SVET Markets Weekly Update  – May 26th – June 1st 2025

On Week 17, the S&P 500 gained 4%, the Nasdaq 6%, and the Dow 2% on tariffs optimism and peace talks. Crypto markets corrected a bit after explosive growth during the previous week.

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Monday
On Monday, stocks are in deep red, continuing volatility as traders waver in their future predictions due to the swings in the White House, which is now trying to fire Jerome Powell. Treasuries continue to fall as investors exit American equities. Gold reached a new ATH. The dollar is down, with the euro hitting a 3.5-year high. BTC made a breakout attempt, aiming to reach $90K; the dollar’s growing weakness may explain this.

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Tuesday

On Tuesday, stocks are up following Scott Bessent’s comment about the trade war ‘de-escalation,’ which is adding to the market’s volatility. Meanwhile, manufacturing activity is at a 6-month low, with shipments and new orders plummeting. The IMF cut its global economic growth estimate to 2.8% from 3.3% and to 1.8% from 2.7% for the US. Europe’s consumer confidence has dropped to its lowest level in 1.5 years. Oil prices are up, while gold has corrected sharply. The crypto market surged after equities, with BTC breaking through the 90K resistance and ETH moving to 1.7K.

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Wednesday

On Wednesday, stocks rose, boosted by easing China trade tensions and Trump’s assurance that he wouldn’t remove Powell. However, gains moderated as doubts emerged over a near-term trade resolution as Bessent noted no unilateral tariff cuts were proposed, cooling optimism. Tesla jumped 5.4% as Musk pledged to focus on his companies. Meanwhile, the Services PMI dropped in April, missing forecasts. The World Bank cut India’s 2025–26 growth forecast to 6.3% amid global uncertainty. Oil prices slid below $62, as OPEC+ supply hike fears grew. Gold fell below $3,280 after a record high. The 10-year Treasury yield dipped to 4.31% as Trump’s Powell comments eased Fed independence concerns. The crypto market is mixed with BTC sliding below 93K.

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Thursday

On Thursday, equities are in green amid the spectacle of China tariff negotiations, while manufacturing orders surged for commercial aircraft, though the national activity index fell along with existing home sales. China plans to issue bonds to cushion the economy against trade tensions. Meanwhile, the CCP, faced with a slowing GDP growth, has reduced the number of restricted industries for foreigners from 117 to 106, liberalizing sectors such as TV production, telecommunications, and forest seed imports. Gold is up, as more traders are moving into it in anticipation of further growth amidst the ongoing trade war. BTC and the rest of the crypto market have paused, preparing for a correction after explosive growth over the past two days.

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Friday

On Friday, stocks rose for the fourth straight session, lifted by Big Tech, though trade tensions lingered after Trump proposed 50% tariffs. China’s tariff exemptions on some US goods boosted optimism, but Beijing denied ongoing talks. Alphabet rose on strong earnings and a $70B buyback, while Tesla surged on new self-driving rules. Intel dropped on weak guidance. Oil inched up to $83/barrel but fell over 1% weekly on oversupply worries and trade uncertainty. Ukraine peace talks showed progress but lacked final terms. Crypto lingers around previous day’s levels.

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On Week 8, markets will watch trade talks and earnings from Apple, Microsoft, Amazon, and Meta. Key data includes Q1 GDP, jobs, and inflation. Eurozone GDP, Japan’s rate decision, China’s PMI, and Australia’s inflation will also be in focus.

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SVET Markets Weekly Update (April 14–18, 2025)

On Week 16, stocks went red as gold skyrocketed and the dollar fell, as the new White House Administration continued to teach the world its unconventional ‘art of the deal’.

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Monday

On Monday markets were mixed as Trump reconsidered the tariff for electronics and consumers’ inflation expectations jumped to 3.6% from 3.1% — the highest in 2 years — while prices for food and rent increased and gas costs decreased.

World’s Markets:

• European, South American, and Asian equities are in the green due to the delay on tariffs.
• China’s trade surplus soared to $103B from $58B as exporters rushed to ship goods ahead of tariffs.

Commodities and Currencies:

• Oil prices continued to be under pressure as Iran nuclear talks progressed, opening the gates for more oil to hit the market if sanctions are lifted.
• The dollar index remains at a 3-year low as dollar-nominated assets went on sale, thanks to the White House’s ‘pro-domestic-manufacturing’ economic policies.

Crypto:

• The crypto markets are mostly in the green due to technical factors, as hopeful traders continued to buy the dip. This is further supported by the weakness of the dollar, prompting some investors to bet on BTC growth.

The State Of Markets: In the green, mostly, markets continue to swing as Trump teaches the world his ‘art of the deal”.

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Tuesday

On Tuesday, stocks fell while manufacturing contraction slowed down. Boeing experienced a decline due to a pause in deliveries to China. European industrial production rose for the first time in 22 months, driven by energy and non-durable consumer goods, while economic sentiment dropped to its lowest level since December 2022. This is an indication of counterproductive geopolitics taking precedence over economics, threatening to undermine an overall strong industrial revival. The crypto market is mixed as BTC lingers under major resistance at $85K-$86K; breaking through this level might spark new bullish hopes.

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Wednesday

On Wednesday, stocks went red after Powell remarked on the risks of increased inflation and slow growth. Meanwhile, monthly retail sales jumped as consumers loaded up on purchases ahead of tariffs, and the drop in industrial production exceeded expectations as capacity utilization dipped below its long-run (1972–2024) level.

World’s Markets:

• The European core inflation rate fell to its lowest level since October 2021. China industrial production increased.

Commodities and Currencies:

• Gold set a new all-time record at $3,340, increasing by over 40% over the year due to active buying from the world’s central banks as the dollar continued to unravel because of the unprecedented economic policies of the new White House administration. Oil prices rose on Iranian sanctions.

Crypto:

• The crypto market lingers, with BTC still staying below its important resistance level at $85K. BTC is now undergoing a critical test as the world’s safe-haven asset as investors continue to sell both the dollar and Treasuries.

The State Of Markets: In the red, for the most part, as gold jumps to a new ATH and the dollar continues to devalue while Trump pushes forward with his unorthodox policies.

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Thursday

On Thursday, stocks were mixed as manufacturing plunged far beyond expectations while housing starts decreased the most in a year. Adding to investors’ confusion were Trump’s comments on ‘big progress’ in trade talks with Japan and China, as well as his criticism of Powell, including calls for rate cuts.

World’s Markets:

• The ECB cut its rate to 2.25 from 2.5, citing lower inflation and acknowledging weaker growth prospects. Producer prices in Germany dropped the steepest since December 2023, led by energy — indicative of an economic slowdown — while consumer goods continued to increase.

Commodities and Currencies:

• Oil jumped on Iranian sanctions. Gold eased as traders took profits.

Crypto:

• The crypto market continues to consolidate, with BTC probing $85K.

The State Of Markets: Mixed, the world’s markets remained confused as Trump threw more ‘explosives’ of the trade war at them while targeting Powell.

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Friday

On Friday, the main markets were closed for holidays.

World’s Markets:

• China’s FDI fell 10.8% to $36.9B in Q1 2025 after a record 27.1% drop in 2024, hurt by weak foreign confidence, deflation risks, and US tariff threats. However, potential tech sector easing and stimulus may revive inflows later.
• Japan’s Nikkei rose on trade deal hopes. March inflation cooled to 3.6%, while core rose to 3.2%. BOJ may hold rates at 0.5% next week. Meanwhile, Japan’s finance minister denied claims of deliberate yen weakening, stating Tokyo’s recent intervention supported the currency.
• Indonesia was set a 60-day deadline to negotiate a 32% tariff on Indonesian imports, covering trade, minerals, and supply chains. Indonesia will boost American oil, gas, and farm imports.

Crypto:

• Most cryptos were fluctuating near their yearly lows.

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On Week 17, tariff uncertainty and trade tensions will fuel market volatility. Investors will monitor earnings from major firms like Tesla, Boeing, and SAP. Global PMI data, home sales, and EU confidence gauges will be key. China’s PBoC is expected to hold rates steady.

Comment: What’s Up With Politics?

The previous White House administration was an embodiment of what is wrong with the left wing of the political spectrum — a policy of ‘too little, too late.’ Aging government bureaucrats, led by a ‘leader’ who was literally decomposing before our eyes, proved to be incapable of meeting the demands of the new age of unhinged tech. The new administration, although packed with ‘young and hungry’ individuals, is essentially also led by older folks who have tried to gain — and then cling to — power by shifting from ‘not moving at all’ to ‘crazy fast.’ However, the results they have achieved so far are close to catastrophic. Still, the desperate public and their elected representatives are willing to give them all the time in the world they need to destroy everything. It seems that Churchill’s 1942 saying, ‘You can always count on Americans to do the right thing — after they’ve tried everything else,’ remains true 83 years later.

Evernomics — Digital Wealth Growth Intellectual Contracts Platform — is your way to invest into your bright future without hassle.

For more on Evernomics: 

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SVET Markets Weekly Update (March 31 — April 4, 2025)

On Week 14, Trump’s imposition of tariffs on over 200 countries, crushing all markets by 10–15%, sent shockwaves that were, unquestionably, historical. On the other hand, the ability of BTC and other cryptocurrencies to withstand that blow was absolutely unprecedented.

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Monday

On Monday, equities rebounded on technicals amid growing uncertainty surrounding the scale and scope of the April 2 tariffs, despite the Texas manufacturing activity index dropping to levels seen in July 2024, primarily due to a drastically deteriorating outlook. It was also noted that the Chicago business barometer showed economic contraction for the 16th consecutive month, though at the slowest pace since November 2023.

