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Morning Research Notes - 10.02.25
US markets ended mixed on Friday as investors grappled with higher-than-expected jobless claims, Alphabet’s elevated capex outlook, and President Trump’s tariff warnings. Commodities performed well: Gold increased by 0.2% to $US2,861.07 an ounce, Brent oil rose by 0.5% to $US74.66 a barrel, and Iron ore saw a slight increase of 0.2% to $US106.10 a tonne.
Wall Street closed mixed on Friday, with the S&P 500 rising 0.3% and the Nasdaq gaining 0.5%, while the Dow Jones Industrial Average fell by 125 points (0.30%). Investors navigated a volatile session marked by corporate earnings and economic data ahead of the crucial monthly jobs report. Jobless claims rose to 219,000, higher than the expected 214,000, indicating a cooling labour market. Alphabet’s capex outlook for 2025 exceeded Wall Street estimates, causing a slight slump in its stock price. Additionally, President Trump’s warning of higher tariffs on imported goods stoked fears of a global trade war, further curbing risk sentiment. The University of Michigan’s consumer sentiment gauge fell unexpectedly, with inflation expectations jumping to 4.3%. Nonfarm payrolls rose by 143,000 in January, missing forecasts and adding to inflation worries as average hourly earnings increased by 0.5%.
The Australian stock market closed lower on Friday, with the ASX 200 falling by 0.11%. Major sectors such as Materials, Financials, and Information Technology closed higher, gaining 0.29%, 0.05%, and 0.53% respectively. Healthcare and Utilities ended the day in the red, falling by 1.03% and 0.87%. The commodities sector had a bullish run, with Aluminium, Copper, Zinc, and Nickel all closing in the green on Friday.
Chart of the day
As global inflationary pressures have eased, most central banks have begun to reduce rates in order to support economic growth. However, developed markets like Australia and Japan have maintained their policy stance due to unique challenges - Australia’s overinflated housing market and Japan’s deflationary demographics. In contrast, emerging markets like Argentina have seen significant fiscal policy shifts, with President Javier Milei’s administration reducing annual inflation from around 250% to 166%, allowing the central bank to cut its policy rate.
Source: MacroBond
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