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Morning Research Notes - 04.03.25
US markets closed in the red yesterday as renewed trade war fears and weak economic data drove market sentiment. Major commodities experienced mixed movements on Monday: Gold rose by 0.0% to $US2,892.03 an ounce. Contrastingly, Brent oil fell by 1.9% to $US71.43 a barrel, and iron ore dropped by 2.2% to close at $US100.15 a tonne.
Wall Street closed sharply lower on Monday, driven by renewed fears of a global trade war after President Donald Trump confirmed tariffs on Mexico and Canada would begin on Tuesday, while also signing an order to increase tariffs on China. The Dow Jones Industrial Average fell 648 points (1.5%), the S&P 500 dropped 2% and the Nasdaq Composite declined 2.6%. The market was also influenced by weak manufacturing data, with the ISM PMI showing marginal expansion and concerns over economic growth, as the Atlanta Fed’s GDPNow estimate predicted a 2.8% contraction in the first quarter.
The Australian stock market notched gains yesterday, with the ASX 200 rising by 0.89%. Major sectors such as Materials, Financials, Information Technology, Healthcare, and Utilities all closed in the green. However, the commodities sector had a bearish day, with Aluminium, Copper, Zinc, and Nickel falling by 0.66%, 0.55%, 1.2%, and 1.18% respectively.
Chart of the day
This year, technology stocks from Canada, Colombia, Mexico, Europe, and China are outperforming the S&P 500, while the U.S. dollar is down, and the Magnificent Seven big tech companies have become laggards. This shift, driven by various factors such as prospects for peace in Ukraine, potential stimulus in Germany, a pro-business shift in China, affordable artificial intelligence, and a slowing U.S. economy, suggests a significant market rotation. It remains to be seen whether this is a typical bull-market leadership change or a sign of deeper issues ahead.
Source: Wall Street Journal
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