World’s Markets:

• Major European market indexes tumbled to a two-month low amid expectations of reciprocal tariffs that could target ‘all countries.’ Meanwhile, Italian consumer price inflation accelerated to its highest level in 18 months, while German inflation slowed to 2.2% (a six-month low).
• Brazilian stocks fell, led by the mining sector, due to forthcoming tariffs and subdued GDP forecasts.
• Japan’s bond yields declined as investors sought safe-haven assets.
• China’s factory activity reached a one-year high, suggesting the effectiveness of Beijing’s stimulus measures.

Commodities and Currencies:

• Gold reached a new all-time high after Trump signaled broader tariffs starting April 2, while silver aimed for a 13-year high. Oil jumped in response to a 50% sanctions-tariffs threat. Tin soared to a three-year high following an earthquake in Myanmar (the 3rd-largest tin producer), which could cause delays in restarting production in Wa State (70% of the country’s tin output).

Crypto:

• BTC, ETH, and SOL are all in the red, continuing to remain in a bearish trend.

The State Of Markets: Mixed, American equities rebounded on technicals, while the rest of the world’s stock indexes were in deep red on expectations of the April 2 tariffs.

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Comment: Apocalypse Simplified.

So, what we have as the WH’s “official economic policy” is, as I have already mentioned, the “new mercantilism” or “magantilism”. Basically, it means that previously held economic concepts — 2010s-2020s new-Keynesian — go out the window together with their predecessors — 1980s-2010s Libertarian (or new-Classical, Monetarists), 1950s-1980s Keynesian, and 1930s-1950s Government Led Economy (Planned Economy, Socialism, War-Time Capitalism).

In fact (and in accordance with Generational theory), we are getting back ~100 years to the start of the 20th century, when the First World War began with several “great” imperial powers fighting for prevalence in international markets and grabbing new colonies to ensure an uninterrupted flow of natural resources to their “strategically important” (“patriotic”) manufacturers.

I do not think that the majority of Americans were just “stupid” when they voted the present Administration into the White House 3 months ago. Not at all. I believe that these changes are fundamental, that “maganomics” will continue and will prevail, supported by disillusioned, disenfranchised, and marginalized voters due to unprecedented income and social divides, despite falling markets, abused allies, and growing outcry from the left of the political spectrum. Moreover, these changes will lead in a few years to an absolutely new geopolitical and economic situation.

Let’s start with the long term. We can see that the White House is pushing world leaders to take a stance on whether they are for, against, or “non-aligned” with America. The first kind will be subordinated and given some small economic preferences. The second kind will be severely ostracized and militarily threatened even if it leads to the point of an open military conflict. Among all of those mounting military threats, third-kind countries will be simply forced into submission to one or the other side.

Let’s now look at the medium term (3–5 years). Obviously, it would be a period of stage-by-stage growing worldwide divides, worsening international relations, and, consequently, intensifying trade wars accompanied by the return of government regulations (for most G20 countries) of major sectors of the economy, especially those traditionally associated with strategic resources (including cheap food and lodging to support the poorest strata of the population — the base of the new political regime) and military. All the rest of the economy, first of all, SMEs, will be left alone (hopefully), forced to survive facing growing competitive pressure from politically-wired visionary geniuses.

So the short term — basically, “detox” out of 30–50% of people’s 401k because of the corresponding fall of major stock indexes — looks very gloomy for perma-bulls. However, traditional portfolio management strategies — that of going into safety — gold — might work better than the rest, including holding Treasuries or cash, because as we all know “detox” includes getting the USD weaker and Treasuries more expensive and less yield-bearing.

What to do in the medium term? It looks a little less dark. First of all, the local economy will start to adapt to new prohibitive trade regimes, which will be complemented by government support for key industries to alleviate the effects of falling international and domestic sales, as well as the rise of new industries like military, AI, and crypto (mostly as a result of deregulation and the poorest educated middle-class desperately looking for new sources of income).

Now, long-term portfolio management will include exiting from “risky” assets, repositioning into “strategic,” government-supported industries (military, energy, food), and of course, again growing your gold (and possibly, depending on prohibitive legislation, BTC).

So, overall, our proposed portfolio strategy to navigate the next years can be presented as Out-In-Out.

Please note that the above is not investment advice. Moreover, the future is unpredictable by definition. So this portfolio strategy is purely speculative. It can be completely changed by myself in the future as the real situation on the ground evolves.

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Tuesday

On Tuesday, stock indexes are mostly in the red ahead of the April 2nd self-inflicted tariffs. Factory activity contracted for the first time in 3 months, while prices soared to their highest levels in 3 years. Additionally, there was the sharpest deterioration of business conditions in 2 years, alongside a drop in job openings.

World’s Markets:

• European inflation eased to 2.2%, with a notable drop in energy prices, while food prices surged. At the same time, unemployment continued to fall to 6.1%, with the lowest level reached in Germany (3.5%) and the highest in Spain (10.4%). Meanwhile, the EU manufacturing sector has been improving for the past four months but still remains in contraction territory.
• Spanish manufacturing fell to yearly lows (49.5) due to new orders as factory owners reduced their inventories in anticipation of lower sales ahead of the tariffs.
• The situation in the manufacturing sector is even more severe in Italy, where production has continued to decline for 12 straight months.
• France is in a slightly better position, supported by purchases from Africa and Asia; however, its production sector has also been in contraction for the past two years.
• German producers are similarly stuck in a two-year downturn, although their situation is slowly improving as well.
• Brazilian manufacturing continued to expand, albeit at a slower pace, as higher interest rates eased demand.
• China’s manufacturing rose to its highest level since November, with foreign sales growing the most in 11 months.

Commodities and Currencies:

• Gold climbed to a new record of 3130 before easing on profit-taking, marking its best quarterly performance in 40 years (since 1986).

Crypto:

• BTC, ETH, and SOL increased amid general confusion in the markets prior to the April 2 tariff disaster, which is expected to exceed the scope of the 1930 Smoot-Hawley tariffs that halved the country’s exports, led to multiple bank insolvencies, and essentially started the Great Depression.

The State Of Markets: Mixed, the world’s markets lack direction ahead of the April 2 tariffs announcement. Some traders are ‘buying the news,’ while most investors continue to de-risk in anticipation of a worldwide recession.

Details

• FYI: The Smoot-Hawley Tariff Act of 1930 was a U.S. federal law that significantly raised import duties on a wide range of goods. The primary goal was to protect American farmers and industries from foreign competition during the early stages of the Great Depression. It was sponsored by Senator Reed Smoot and Representative Willis Hawley. The act was signed into law by President Herbert Hoover on June 17, 1930. Despite widespread opposition from economists who warned of its potential negative consequences, the bill passed. It dramatically increased tariffs on thousands of imported goods. Other countries retaliated by imposing their own tariffs on American goods, leading to a significant decline in international trade.While it didn’t cause the Great Depression, the Smoot-Hawley Tariff Act is widely believed to have worsened its severity. The most significant impact was the sharp decline in international trade. Estimating the exact USD loss is difficult due to the complexity of the global economy at the time. However, it is known that U.S. exports fell from roughly 7B USD in 1929, to roughly 2.5B USD in 1932. This drastic drop shows the impact. Tariffs raised the prices of imported goods, making them less affordable for consumers. The decline in trade contributed to bank failures, particularly in agricultural regions. The act further strained the global economy, which was already struggling. The act was intended to protect domestic industries, and in the very short term, some industries may have seen temporary benefits. However, these were greatly outweighed by the negative consequences.
  

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Comment: What’s Wrong With DEMs?

Ils n’ont rien appris, ni rien oublié. This phrase is attributed to Charles Maurice de Talleyrand-Périgord, a French diplomat, in reference to the Bourbon Restoration after Napoleon’s fall. It critiques the returning Bourbon monarchy’s inability to adapt to the changes brought about by the French Revolution and Napoleonic era.

It’s fully applicable to DEMs in all the latest election cycles, including the recent one. If you listen to the explanation that DEM-leaning media are giving now for their catastrophic performance in the 2024 elections, you’ll hear that DEMs still think that everything they were doing was perfect — the only mistake they made was being unable to communicate their “achievements” to certain electoral groups.

As the Bourbons, DEMs have absolutely not recognized that their agenda, especially how they treat new independent, uncensored media and new sources of income (like cryptocurrencies), is simply out of date. Their approach to policing media and restricting access to blockchain, and generally their desire to put bureaucracy first, ahead of people — that is what put them down.

However, despite that being up in their face, DEMs once again demonstrate that “They have learned and forgotten nothing.” This adds to my certainty that “maganomics,” together with “magapolitics,” is here to stay for a very long time.

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Wednesday

On Wednesday, markets all over the world were volatile in anticipation of tariffs that were to be announced after the closing. Trump imposed a 10% universal tariff, along with additional levies on 60 nations, and 25% duties on auto imports. Many countries, including the EU and China, issued statements criticizing the tariffs as violations of trade rules, calling them an act of ‘bullying.’ The dollar index plunged, and oil also declined as markets became risk-averse following the higher-than-expected tariffs. Gold hit a new all-time-high while BTC, ETH, and SOL are in the red after fluctuating widely.

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Thursday

On Thursday, stocks saw their worst drop in over two years, with major indices plummeting. The S&P 500 experienced its biggest fall since 2020 — wiping out around $2 trillion in value. Investors were spooked by Trump’s tariffs, fearing global retaliation and economic damage. Tech stocks led the sell-off, with Apple, Nvidia and retailers Nike and Dollar Tree each falling about 10%. Despite the steep losses, trading remained orderly, though inflation and volatility concerns grew. With tariffs set to start April 5 and more expected, market uncertainty is likely to persist. BTC, ETH, and SOL also dipped but less sharply.

The State Of Markets: In red, the unprecedented tariff war launched by the White House on April 2 weighed heavily on stocks around the world.

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Comment: What’s Up With Tariffs?

