Is the Magnificent Rally Really Over? 05 March 2025
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Market Mood
Financial markets eagerly await the U.S. monthly jobs report for insights into labor market strength amid economic uncertainty. While January's payroll growth fell short of expectations, upward revisions for December and November suggest resilience. The unemployment rate declined to 4.0%, with wage growth rising to 4.1%, supporting the Fed’s cautious approach to interest rate cuts. However, concerns persist as PMI and consumer confidence surveys signal a weakening service sector, with businesses citing uncertainty over trade policies, tariffs, and budget cuts. The potential impact of government layoffs on private sector confidence remains a key issue. Globally, markets are monitoring PMI data for economic shifts, particularly in manufacturing and services, which could influence central bank policies, including the ECB’s anticipated rate cut pending CPI data. Investors and policymakers will closely scrutinize labor market trends for economic guidance in the months ahead.