The laggards

Commonwealth Bank shares shed 1.4 per cent, while NAB shares dipped by 0.2 per cent after the Australian Securities and Investments Commission took NAB to court alleging breaches of financial hardship obligations.

The healthcare sector suffered the most, down 0.9 per cent, as shares in CSL declined 1.7 per cent to a six-month low over fears that the appointment of avowed sceptic Robert F. Kennedy Jr to lead the US Health Department could hurt the prospects of healthcare stocks. However, sleep apnoea device maker Resmed’s shares pushed up 1.6 per cent.

Shares in Resolute Mining fell 5.5 per cent, after the company agreed to pay $247 million to the Mali government to secure a long-term mining deal and resolve a tax dispute in the west African country.

In an ASX announcement, Resolute confirmed it was working with the Mali government to progress the release of three employees, including chief executive Terry Holohan, who have been detained in connection with their operations in the country.

The lowdown

The Australian sharemarket is awaiting the release of minutes from the RBA’s most recent monetary policy meeting which will be made available on Tuesday.

Loading

EToro market analyst Josh Gilbert said that with hopes of a rate cut now slipping away for the first quarter of 2025, the minutes should indicate some of the RBA’s benchmarks for loosening policy.

“With inflation still persistent in Australia, the RBA will likely face higher scrutiny from both the public and parliament following the January inauguration of Donald Trump’s presidency in the US,” he said.

“Trump has signalled a wide array of ambitious monetary policies, particularly the formation of a US bitcoin reserve, and has also signalled a desire to erode the independence of the US Federal Reserve.

Loading

“Should these moves go ahead, the immediate ripple effect could encourage similar policy positions here. There is also the risk that some of Trump’s more brazen policies and appointments could lead to accelerated inflation in the US, which in turn could affect Australian monetary policy.”

Last week, US stocks tumbled as the “Trump bump” that Wall Street received as a result of the presidential election kept receding.

To end a losing week, the S&P 500 dropped 1.3 per cent for its worst day since before the election. The Dow Jones fell 305 points, or 0.7 per cent, and the Nasdaq composite sank 2.2 per cent.

Biotech stocks broadly sank to some of the market’s worst losses, but the sharpest drop in the S&P 500 came from Applied Materials. It fell 9.2 per cent even though it reported a stronger profit for the latest quarter than analysts expected.

The provider of manufacturing equipment and services to the semiconductor industry gave a forecast range for upcoming revenue whose midpoint was short of analysts’ expectations.

Loading

The pressure is on US companies to deliver big growth, in part because their stock prices have been rising so much faster than their earnings. That’s made the broad stock market look more expensive by a range of measures, which has critics calling for at least a fade. The S&P 500 is still up 23 per cent for the year and not far from its all-time high set last Monday, despite this past week’s weakness.

Stocks had been broadly roaring since US election day, when Donald Trump’s victory sent a jolt through financial markets worldwide. Investors immediately began sending up stocks of banks, smaller US companies and cryptocurrencies as they laid bets on the winners coming out of Trump’s preference for higher tariffs, lower tax rates and lighter regulation.

But investors are also taking into account some of the potential downsides from Trump’s return to the White House.

Treasury yields have been climbing on both the economy’s surprising resilience and worries that Trump’s policies could spur bigger US government deficits and faster inflation.

That’s forced traders to recalibrate how much relief the Federal Reserve could provide for the economy next year through cuts to interest rates. The Fed earlier this month lowered its main interest rate for the second time this year, and past forecasts indicated Fed officials saw more cuts as likely in 2025.

Lower interest rates can act as fuel for the economy and stock market, but they can also put upward pressure on inflation.

Tweet of the day

Quote of the day

“Now we know the direction of travel is towards digital, but we want to make sure that cash is available in communities, and that people can pay for essentials with cash if they want to and if they need to.”

That’s Treasurer Jim Chalmers speaking about the federal government’s new mandate which will force businesses across Australia to accept cash from customers buying essential items such as fuel and groceries.

You may have missed

Power and gas giant Origin Energy’s boss has warned Australia is under-prepared as it drifts closer towards a decade of extraordinary upheaval for the electricity grid when all remaining coal-fired generators are expected to close.

While coal has been Australia’s main electricity source for decades, its years of powering the grid are numbered as utilities face spiralling costs to maintain ageing power stations and intense competition from cleaner and cheaper renewables.

With AP

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.