Trump’s “reciprocal” tariffs are based on the country’s trade deficit divided by imports (which is essentially a measure of the proportion of imports that are not offset by exports in a bilateral trade relationship), rather than actual foreign tariffs (WTO).

The administration emphasized the trade deficit as a sign of unfair trade practices so the Trump administration’s approach considered the trade deficit as a key factor. This method reflects a focus on “reciprocity” as a way to reduce the trade deficit, rather than on matching actual foreign tariff rates.

Trade Deficits Are Not Inherently Bad:

• A trade deficit simply means a country imports more than it exports. It’s not necessarily a sign of unfair trade or economic weakness.
• Trade deficits can arise from various factors, including:
• Strong domestic demand for imports.
• Currency exchange rates.
• Differences in economic growth rates.
• Investment flows.
• A trade deficit is not a measure of how fair trade is.

Tariffs Distort Markets:

• Tariffs raise the price of imported goods, making them less competitive.
• This distorts market forces and leads to inefficiencies.
• Consumers pay higher prices, and businesses face increased costs.
• Tariffs can lead to retaliatory tariffs from other countries, harming exports.

Focus on Reciprocity vs. Efficiency:

• The “reciprocal” approach focuses on matching trade imbalances, not on maximizing economic efficiency.
• Economists generally advocate for free trade or trade based on comparative advantage, where countries specialize in producing goods they can make most efficiently.

Ignores Complexities of Global Supply Chains:

• Modern supply chains are highly complex, with goods often crossing borders multiple times.
• Tariffs can disrupt these supply chains, causing significant economic harm.

Focus on the trade deficit is misleading:

• The trade deficit only measures goods, and does not measure services.
  

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Friday

On Friday, the DOW, S&P, and Nasdaq all experienced a decline reminiscent of decades past; oil plunged to a three-year low, and gold dropped sharply as investors sold it to meet margin calls, while BTC and even ETH are not budging. It is unprecedented. Partially, this might be explained by the very high volatility of the USD and gold. This has prompted many traders to diversify into alternative asset groups. However, it might just be a short-term reaction, especially given that Powell explicitly warned the markets about inflation and stated that the Fed will react to Trump’s tariffs. Still, BTC being in the green while all the world indexes are in freefall (e.g., the entire Italian market dropped almost 8% in just one day) is a historic event.

The State Of Markets: Absolutely in the red, all the world’s markets and almost all major commodities are in deep decline, responding to an overnight revamp of the 80-year-old global trade system. Crypto has historically stood strong.

On Week 15, markets eye trade war fallout, inflation, and Fed minutes. Europe’s retail and industrial data, plus UK GDP, are due. China’s trade and India’s policy also loom.

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Comment: What’s Up With Tariffs? (2)

It would not be a stretch to say that in the past 200 years or so of capitalist market history, all of the accumulated economic experience and theoretical knowledge have taught us a lesson: that even if tariffs work, it’s only short-term, and the negatives massively outweigh the positives. Basically, a “trade war” is 90% the “war,” and only 10% is “trade.” Tariffs are highly disruptive and counterproductive, not only economically but also socially and politically. Bottom line, they should not be used as a tool in the contemporary, modern, open world’s economy at all.

The way it’s currently done by the White House is absolutely and even ridiculously grotesque. It signals the end of international trade as we have known it. Most economists estimate it costs between $2,000 and $5,000 per person per year. This includes both inflation and rising costs. That’s the price each individual will have to pay for a couple of thousand manufacturing jobs returning to the mainland, and also for some politicians feeling “secure” about “national economic security.”

However, all of that said, hasn’t everyone in crypto (myself included) been crying out for at least the past 10 years (pretty much since the advent of BTC on world’s economic scene) about how the current “new-Keynesian” economic paradigm, which is based on heavy bureaucratic regulation of all markets and increasingly less freedom for entrepreneurs and innovators, is unsustainable? Yes, we have been lamenting the new-Keynesian model, but only now has that model been challenged on practice.

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For more on Evernomics: 

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SVET Markets Weekly Update – March 17–21, 2025

On Week 12, major indexes corrected upward marginally after a month of decline, primarily due to technical overselling, along with the Fed holding rates unchanged and Powell suggesting that the inflationary influence of tariffs on the economy is “transitory.”

Monday

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On Monday, stocks continued Friday’s rebound, encouraged by an absence of negativity coming from the White House, despite the manufacturing index dropping to the lowest level in two years and the increasing pressure on the Fed due to input prices rising the fastest during that period, as well as rapidly declining business optimism and weak capital spending. The housing index plunged to a seven-month low, despite some relief on the regulatory side.

World’s Markets:

• The EU market is on the rise due to the momentum from peace talks.
• Brazilian economic activity has jumped to a seven-month high as the real continues to strengthen, attracting inflows due to high Selic rates. The local market index is up, driven by resource-heavy equities, as Chinese data points to the potential for increased demand.
• India registered the smallest imports in four years due to a drop in energy purchases. Local markets are up, boosted by pharma and finance, rising on Chinese news.
• China’s CCP announced a Special Action Plan to Boost Consumption, which includes measures to increase both household income and spending, as well as population growth. Consequently, the local stock market rose. Meanwhile, the local jobless rate hit a two-year high of 5.4%, and real estate investments dropped by 10%, while industrial output growth continues to slow down, primarily in manufacturing.

Commodities and Currencies:

• The dollar nears a five-month low in expectation of an economic slowdown. Gold hovers near all-time highs. Oil jumped on rising tensions in the Red Sea.

Crypto:

• BTC, ETH, SOL, ADA, and other coins are on the rise, following stocks.

The State Of Markets: In green, all markets are rising due to an absence of negativity that has traditionally emanated from the White House over the past two months.

Details

World Markets

• The OECD G20 growth forecast lowered to 3.1% from 3.3% (2025) and to 2.9% from 3.2% (2026), citing tariffs war. The local economy is expected: 2025 — to grow 2.2% vs. 2.4% (December estimate); 2026–1.6% vs. 2.1%. Canada: 2025 and 2026: 0.7% for both years (from 2%). Mexico: -1.3% (2025) and -0.6% (2026). Eurozone: +1.0% in 2025 (vs. +1.3%) and 1.2% in 2026 (vs. 1.5%), with downgrades for Germany, France, and Italy. UK: +1.4% in 2025 (vs. 1.7%) and 1.2% in 2026 (vs. 1.3%). China is expected to expand +4.8% this year (vs. 4.7%) before slowing to 4.4% in 2026.
  

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Comment: Economic Consequences of the MAGAntilism.

According to the OECD, the White House’s ‘tariff games’ have already cost the G20 a -0.2% growth in 2025, followed by -0.3% in 2026, which includes -0.2% for the American economy (with GDP growth cut from 2.2% to 1.9%). In dollar terms, this would result in a “red-ink” of USD -430B for the OECD, including USD -60B for America.

Essentially, Americans will pay the price of tariffs nearly equivalent to the Trump Official Coin market capitalization at its peak on January 20 (~USD 50B).

On the other hand, tariffs have played well into China’s hands, with the economy now expected to rise by +4.8% (up from 4.7% previously). Additionally, we see more second-and third-tier economies benefiting from a new redistribution of trade due to geopolitics and tariffs. For example, Indonesia’s exports of vegetable oil, iron, steel, and machinery have skyrocketed to a two-year high, with deliveries particularly increasing to the USA and China.

Therefore, we are doing remarkably well, aligning closely with my early forecasts of the economic consequences of the White House’s new policy of ‘MAGAntilism.’

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Tuesday

On Tuesday, equities are down due to technical volatility in response to mixed economic data, with increasing industrial production and soaring housing starts (a seasonal effect resulting from spring resurgence after delays due to snowstorms and low temperatures), but declining building permits, which have reached a five-month low.

World’s Markets:

• EU markets are up, supported by peace talks and projected growth of government deficits. EU economic sentiment hit its highest level in eight months, primarily due to ECB easing, defense spending, and a German internal budget agreement, while the balance of trade plummeted to +1B euros, reaching a 2-year low. Spain’s trade deficit climbed to a 2.5-year high due to a sharp contraction in auto and energy exports, primarily to Mexico (-20%) and France (-14%). Italy also recorded a steep drop in exports and a surge in imports (primarily natural gas).
• Brazilian business sentiment remained subdued, hanging near 2-year lows. The local market went red due to a tax exemption bill and hawkish anticipations regarding the Seltic rate.
• Indian equities soared to a four-week high on China’s stimulus measures, low inflation, and expected RBI rate softening.
• China’s indexes increased following the CCP Economic briefing and technical volatility led by the tech sector.
• The Tertiary Industry Index — Japan’s key business indicator published by the Ministry of Economy, Trade and Industry (METI) — ticked down to 101.6 (100 = the 2015 base), marking the seventh month of contraction. The yen fell to a two-week low as the BoJ is expected to hold its rate steady. Local stocks rallied.

Commodities and Currencies:

• Gold soared to new all-time highs due to a combination of geopolitical instability and global economic slowdown. Oil continues to rise amid the conflict in the Red Sea. The dollar remains at a five-month low.

Crypto:

• BTC, ETH, and SOL are back in the red, continuing to follow the trend of equities.

The State Of Markets: Mixed, American markets are in the red, mostly due to technical volatility compounded by mixed economic data in advance of the Fed’s rate decision. The EU grew on defense spending, while Asian stocks soared, primarily on enthusiasm about renewed Chinese economic growth.

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Wednesday

On Wednesday, stocks rallied after the Fed held rates steady, as expected, and signaled two rate cuts later this year. The S&P, Dow and Nasdaq jumped. The Fed’s softer economic outlook, with weaker growth, higher unemployment, and elevated inflation projections, fueled expectations of rate cuts. Tech stocks Nvidia, Broadcom and Alphabet held gains, while Tesla surged after securing $1 billion in funding. The Fed’s slower balance sheet reduction boosted liquidity, lifting market sentiment. The Fed lowered growth forecasts but raised inflation expectations, though Powell called tariff impacts ‘transitory’. Markets now price in two 2024 rate cuts, with the first likely in June or July. Investors await jobless claims data for labor market insights.

