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Wall Street falls as Walmart warning fuels economic jitters

Tim Montague-Jones

Tim Montague-Jones has over 20 year investment management experience working in the financial markets. Previous experience includes a ten year stint at Morningstar as a Senior Equity Analyst/Portfolio Manager, founding the Morningstar Growth Portfolio and a founding member of their Investment Committee. Tim was also a Senior Equity Analyst for Macquarie Group and a member of the winning team to obtain the 2016 LONSEC Fund Manager of the Year award.

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Morning Research Notes - 21.02.25

 

US markets closed lower yesterday, driven by Walmart’s disappointing sales outlook and hawkish Fed comments suggesting rate cuts will remain on hold for longer. Major commodities experienced a bullish run on Thursday: Gold rose by 0.1% to $US2,931 an ounce, Brent oil increased by 0.3% to $US76.05 a barrel and Iron ore gained 0.1% to close at $US106.85 a tonne.

Wall Street closed lower on Thursday, with the S&P 500 down 0.4%, the Nasdaq falling 0.5% and the Dow Jones dropping 450 points (1%). The decline was primarily driven by Walmart’s disappointing sales outlook, which raised concerns over consumer strength and economic stability. This outlook impacted other retailers like Target and Costco, which also traded in the red. Additionally, comments from Federal Reserve officials suggested that rate cuts would remain on hold until inflation targets are met, adding to market uncertainty. 

The Australian stock market closed lower on Thursday, with the ASX 200 declining by 1.16%. Major sectors such as Materials, Financials, Information Technology, Healthcare, and Utilities all ended the day in the red. In contrast, the commodities sector saw a bullish performance, with Aluminium, Copper, and Zinc closing in the green, rising by 1.82%, 1.48%, and 0.53% respectively. However, Nickel closed slightly down, falling by 0.03%.

 

Chart of the day

 

The European pharmaceutical sector may considered attractive given its strong growth prospects, compelling valuations and potential as a safe haven amid global uncertainty. The sector’s absolute price-to-earnings (P/E) ratio is near its 10-year lows, aligning with the broader European equity market. Despite this, the pharmaceutical sector has a stronger earnings per share (EPS) growth outlook, with forecasts predicting a 12% increase compared to the market’s 8%.

 

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​​Source: Bloomberg




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