussie medicines heading to the U.S. each year, investors are rattled, and it raises far bigger questions: What could happen to Australian pharmaceutical companies, and how will Trump’s tariff affect the price of drugs here?
Whilst a one-year transition period has been flagged, it’s done little to ease nerves. However, chaos often creates opportunity, and this could be your chance to turn Trump’s pharma tariff into an investing windfall.
CSL is front and centre in this story. With a market cap of $118 billion and nearly 350 plasma centres in the U.S., it’s a world-class business facing a short-term political headwind. About 40 per cent of its pharmaceutical revenue comes from the U.S.
That said, around 85 per cent of CSL’s U.S. business is entirely domestic, insulating it from the worst impacts.
Technically, $240 is a major support level, and a break below this level could open the door to $180, but if it can hold at $240, a move up to $312 is highly likely.
Telix Pharmaceuticals (ASX: TLX) might be in an even stronger position. Its Gozellix imaging agent just secured U.S. reimbursement approval, and after a healthy 30% pullback, momentum and fundamentals are starting to align again. A retest of its $32 high is now back on the cards.
So, while Trump’s tariff threat may or may not sting at the pharmacy counter, it could be your ticket to profit in the markets.
Keep CSL and Telix on your radar; when healthcare moves, it moves fast.
What were the best and worst-performing sectors this week?
The best-performing sectors include Utilities, up over 3% followed by Communication and Financials, both up over 0.5%. The worst performing include Real Estate and Consumer Staples, both down over 1.5%, followed by Materials, down 1%.
The best performing stocks in the ASX 100 include Origin Energy, up over 7%, followed by IGO Limited, up over 6%, and Orora Limited, up over 5%. The worst-performing stocks include Northern Star Resources and A2 Milk, both down over 9%, followed by Reece Limited, down over 7%.
What’s next for the Australian stock market?
The All Ordinaries Index is teasing investors again. This week, it came close to breaking its all-time high, only to slip back just under 0.5% as of Thursday’s close.
Right now, there’s a heavy cloud of uncertainty hanging over the market, and it all comes back to the chaos of global trade. Tariffs are being thrown around like confetti as they are announced one day, delayed the next day and then changed the day after leaving investors without a clear path forward.
The materials sector took a beating this week, dragging the index lower, while staples and real estate stocks also struggled to find their feet. As if that wasn’t enough, the RBA decided to keep rates on hold, waiting for more inflation data before making any bold moves. With all the noise coming out of Trump’s tariff threats, the central bank is clearly choosing to keep its powder dry for now.
But here’s where it gets interesting: The market is in a holding pattern, consolidating just under its record highs.
From experience, this kind of quiet sideways action is often the calm before the storm, with the market resetting itself before its next big move.
Also, we’re still seeing plenty of dip buying, which shows there’s strong demand beneath the surface. But the million-dollar question is who’s buying?
Is it the institutions getting positioned early for the breakout, or is it just retail traders chasing momentum at the top?
Historically, July is a powerful month for the All Ords. But so far, it’s been underwhelming. That could all change fast. A clean break above the all-time high at 8,882 could light a fire under the market, triggering a new wave of buying and sending prices soaring. On the flip side, if it falls below 8,600, we could see a sharper drop towards 8,300.
Right now, the market is coiled like a spring. Whether it explodes upwards or unravels down, one thing is clear: The next move is going to be big.
Join the discussion: See what’s trending right now on Australia’s largest stock forum and be part of the conversations that move the markets.
Disclaimer: While Wealth Within holds an Australian Financial Services License (AFSL:226347), the information featured in this program is general in nature and therefore should not be relied upon. Before making any investment decisions, you should consult a licensed professional who can advise whether your investment decisions are appropriate for you.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
This article is being disseminated on behalf of Wealth Within, a third-party issuer, and is intended for informational purposes only.