Commodities and Currencies:

• The dollar index hovered near a five-month low at 103.4 as the Fed reaffirmed its rate cut outlook. Officials projected another half-point reduction through 2025, despite uncertainties around Trump’s policies.

Crypto:

• BTC rose +5%, while ETH surged +6% following major indexes.

The State Of Markets: Mostly In Green: majority of world’s market rose as Powell called tariff impacts ‘transitory’.

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Thursday

On Thursday, market indexes corrected after yesterday’s spark, while jobless claims rose alongside existing home sales; however, manufacturing activity continued to decline along with business conditions.

World’s Markets:

• EU markets went red as construction output decreased, with banks and defense stocks leading the decline. The ECB hinted at further easing. The Bank of England, following the Fed, kept its rate unchanged at 4.5%, with an overwhelming majority of 8–1.
• Brazilian equities dropped, with Embraer falling and JBS rising on listing hopes, ending a 6-day rally amid fiscal worries and a hawkish central bank.
• Indian equities rose for a fourth day, reaching over one-month highs on hopes of improved liquidity and growth.
• The South African central bank chose not to lower rates, remaining at 7.5%, as it did in the previous session, citing rising service inflation despite lower fuel prices.

Crypto:

• BTC, ETH, and SOL are in the red, continuing to follow stocks.

The State Of Markets: Down, markets corrected after short-lived rally.

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Friday

On Friday, major indexes closed in the green thanks to technical volatility, aided by a “quadruple witching.”

World’s Markets:

• EU stocks declined as they corrected after a boost from sharply increased military spending. The manufacturing climate in France deteriorated slightly, primarily due to the food and beverages sector. Overall, this indicator has been gradually diminishing after a sudden jump in November 2024. This decline was accompanied by a drop in consumer confidence in Spain.
• Brazilian equities gained slightly, securing a modest weekly rise as traders reacted positively to budget approval and signals from the central bank regarding monetary policy.
• Indian stocks continued their March relief rally for the fifth day, supported by strong economic data.
• Chinese stocks corrected for the third consecutive day on profit-taking.
• Thailand recorded its largest trade surplus in 1.5 years, with exports jumping 14% year-on-year, driven by growing transits, particularly in industrial and agricultural products delivered to America (18.3%), China (22.4%), and the EU (4.5%).

Commodities and Currencies:

• The dollar index rebounded after the Fed held its interest rates, despite Powell describing the inflationary effects of tariffs as “transitory.”
• Oil prices edged higher due to new tariffs targeting Iranian exports to China.
• Steel prices slipped to a 2-month low following a 10% drop in China’s housing investments, as Taiwan, Vietnam, South Korea, and Brazil imposed tariffs on mills’ offload sales. Meanwhile, China plans to build up its strategic reserves of key industrial metals, including cobalt, copper, nickel, and lithium.

Crypto:

• Following the tariff-induced market turmoil, major coins and tokens have been trading close to their yearly support levels, with BTC below 85K and ETH below 2K.

The State Of Markets: Mixed, as markets took a technical pause while some traders fixed their gains or “bought the dip” amid geopolitical uncertainties and the absence of major news.

On Week 13, investors will watch Fed speeches, key data like PCE, PMIs, and GDP, plus housing updates. Global focus includes March PMIs, inflation reports, and economic indicators from Germany, Canada, the UK, and Mexico’s rate decision.

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SVET Markets Weekly Update – March 10th–14th, 2025

On Week 11, major stock indexes closed in deep red, nearing yearly lows after more than a month of continuous decline reminiscent of 2022, as consumer and business sentiment deteriorated at a speed not seen in decades, while the economy still remains relatively strong. Meanwhile, BTC, ETH, and SOL continued to slide, prompting some analysts to declare the start of a bear market.

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MONDAY

On Monday equities were in deep red, with the Nasdaq and S&P hitting 6-month lows while consumer inflation expectations rose to a yearly high of 3.1%.

World’s Markets:

• EU stocks were falling, following American markets engulfed in trade war mongering. Chinese, Brazilian, and Indian stocks followed the world’s trend into the red zone as America’s economic downturn becomes more pronounced. Meanwhile, Chinese domestic demand is weakening as deflationary pressure mounts.

Commodities and Currencies:

• The euro is at a 4-month high as Germany declared a €500 billion infrastructure fund to foster economic growth. Oil approached a 6-month low on recession fears and concerns about oversupply if sanctions are lifted.

Crypto:

• BTC plunged deeper after stocks and approached its November support zone of 70K to 75K. ETH broke through the buy barrier at 2K and is now trading at levels reached on a second month after the EU war started in February 2022. SOL is rapidly nearing 100, its yearly low.

The State Of Markets: All In Red, as America’s recession looms investors all over the world continue to panic-sale.

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TUESDAY

On Tuesday, major stock indexes continued to fall as trade war escalates on new retaliatory tariffs. Meanwhile, business owners optimism dropped to the pre-election level with inflation remaining the main issue and job openings beating expectation specially in retails and finance while services shed jobs vacancies.

World’s Markets:

• EU stocks deepen its downsize with French market at its month lows as autos with N. American exposure declined.
• Brazilian industries stalled after three-month downsize with main gains coming from machinery sector while declines were registered in petroleum production. Brazilian equities were mostly flat.
• Indian market was volatile as IndusInd Bank dropped 30% on misreporting while Bharti Airtel gained on SpaceX’s agreement to bring Starlink to India.
• Chinese indexes were in green after the conclusion of the CCP annual meeting (Two Sessions), where party officials promised to support tech.

Commodities and Currencies:

• Gold went closer to ATH as oil prices lowers and dollar continues to weaken amid Washington’s anti-trade policies.

Crypto:

• BTC, ETH, SOL and ADA recovered adding 5–10% on technical buying.

The State Of Markets: Flat to Negative, world’s markets keep downward trajectory as investors continue to exit while trade war intensifies.

WEDNESDAY

On Wednesday, equities are mixed in response to retaliatory tariffs and an unexpected softening of the inflation rate to 2.8 from 3.0 for the first time in 6 months, driven by a decrease in energy costs (except for natural gas) and a smaller increase in shelter and transportation indexes. The government budget deficit (-$307B) continues to mount due to debt payments.

World’s Markets:

• EU stocks halted a 3-day downward streak, primarily due to the absence of extreme negativity and supported by an increased likelihood of a potential ceasefire. Retail growth in Spain continued to slow, particularly in non-food products. German bond yields reached a over 10-year high in anticipation of increased state borrowing.
• Brazilian inflation continues to climb, reaching a 17-month high of 5.06%, driven by energy prices, which have been somewhat softened by government credits, as well as housing costs. Meanwhile, stocks are rising based on technical factors.
• Indian industries grew beyond expectations, particularly in petroleum, minerals, and textiles. Despite this, stock indexes continue to decline as tech stocks fell following downgrades by leading brokers.
• Chinese stocks are in decline as tech momentum wanes after the end of the CCP session.
• Japan’s market stalled due to a 6–7% monthly wage hike deal between major corporations and their workers (30% of the country’s labor force), opening the door for more BOJ rate hikes as inflation is expected to rise as a result.

Commodities and Currencies:

• The sea freight index continues its rally, reaching a 3-month high as producers worldwide stockpile materials ahead of impending tariffs. Aluminum prices reached a 9-month high following Trump’s 25% tariffs, which significantly impact the American market, which imports 80% of its aluminum needs. The euro hit a 4-month high amid renewed hopes for a one-month ceasefire deal.

Crypto:

• BTC, ETH, and SOL have slightly softened their declines, reaching their 5–6 month lows.

The State Of Markets: Mixed, American and EU markets are mostly in the green, supported by a technical correction and easing inflation (which is almost certainly temporary), as well as renewed hopes for peace. In contrast, stock indexes in Asia are mostly down or stalled due to rising inflation and slowing economies.

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THURSDAY

On Thursday, equities turned red due to new tariff threats, despite producer prices declining on a yearly basis, with the largest monthly fall since July 2024, led by vehicles and food.

World’s Markets:

• European industrial output stabilized after a 20-month streak of contraction, driven by a surge in intermediate goods (those used for the production of other goods), excluding energy. EU markets declined due to the refusal for a ceasefire and the threat of 200% tariffs on wine. France’s GDP growth was revised to 0.7% from 0.9%, partly due to trade tensions (estimated cost = -0.1% of France’s GDP).
• Brazilian equities rose on local developments, including a legal victory regarding a tax infraction and positive quarterly reports from commodities companies, particularly Petrobras.
• Indian indexes were down for the fifth consecutive session, led by declines in the auto, tech, and banking sectors, ahead of prolonged festive weekends.
• Chinese markets were in the red for the second consecutive session, led by tech and AI, amid renewed pessimism about the CCP’s 5% economic growth target.
• Japanese stocks fell due to prospects of a BOJ rate hike, despite a surge in Mitsubishi Electric shares following the announcement of a 43.5 trillion yen government defense plan.
• Mining production in South Africa continued its downward trend that began in 2024, as global demand — particularly from China — for resources fell. This decline was led by iron ore, platinum metals, and coal, while gold production rebounded in January.

Commodities and Currencies:

• Gold reached a new ATH above 2,970, silver hit a 4-month high, and the dollar strengthened again due to geopolitical factors.

Crypto:

• BTC, ETH, and SOL followed stocks into a downward spiral, raising concerns among some analysts who see signals of an upcoming bear market sparked by tariffs leading to an economic recession. Most, however, remain hopeful, believing that this is a temporary price adjustment that will pass as soon as tariffs are lowered or revoked.

