What Happened?
Shares of medical supply and logistics company Owens & Minor (NYSE: OMI) fell 3.2% in the morning session after continued pressure from the previous week's announcement of potential new U.S. tariffs on Canada.
The negative sentiment follows news from late last week that the U.S. administration was considering a significant 35% tariff on Canadian imports, sparking fears of a broader trade dispute. The healthcare sector is seen as particularly vulnerable to such tensions because of its deeply integrated supply chains with Canada for various medical devices and products. For a medical supply and logistics company like Owens & Minor, the prospect of new tariffs raises concerns about increased operational costs and potential disruptions. This uncertainty is weighing on investor sentiment, as a trade war could pressure profit margins for companies reliant on cross-border trade for their supplies and distribution networks. The stock's move reflects broader market anxiety about the economic impact of protectionist trade policies.
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What Is The Market Telling Us
Owens & Minor’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 3% on the news that the U.S. administration announced a sharp escalation in trade tensions by threatening new tariffs on Canada. The wider market sentiment turned negative after the White House announced plans to impose a 35% tariff on Canadian imports, sparking renewed fears of a trade war. This news prompted a sell-off across major U.S. indexes, including the S&P 500 and the Dow Jones Industrial Average, as investors grew concerned about the potential economic impact of escalating protectionist policies. The healthcare sector is especially vulnerable to such tensions due to its deeply integrated supply chains with Canada for pharmaceuticals and medical devices, meaning increased costs and potential disruptions. Additionally, ongoing U.S. policy headwinds aimed at lowering drug prices and specific corporate challenges, like those faced by UnitedHealth Group, further compounded the sector's decline. As a result, the Health Care SPDR ETF (XLV) fell 1.0%, underperforming even as major indices pared some losses.
Owens & Minor is down 38.8% since the beginning of the year, and at $7.86 per share, it is trading 52.3% below its 52-week high of $16.48 from July 2024. Investors who bought $1,000 worth of Owens & Minor’s shares 5 years ago would now be looking at an investment worth $1,026.
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