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U.S. stocks tumble on strong labour market data

ASR Team

Self-directed investors have relied on Australian Stock Report for over 20 years to provide them with comments on the Australian stock market and useful insights. We provide Australian investors with market news and research to make decisions that would help manage their savings, build a sustainable income, and potentially achieve capital growth.

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Morning Research Notes - 13.01.25

 

Wall Street took a sharp dive on Friday as stronger-than-expected labour market data stoked fears that the Federal Reserve might hold off on cutting interest rates, causing significant declines across major indexes and various sectors. Major commodities had a bullish run on Friday: Spot gold closed up 0.3% to $US2,671.00 per ounce, Iron Ore ended the day 1% higher to close at $US98.3 per tonne, and Brent Crude rose by 1.2% to $US77.08 a barrel.

On Friday, U.S. stocks took a significant hit after December’s labour market data exceeded expectations, fuelling concerns that the Federal Reserve may temper interest rate cuts in the rest of 2025. The S&P 500 dropped 1.5%, while the Dow Jones Industrial Average and Nasdaq Composite each fell 1.6%, marking the second consecutive week of losses. The nonfarm payrolls report revealed 256,000 new jobs, far surpassing the 155,000 forecast, as the unemployment rate dipped to 4.1%. This robust job growth heightened worries about persistent inflationary pressures. Mega-cap tech stocks, including Nvidia, Apple, and Microsoft saw declines, with property insurers and California power utilities also suffering due to rising wildfire damage estimates.

The Australian market closed lower on Friday, with the ASX200 falling by 0.42%. Major sectors saw losses: Financials (-1.17%), Info Tech (-0.21%), Healthcare (-0.71%), and Utilities (-0.25%) all ended the day in the red. Conversely, Materials closed up, rising 0.96%. Major commodities ended the day in the green: Aluminium, Copper, Zinc, and Nickel all saw gains.

 

Chart of the day

 

In recent years, healthcare businesses have come under heightened pressure, dampening their financial performance. In 2022, provider organisations were the first to see their EBITDA performance hit hard. Payers were initially sheltered, but 2023 brought increased hurdles. The pharmacy services sector experienced mixed outcomes: some organisations thrived due to pharmaceutical innovation and new delivery models, while others struggled with intensified regulatory scrutiny. In contrast, the healthcare services and technology segment has steadily grown, driven by demand for data, analytics, and software.

 

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​​Source: McKinsey




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