The State Of Markets: In Red, almost all major global markets were down due to new tariff threats, an economic slowdown, and the refusal of a ceasefire deal.

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FRIDAY

On Friday, markets are on the rise as investors’ worries about a government shutdown ease, coupled with expectations of the Fed’s shift towards more active rate reduction. This comes as consumer sentiment plummets to 2022 lows, with people’s expectations deteriorating across all economic facets, including personal finance, labor, and inflation. Inflation surged to 4.9% from 4.3% this year and is projected to rise to 3.9% from 3.5% over the next five years — the largest monthly increase in 33 years — impacting business conditions. Meanwhile, current economic conditions remain, objectively, little changed.

World’s Markets:

• EU equities followed America’s upward trend on a brief surge of trader optimism. German stocks jumped due to an agreement between Merz and the Social Democratic Party (SD) to change the state’s borrowing rules, which will allow for increased spending. Spanish inflation has risen for the fifth consecutive month, reaching 3% and nearing yearly highs, driven primarily by energy prices.
• The Brazilian real continues to strengthen on an improving government budget, while producers’ inflation eased for the twelfth consecutive month to nearly zero, with the food sector contributing the most. The stock market closed in the green, though retail sales continued to decline for the third month in a row.
• Foreign investments in the Chinese economy sank by more than 20%, marking the sharpest decline since 2009. Investors are disillusioned with the CCP lack of stimulus and excessive control over the economy. Chinese stock indexes rebounded due to technical factors, helped by expectations of stimulus promises following a conference with officials on Monday.

Commodities and Currencies:

• The dollar index edged down as gold prices hit a record closing above 3000.

Crypto:

• BTC, ETH and SOL registered an uptick after stocks but have still maintained their bearish trend.

The State Of Markets: In Green, primarily due to a technical correction, along with minor positive shifts in internal political settlements and an optimistic interpretation of minor economic data.

On Week 12, investors will focus on the Fed’s rate decision on Wednesday, economic projections, and key data like retail sales and housing indicators. Globally, rate decisions from Japan, China, the UK, and others, along with inflation and economic data, will be closely monitored.

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————

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SVET Markets Weekly Update  -February 24–28, 2025)

On Week 9, equities showed their worst performance in several years as the trade war intensified and geopolitical tensions mounted. This was compounded by the darkening macroeconomic picture, with inflation continuing to rise and consumer spending — the cornerstone of economic growth — dropping the most in two years. All around the world, investors responded with massive de-risking, which hit BTC and the rest of the crypto market particularly hard, with the Trump rally effect now either completely wiped out or reversed for the majority of altcoins.

Monday

On Monday, equities are down as manufacturing activity plummeted due to sharply rising costs and an uncertain outlook.

World’s Markets:

• European inflation hit a 6-month high, driven by energy costs. EU markets are mixed, with the defense and auto sectors up while energy is down.
• German stocks rose as traders reacted to the conservative party leading in Sunday’s election, but they may form a coalition with Scholz’s SPD.
• Brazilian equities are lower due to rising inflation and an expected BCB rate hike.
• Indian market indices have declined as well.
• The Chinese tech index is down due to Trump’s new memorandum limiting investment in domestic technologies.

Commodities and Currencies:

• The dollar, gold, and oil are flat as Zelenskiy hinted at stepping down.

Crypto:

• BTC, ETH, and SOL, along with the rest of the crypto market, are in deep red following the after-hours confirmation of the CaMex tariffs and the breaking of key technical supports.

The State Of Markets: Mixed, absorbing tariffs confirmation and German election results.

Details

• In February, the Dallas Fed’s Texas manufacturing activity index plummeted to -8.3 from 14.1 in January, marking a sharp decline. Production, new orders, and capacity utilization fell, while input costs surged and wage pressures eased slightly. 1Y trend: “Up” (DFed)
• The Chicago Fed National Activity Index dropped to -0.03 in January, indicating slower economic growth. Declines in personal consumption, housing, and production offset gains in employment and sales. The three-month average rose to +0.03. 1Y trend: “Up” (CFed)

World Markets

• Euro Area inflation hit 2.5% in January, the highest since July 2024, driven by rising energy costs. Core inflation held at 2.7%, while prices for services and food slowed. Monthly prices dropped 0.3%. 1Y trend: “Side” (Eurostat)

Comment: What’s Up With Politics?

If you ask me how, based on objective economic data resulting from the first month of the new White House administration, to briefly characterize its economic policy, I would say that with its wide-ranging tariffs on almost all key raw materials and long-term products, its over-centralized, highly authoritarian decision-making style, and its harsh intrusion in almost all spheres, starting from energy to education, this policy is definitely and heavily ‘pro-oligarchical.’

All those tariffs won’t replace taxes, as they only initiate new-shoring of all key production facilities or re-export through other ‘good’ countries. Not to mention that with less than 25% of GDP coming from industrial sector and the remaining 75% from services, the overall economy’s gain would be microscopic, if any, compared to the massive downsizing that would result from shutting themselves out of global markets — essential for the growth of a services-based economy. Bottom line, tariffs will only give power over consumers to several domestic corporations, which CEOs are close to centers of political power.

As for crypto, Official Trump Coin has just given us a clue as to what the policy would be — the forceful and fast siphoning of all crypto market liquidity by several ‘patriotic’ coins — basically, those which will be more actively promoted by crypto figureheads close to the current administration. SOL, XRP, Doge and Base ETH are obvious candidates for that close-knit, hand-picked group of the ‘America-first’ winners.

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Tuesday

On Tuesday, tech and broader market indexes went down as Trump intended to limit Chinese chip exports, while the industrial-heavy Dow rose after data showed local expansion in the manufacturing sector, even though services contracted, which was accompanied by rising home prices indicating a resurging inflation. Tesla’s market cap fell below USD 1 trillion. Treasuries ticked down on renewed expectations of Fed easing.

World’s Markets:

• EU stocks are mixed, with tech, which followed Wall Street’s drop, in the red, and the defense sector in green as Germany forms a coalition government and talks about allocating a 200 billion military budget intensify. This also caused the euro to rise to a month high.
• The Brazilian market performed well after an easing inflation report and positive earnings reports. Indian stocks are also gaining on the back of rising financial and FMCG sectors.
• Chinese stocks stumbled after Trump’s chip restrictions were announced. The Japanese yen strengthened to a 12-week high as investors fled from the USD.
• Milei’s reforms in Argentina continued to bear fruit as the economy grew at its fastest rate in 3 years, with manufacturing and agriculture adding 8% YoY.

Commodities and Currencies:

• The dollar and oil are at their two-month lows on renewed concerns of an economic slowdown prompted by tariffs.

Crypto:

• BTC plummeted to 85K, reaching a 3-month low under the combined weight of negative macroeconomic sentiment and technical factors, followed by ETH, SOL, and the rest of the coins/tokens.

The State Of Markets: Mixed, with tech falling on chip restrictions and industrials rising on defense.

Details

• The S&P CoreLogic Case-Shiller 20-city index rose 4.5% yoy in December 2024, exceeding forecasts. New York led with a 7.2% gain, while Tampa fell 1.1%. National prices grew 8.8% annually since 2020, but growth has slowed since 2021’s peak. 1Y trend: “Down” (SP)
• The Fifth District’s composite manufacturing index climbed to 6 in February, marking its first expansion after 15 months of decline, surpassing expectations of -3. New orders stabilized, shipments rebounded sharply, and employment and wage growth improved. 1Y trend: “Side” (Rich)
• The Dallas Fed’s Texas service sector index fell to 4.6 in February, its lowest since October, while revenue growth remained below average. Employment stagnated, hours worked declined, and business sentiment weakened sharply, with uncertainty surging. 1Y trend: “Side” (DFed)

Comment: The Historical Opportunity or A Hysterical Attempt?

Over the past month, the ‘America First’ policy has been cutting deeper and deeper into people’s pockets as costs are rising all over, business sentiment is falling like a rock, and the stock market has shown the worst performance in years — not to mention crypto, which was hit particularly hard given all the promises made during the pre-election period. Adding to that is a falling dollar and, of course, the economically pointless tariff war on the whole world, with some yet unclear political benefits.

At the same time, EU stocks are rising while the euro is strengthening, giving the impression that Vance’s ideological offensive against Brussels has served as a liberation trigger for long-forgotten European business ingenuity, further bolstered by ballooning military budgets. ‘America First’ has also benefited other countries; for example, in Russia, the stock markets are buoying, and the local currency has reached a 6-month high, while in China, the local AI sector has found a way to re-accelerate without Silicon Valley’s VCs.

We can say, of course, that it’s just the beginning, and after ‘initial pain,’ there will be countless benefits from reshoring, tax cuts, and reduced regulatory burdens. We can all count on the Musk miracle, of course, but economically speaking, there is almost zero probability that tariffs will replace taxes, that reduced government investments in critical sectors like alternative energy will bolster economic activity, or that lower regulatory burdens will compensate for the shutting down of international trade.

Nonetheless, all that said, even if the present ‘economic policy’ is terrible, there may be no choice because there are simply no more ideological, military, and economic resources to maintain the past global ‘projection of power’ and an overwhelming business presence. The world has grown too large and too fast for that ‘status quo’ not to be changed while rival centers of power are popping up like mushrooms after the rain.

Faced with that reality, there are no local politicians who can explain it frankly and directly to voters, bluntly saying, for example, that we are retreating because we have chickened out militarily and do not have either the muscles or the brains to maintain our leadership. ‘America Is So Back’ might well be a good enough slogan to masquerade something more truthful, but of course, less appealing to the masses, like ‘America Is So Back Under the Rock.’

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Wednesday

On Wednesday, equities closed mostly in the red as home sales and building permits decreased, showing consumers’ growing distress, added by Trump’s 25% levies on EU autos announced.

World’s Markets:

• European stocks outperformed for a second day after the German elections, as gains in the energy and industrial sectors, especially defense, outweighed the downsides of new auto tariffs. This was bolstered by optimism surrounding the end of the war, as an Americana-Ukrainian minerals deal — a ‘payback’ for wartime aid — appears to be progressing.
• Brazilian markets are down due to lower unemployment, as investors expect further rate increases from the BCB.
• Chinese equities are in the green, as new economic stimulus promised by the CCP led to a rise in industrials, while tech is down due to Trump sanctions on chips.
• Argentinian retail sales rose by 17% in constant prices, up from 4% the previous month.
• Vietnam imposed tariffs on Chinese hot-rolled coils in an attempt to protect local producers and increase profits from growing exports of locally produced steel to America.

Commodities and Currencies:

• Oil and the dollar are trading lower on expectations of an economic slowdown in America caused by Trump’s inflationary policies.

Crypto:

• BTC continued to crash, hitting its 200MA at 83K. Overall, by 2025, Trump’s trade war has already wiped out USD 1 trillion from the crypto market capitalization, plunging it below USD 3T.

The State Of Markets: Mixed, with American equities continuing to underperform, especially compared to the EU.

Details

• New Home Sales fell 10.5% to 657K units in January after an 8.1% rise the prior month. Historically, monthly sales averaged 0.30% from 1963–2025, peaking at 31.20% in April 1963 and hitting a low of -33.60% in May 2010. 1Y trend: “Side”. Meanwhile, building permits dropped 0.6% to a seasonally adjusted annual rate of 1.473M in January, missing initial estimates of a 0.1% rise to 1.483M. 1Y trend: “Side”. (Census)

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Thursday

On Thursday, tech stocks are down on weak earnings reports, together with the broader market including industrials in the Dow despite durables jumped to a 6-month high, driven by aircraft. Meanwhile, jobless claims rose to a 2-month high, the regional manufacturing index reached a 5-month low, and the economy decelerated to 2.3% — slowed expansion over 3 quarters — as exports fell and investments contracted despite increased consumer spending and government expenditures. The economic picture was further darkened by a rise to 2.3% in core PCE — the first increase in four quarters — and sharply dropping home sales for the second month in a row.

World’s Markets:

• EU stocks are in the red after 25% tariffs on all imports were announced, with autos and tech hit particularly hard.
• French unemployment skyrocketed by approximately 200K — 80% among those aged below 25 — marking the sharpest rise in recorded history, except for 2020.
• Spanish inflation increased for the 5th month in a row, driven by electricity prices.
• UK car production is down 18% compared to a year ago, due to weakening domestic and international demand.
• The Brazilian real weakened slightly amid investor concerns over mounting government expenditures without backing it up with revenues. The local market is also in the red due to high unemployment, which jumped to 6.5% from 6.2%, and disappointing corporate reporting, especially from Petrobras.
• The Indian market is flat as metals and banks advanced on rising rates while autos fell due to tariffs.
• Chinese stocks are mixed as traders await next week’s government sessions to outline their stimulus policies.
• South African producer inflation accelerates, led by food.

Commodities and Currencies:

• Gas prices increased in Europe, reflecting concerns that American LNG costs will rise. Copper prices jumped as new Trump levies loomed over it.

Crypto:

• BTC is slumping further down to 80K, joined by the rest of the market in a continuing sell-off, as industry participants reassess their positions in light of Trump’s ongoing trade war and politicians further delaying BTC reserves and regulatory clarity.

The State Of Markets: Down, the intensifying trade war is leading to higher producers’ costs and rising consumer inflation, preventing central banks from easing rate pressure.

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Comment: EU Is So Back?

According to objective economic data, the initiation of the trade war against the whole world has suddenly played heavily into the hands of Europeans, Chinese and Brazilians. It is reminiscent of what happened to the Russian economy after all major Western brands withdrew from the local market, freeing it for domestic producers.

Similarly, Trump’s “sanctioning” of Europe and China might now free market niches for local industries as American corporations are forced to re-shore their production back home, which sharply increases costs and decreases their competitiveness in foreign markets.

Smaller countries not yet sanctioned by Trump are in a particularly privileged position as they can now have the best of both worlds — shielded from American competition, they can still continue to produce for both internal and American markets.

That is perfectly logical from a macroeconomic point of view. The era of American corporate dominance ended right after the American political class recognized that it did not have enough military and financial power to keep dominating literally all the world’s markets. So, now America’s piece of the global wealth pie is destined to be reduced as multiple competitors continue to claim larger and larger portions of it.

Despite all the talk about “competing with China,” there is not going to be any “competition”; it will be only the “organized retreat” — deciding how much of the world’s pie America could afford to itself to defend.

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Friday

On Friday, major indexes rebounded on technical buying as the core PCE index eased, but consumer spending dropped for the first time in two years. Meanwhile, the trade deficit ballooned to new records due to increased purchases of industrial supplies ahead of tariffs.

World’s Markets:

• EU stocks are slightly down, with tech declining while manufacturers gained a bit on good reports and a decrease in inflationary expectations.
• The Brazilian market closed in negative territory ahead of the Carnival holiday’s slowdown, and government bonds traded at a 10-year high amid budgetary concerns.
• Indian stocks dropped, led by tech and FMCG, as foreign investors excited, expecting a trade war despite the economy accelerating and becoming the fastest growing in the G20, bolstered by increasing consumption and government expenditure.
• Chinese equities declined as tariffs continued to weigh on the market while the AI rally took a pause.

Commodities and Currencies:

• The dollar strengthened while gold ticked down as the number of expected Fed rate cuts reduced.

Crypto:

• BTC rebounded slightly after hitting 80K, but the overall crypto market still remained in the red.

The State Of Markets: Mostly down, investors continued to risk-off, faced with the looming trade war, rising inflation, and slowing consumer spending.

On Week 9, investors will watch the labor report, trade tariffs, ISM PMI, factory orders, and Fed speeches. Euro Area highlights include ECB rates, inflation, and unemployment. Key data on rates, inflation, GDP, and trade will emerge globally.

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SVET Markets Weekly Update (February 17–21, 2025)

On Week 8, equities are deep in the red as Trump’s tariffs and geopolitical games start to worsen economic data and devalue the dollar. EU markets are mixed, with defense stocks up following Vance’s Munich speech, while tariffs suppress auto and other sectors amid looming German elections. The world’s markets are mostly in the red, led by Indian stocks dragged down by tariff-sensitive resources and pharmaceuticals. Meanwhile, Chinese markets performed well due to PBoC easing and a continuing AI rally. Gold and silver are up as investors de-risk. BTC, ETH, and SOL still can’t recover after Trump’s tariffs plunge a month ago.

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Monday

On Monday, with main markets closed for a holiday, EU defense equities surged on expectations of increased military spending following Vance’s Munich speech. Gold and oil are fluctuating amid growing anticipation of Ukraine war peace talks. BTC is declining as institutional investors continue to de-risk. SOL has been hit the hardest as ETH outperformed, allegedly due to large purchases by some private funds.

Crypto

• Digital asset investments saw $415M in outflows after a 19-week $29.4B inflow streak, likely due to a hawkish Fed stance and high US inflation. BTC led outflows at $430m, while Solana, XRP, and Sui saw inflows. 1Y trend: “Side” (source)

World Markets

• European stocks rallied on Monday, hitting new record highs. Defense stocks surged amid expectations of increased defense spending after Vance’s Munich speech. Peace negotiations on Ukraine are set to begin. Trump reaffirmed plans to impose tariffs on foreign cars. 1Y trend: “Up”
• In December 2024, the Euro Area achieved a trade surplus of €15,467.70M. Historically, the trade balance averaged €5,649.61M (1999–2024), peaking at €29,946.10M in July 2015 and hitting a low of -€54,922.70M in August 2022. 1Y trend: “Side” (Eurostat)

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Comment: What’s Up With DOGE? (again)

Within Accenture, during the era of “business process re-engineering,” we categorized client projects based on a 2×2 matrix. The horizontal axis represented the client’s budget, ranging from no budget to an unlimited one, while the vertical axis represented the client’s needs, from “not needed at all” to “very urgent.”

I suspect that Elon Musk does not perceive his current interactions with governmental bodies as a “re-engineering” endeavor. I believe his approach is closer to a crusade, and his core team likely consists not of business process experts, but of bug-hunters who see themselves as “people’s auditors.”

If I were to classify Musk’s current governmental involvement using our framework, I would place it squarely in the fourth quadrant: “high-need, low-budget.” The term “budget” here encompasses not only financial resources but, more crucially, the time required to re-engineer a vast organization like the bureaucratic apparatus of the world’s largest economy. Even a four-year timeframe (I am not sure Musk has so much time for his escapades) is insufficient for this task, especially lacking the necessary experience and broad political agreement.

Consequently, Musk will likely focus on easily achievable and attention-grabbing initiatives. He will likely overlook the more complex task of achieving substantial improvements in government effectiveness and reductions in long-term costs. This ultimately means that the primary political objective — reducing government spending to curb inflation — will remain elusive. Only systemic, far-reaching changes to the government’s “business processes” can significantly reduce government expenses and meaningfully impact inflation.

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Tuesday

On Tuesday, equities were mixed as the holiday-shortened week started, with the S&P and Nasdaq near flat and the Dow down. Meanwhile, manufacturing activity grew above expectations as traders weighed delayed levies, Ukraine peace prospects, and bearish comments from the Fed. European stock indices hit ATH amid optimism over peace talks. Markets in Brazil are rising, boosted by Lula’s plan for infrastructure investments and delayed tariffs. The Indian market is stalling while capital outflow continues as the RBI eases policies and investors expect Trump’s tariffs on chemicals, metals, and autos to be enacted in April. Hong Kong stocks surged after Xi met with tech leaders and promised support to rival American competitors. The resource-driven and China-dependent market in Australia is down as the RBA cuts its rate for the first time since 2020. Its counterparts — markets in South Africa and Nigeria — fluctuated as, correspondingly in those countries, unemployment and inflation pressure eased slightly. Oil, gold, and silver are up marginally, remaining in a weekly side trend amid uncertain outcomes of geopolitical developments. BTC, SOL, and ETH continued to decline amid technical factors and growing bearish sentiment.

The State Of The World Market: Volatile, fearing a downside on a slowing economy but hopeful on the geopolitics.

Details

• The NY Empire State Manufacturing Index rose to +5.7 in February, beating forecasts and indicating a slight rebound. New orders and shipments grew, but employment fell. Input costs surged, while business optimism declined despite expectations of future improvement. 1Y trend: “Side” (NYFed)
• The NAHB Housing Market Index dropped to 42 in February, a five-month low, due to tariff concerns, high mortgage rates, and housing costs. Current sales, future expectations, and buyer traffic all declined, reflecting weakened builder optimism. 1Y trend: “Down” (Nahb)

World Markets

• Germany’s ZEW Economic Sentiment Index jumped to +26 in February, its highest since July 2024, exceeding forecasts of +20. Optimism grew over the new government’s potential and improved private consumption and construction sector outlooks, though current economic conditions stayed weak. 1Y trend: “Down” (ZEW)
• South Africa’s unemployment rate dropped to 31.9% in Q4 2024, the lowest since Q3 2023, as employment rose to 17.078M. Finance and manufacturing sectors saw job gains, while youth unemployment fell to 59.6%, a one-year low. 1Y trend: “Down” (Statssa)

Currencies

• The euro fell to $1.45 amid concerns over rising defense spending’s impact on inflation and rates. European leaders discussed Ukraine support but took no concrete steps, while the ECB is expected to cut rates three times, potentially below 2% by 2026. FYI: Additional military expenditure for the next 10 years is estimated at USD 3.1T. Combined EU yearly GDP is about USD 25–30T. Top five EU economies’ GDP is about USD 15T (Germany: $4.5T; UK: $3.5T; France: $3.3T; Italy: $2.2T; Spain: $1.6T). So defense expenditures are expected to stay at 2–3% of combined EU yearly GDP or twice of that for leading economies. 1Y trend: “Down, Depreciated”

Commodities

Silver prices edged higher to near $32.5 per ounce , continuing their recent range-bound trading. Global trade uncertainties and safe-haven demand supported silver. Trump’s tariff threats and the ongoing Ukraine war added to the uncertainty. Strong industrial demand, especially from the solar and wind power sectors, also boosted silver prices. 1Y trend: “Up”

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Wednesday

On Wednesday, equities are up, with the Nasdaq and S&P making new ATHs, as housing starts decline sharply and despite new tariff threats and FOMC minutes showing the majority on a rate-cutting pause in view of tariffs. Japanese markets are down, keeping inside of their narrow 12-month-old side-range after the BoJ started its rate hike. Australian shares hit a one-month low on tariffs, with the jobless rate the highest in 3 months. The EU’s, as well as Canadian, Brazilian, and Indian stock markets, are down as auto, chip, and drug stocks were pressured by Trump’s new levies. The South African rand keeps depreciating on slow growth, high debts, and a budget deficit. Chinese equities are in the green on a continuing DeepSeek rally. Natural gas surged to a 5-year high on cold weather. Lumber keeps rising on tariffs. BTC, SOL, and ETH are in slight green but still in a bear trend. Other news: Microsoft introduced a quantum chip.

The State of the World Market: Mostly Down, suppressed by new tariffs, rising inflation and mounting debts.

Details

• Housing starts dropped 9.8% MoM to an annualized 1.366M units in January, after a revised 16.1% surge in December. Historically, housing starts have averaged 0.31% since 1959, peaking at 29.3% in July 1982. 1Y trend: “Side” (Census)
• Fed policymakers urged caution in adjusting monetary policy amid high uncertainty. Some favored maintaining restrictive rates if inflation stayed high, while others supported easing if growth slowed. Upside inflation risks were noted. Rates held at 4.25%-4.5%. 1Y trend: “Down” (Fed)

Crypto

• Microsoft introduced Majorana 1, a quantum chip leveraging topological superconductivity, a unique state of matter. The chip uses a custom topoconductor to control Majorana particles, advancing quantum computing. It requires extreme cooling and precision. (source)

World Markets

• China’s FDI fell 13.4% YoY to CNY 98B in January 2025, marking the weakest start in four years. Declining foreign confidence, deflation risks, and opaque balance sheets persisted, though government support and tech sector easing boosted sentiment. 1Y trend: “Down” (CN
• The People’s Bank of China held key lending rates steady for the fourth month in February, keeping the one-year LPR at 3.1% and the five-year LPR at 3.6%, both at record lows. The decision aligns with market expectations amid yuan pressure and trade tensions. Last week, the PBoC hinted at future policy adjustments to support the economy. 1Y trend: “Down” (PBC)

Currencies

• The South African rand fell to an over two-week low of 18.6 per USD after Finance Minister Enoch Godongwana’s budget speech was postponed, the first delay in three decades. Coalition divisions deepened as the Democratic Alliance opposed a VAT hike, complicating fiscal reforms amid economic challenges, which include slow growth and high debts, exacerbated by budget deficit which was caused by expanding social programs and support for state-owned enterprises. 1Y trend: “Side”

Commodities

• Natural gas futures surged over 7% to $4.36/MMBtu, hitting a December 2022 high amid extreme cold boosting demand and disrupting output. Prices rose for seven days, the longest streak since July 2021, with a 29% weekly gain lifting gas producer stocks. The oil-to-gas ratio fell to 17-to-1, its lowest since December 2022, reflecting gas’s strength. Analysts expect cold weather to sustain high demand through February 22. 1Y trend: “Side”
• Lumber futures neared $620 per thousand board feet in February, the highest since October 2022, driven by tight supply and tariff concerns. North American production fell in 2024 due to sawmill closures, while tariff hikes on Canadian lumber risked price spikes (up to 40%). 1Y trend: “Up”

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Thursday

On Thursday, equities closed in the red on earnings, despite rising jobless claims and falling manufacturing. Palantir dropped due to expected Pentagon budget cuts. In Europe, construction output continued to decline while consumer confidence is rising in anticipation of the ECB easing rates. EU stocks are mixed as traders assess corporate profits, with chip stocks going up while FMCG stocks went down. The Brazilian market is neutral, while Indian stocks are down due to selling in IT and banks. Chinese equities are in the red on profit-taking. The Japanese yen is at a two-month high as the flight from USD assets intensifies amid Trump’s ‘aggressive negotiation’ tactics. Oil prices are rising while the dollar is down, as tariffs and rate projections remain uncertain. Gold has reached a new ATH amid ongoing risk-off sentiment. BTC, SOL, and ETH are in the green on cautious buying. SOL continues to struggle after a sharp decline in meme coin trading.

The State of the World Market: Down, investors fleeing to safety from US assets amid growing geopolitical and economic worries.

Details

• Initial jobless claims rose to 219K for the week ending February 15th, exceeding forecasts of 215K. The labor market remains tight, though federal employees affected by DOGE layoffs are excluded from state data. 1Y trend: “Up” (DOL)
• The Philadelphia Fed Manufacturing Index fell to 18.1 in February from 44.3 in January, missing forecasts of 20. While activity expanded, growth slowed as new orders, shipments, and employment eased. Price pressures rose, and six-month growth expectations softened. 1Y trend: “Up” (PhFed)

Crypto

• Meme tokens, typically buoyed by strong BTC performance, have seen subdued volumes and declining interest as BTC trades sideways. Most cult tokens have lost over 70% of their value, with SPX6900 being an exception. Overall crypto open interest has dropped to $63.95B from December’s $94B peak, with meme tokens like PEPE, WIF, and BONK experiencing significant outflows. Traders are shifting focus to airdrops and older coins, reducing meme token mindshare. (source)

World Markets

• Euro Area construction output fell 0.1% YoY in December 2024, with declines in specialized activities (-1.4%), buildings (0.1%), and civil engineering (2%). France and Italy saw drops, while Germany and Spain rebounded. Annual output declined 0.9%. 1Y trend: “Up” (Eurostat)
• Euro Area consumer confidence rose to -13.6 in February, a four-month high, surpassing expectations of -14. Optimism grew as the ECB is expected to cut rates further, with forecasts suggesting rates below 2% by 2026. EU sentiment also improved to -12.9. 1Y trend: “Up” (EU)

Currencies

• The yen strengthened past 149 per dollar, hitting a two-month high as expectations of a BoJ rate hike and global uncertainties boosted demand. BoJ’s Takata hinted at further policy adjustments, while Japan’s GDP growth and upcoming inflation data added optimism. Trade tensions and geopolitical risks also supported the safe-haven currency. 1Y trend: “Side”

Commodities

• Gold hit a record high above $2,950 per ounce amid rising global uncertainties, fueled by escalating trade tensions from Trump’s tariffs and geopolitical risks. FOMC minutes noted inflation concerns, delaying rate cuts, while Trump’s comments on Ukraine added to market unease. 1Y trend: “UP”
  

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Comment: What’s Up With Trexit?

Vance’s  speech in front of Brussels’ entrenched bureaucrats signifies that a new generation of politicians — much younger but no less greedy — is taking hold of the world.

Since 2017, I have been writing about the upcoming generational shift and its implications for the economy and politics. This shift occurs in cycles: four smaller ones every 20–25 years and one large cycle every 80–100 years. Each generation tends to adopt ideologies and strategies that are oppositional to those of the preceding one. For example, Musk/Vance/Hegseth and the Millennial generation may lean toward authoritarianism, contrasting with Boomers’ tolerance.

The new White House administration has already implemented substantial tariffs and divisive rhetoric. While some believe this is empty talk, I contend that worldwide conflicts are inevitable due to the desires of a generation seeking rapid change.

From an evolutionary perspective, humans are designed to adapt. With the global population now at 8 billion, competition for resources has intensified. Globalization has pushed many out of lucrative jobs, leaving a small number of moguls in control.

Decentralization will offer more opportunities for local talents to prosper, as they will only need to compete with their immediate neighbors instead of the entire world. While corporations will continue to exist, the fight among them will become fiercer, allowing room for small businesses. This results in a precarious but inevitable evolution that could eventually lead to a new global order.

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Friday

On Friday, equities plummeted as consumer sentiment and business activity dropped sharply to a 17-month low on tariffs, spending cuts, and hectic Trump’s politics blowing up inflation expectations to a one-year high.

World’s Markets:

• EU manufacturing continued to contract at a slower pace while services growth slowed.
• EU stocks are flat, positioning for Germany’s Sunday election, where right-wing parties, headed by CDU, CSU, and far-right AfD, are leading.
• The Brazilian market closed in red as retailers went down due to tariffs resetting long-term growth perspectives, despite still growing revenues.
• The Indian market ticked down again, dragged by finance, auto, and pharma on tariff expectations, despite the local economy continuing to expand.
• Chinese equities rallied, hitting a 7-week high on AI optimism and PBoC liquidity injections. This was joined by Japan’s stocks led by tech, despite inflation hitting a 2-year high.
• Mexican GDP growth is the lowest in 3 years.

Commodities and Currencies:

• Gold is hanging near ATH as oil goes down on a looming global economic depression, even as supply concerns rise due to volatile geopolitics.
• The dollar is depreciating on economic worries.

Crypto: BTC, ETH, and SOL dropped on stocks and the ByBit hack. The crypto market has stayed in the red for a month, unable to recover after the end-of-January risk-off Trump’s tariffs crash.

The State of the World Market: Deeper Down, investors’ unease on hectic Trump’s politics is increasing as data shows an accelerating economic downturn. Meanwhile, Chinese market stood out supported by AI and PBoC.

Details

• The S&P Global US Composite PMI fell sharply to 50.4 in February from 52.7, signaling near-stagnation in the private sector. Service sector contraction offset manufacturing gains, weakening new orders and employment. Input costs rose, while business optimism hit a near two-year low amid policy and economic concerns. 1Y trend: “Up” (PMI)
• The University of Michigan consumer sentiment for the was revised down to 64.7 in February, the lowest since November 2023. Declines were seen across age, income, and wealth groups, driven by fears of tariff-induced price hikes and rising inflation expectations. 1Y trend: “Down”

Crypto

• Arkham Intelligence reported that the Lazarus Group hacked Bybit for over $1.5B, citing evidence from online sleuth ZachXBT. Bybit confirmed the breach, assuring client withdrawals would be processed. This marks the largest single crypto theft in history. (source)

World Markets

• The HCOB Flash Eurozone Manufacturing PMI rose to 47.3 in February 2025 from 46.6, exceeding forecasts. The sector’s downturn eased to a nine-month low, with slower production declines, falling new orders, and reduced workforce numbers. Input prices rose, while selling prices and business sentiment dipped. Source: S&P Global. 1Y trend: “Up” (SP)

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Comment: On A Strategy of The Betrayal.

This week, crazy geopolitical developments are reminiscent of eighteenth-century war games played on European terrain, with their pawn armies driven by kings and royal courts’ cliques, motivated by selfish ambitions, national pride, and military voluntarism. Machiavellian ‘the ends justify the means’ is a hashtag in almost every latest political tweet. Munich 2.0 — an attempt to redirect resources to the Pacific front by sacrificing elementary ethical and humanitarian considerations to accounting reasoning — may or may not play out as well as Munich 1.0. One thing is clear, however, from the latest economic data: both investors and consumers do not appreciate interference with their basic necessities. Might this be the first call for multitudes to start seeing the light of day and to understand that giving so much power to one individual is the worst idea that has ever come into humanity’s collective mind?

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On Week 9, investors will focus on Fed speeches, major economic data (PCE, GDP, consumer sentiment), and housing metrics. Globally, inflation figures, GDP growth, and key indicators like Germany’s Ifo Index and retail sales will be in the spotlight.

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SVET Markets Weekly Update – February 10th–14th, 2025

On Week 7, tariffs pushed up prices for steel, aluminum, gold, silver, and oil. Stocks rallied as Trump delayed reciprocal levies and initiated peace talks regarding Ukraine, leading to a resurgence in EU equities and a decline in the dollar and oil. BTC, SOL, and ETH remained near their monthly lows as traders navigated political uncertainties.

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Monday

On Monday, equities rose as investors adapted to Trump’s threats of levies, focusing instead on gains in the tech sector, bolstered by AI chipmakers. Steel surged due to tariff plans, while stocks increased across the EU and Asia, particularly in tech. The dollar, gold, oil, aluminum, and other commodities rose in response to the tariffs. BTC, ETH, and SOL prices stabilized despite widespread bearish sentiment.

World Markets

Mexico’s auto exports fell 13.7% YoY to 219,414 units in January, hitting a three-year low. GM, Nissan, Stellantis, and Volkswagen saw sharp declines, while Toyota surged. The USA remained the top destination, receiving 83.6% of exports.

Commodities

Gold hit a record high above $2,900/oz, driven by safe-haven demand amid Trump’s new tariffs, trade war fears, and expectations of looser global monetary policy. Central bank purchases, including the PBoC, further bolstered prices.
WTI crude rose 1.3% to $72.3/barrel amid supply concerns from Trump’s sanctions on Iranian oil shipments. Trade tensions and China’s retaliatory tariffs capped gains, keeping markets cautious.

Comment: What’s Up With Autocrats ?

The world is divided into two unequal parts: one that believes a single head is better than many and another that thinks otherwise. Historically, the former has dramatically prevailed. The annals of history are essentially a chronicle of megalomaniacs — autocrats who have brought us the prosperity we enjoy today and, according to the first part of the world, will continue to pave the way for a brighter future.

On the other hand, the second part of the world argues that it is individual ingenuity, talent, and entrepreneurship that have shaped history. They view autocrats as leeches who exploit social cohesion to seize power and accumulate wealth at the expense of others. Who is right? That may be determined in the next 10 to 20 years, perhaps through another total war or, hopefully, through technological and economic competition. Yet, it is unlikely that a clear answer will emerge. Humans are not machines — at least, not yet. Our nature is inherently controversial, which is essential for survival. Therefore, it is better for us to remain contentious without spiraling into thermonuclear conflict over these differences.

I believe the future will be decentralized, allowing individuals to choose where and how to live based on their circumstances, performance, and age. If we indeed remain divided for an extended period, I hope one side will remember that their autocrats’ primary role is to manage competing interests — essentially, to maintain a democracy within their own royal courts. Conversely, those in the second part should not forget that all technical and social advancements have been made by alliances led by megalomaniacs.

Perhaps the solution lies in avoiding the creation of centralized bureaucratic positions altogether — finding ways to redirect the talents of megalomaniacs toward exploration of new planets, so to speak. But this is merely my opinion, coming from the perspective of Part Two, of course 🙂

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Tuesday

On Tuesday, equities closed marginally higher as Powell remarked on the ‘strong economy,’ while small business owner optimism tumbled due to uncertainty over Trump’s policies. Steel and aluminum stocks were boosted by tariffs. Tesla’s stock dropped following its earnings report. The dollar, oil, gold, and silver continued to rise amidst the trade war. BTC, ETH, and SOL fluctuated as traders remained indecisive.

Details

The NFIB Small Business Optimism Index dropped to 102.8 in January from 105.1 in December 2024, missing forecasts of 104.6. Owners remain hopeful but face hiring challenges, inflation concerns, and reduced capital investment plans.

Crypto

The Central African Republic’s memecoin, CAR, plummeted nearly 97% from its peak within 24 hours. Initially surging, it collapsed amid skepticism about its legitimacy. Despite the dramatic fall, the country’s President continues to promote the token.

World Markets

Mexico’s industrial output fell 2.7% YoY in December, marking the fifth straight decline. Construction, mining, and manufacturing dropped, while utilities grew slower. Monthly production fell 1.4%, missing forecasts. Annual 2024 output rose 0.2%.

Currencies

The Indian rupee rose to 86.8/USD, supported by RBI intervention after hitting record lows near 88. Despite recovery, it remains Asia’s worst-performing currency due to foreign outflows and slow growth. Tariffs and RBI rate cuts add pressure.
The offshore yuan weakened as the dollar strengthened following new tariffs on steel and aluminum imports. China retaliated with tariffs on coal, LNG, and crude oil.

Commodities

Silver stayed near $32/ounce, close to 3-month highs, driven by safe-haven demand after tariffs on steel and aluminum. Investors await inflation data and Powell’s comments, while industrial demand and supply deficits support prices.
Brent crude oil prices rose, driven by tighter Russian supply and rising geopolitical risks. New sanctions on Iran and the potential for renewed conflict in the Middle East supported prices. However, gains were limited by tariff concerns and broader economic uncertainty.

Comment: What’s Up With Tariffs?

If politicians are trying to address the issue of 30K to 50K unemployed industrial workers by increasing domestic manufacturing, then they are embarking on a very long and complicated journey. The previous administration’s blatant disregard for this issue has cost them dearly. The idea of training former steel workers to program in Go was absurd from the start. However, while tariffs may momentarily protect certain industries, they are more likely to simply shift production to non-tariff countries, leading to further delays in addressing the issue.

A better solution would be UBI, but the current administration’s rigid adherence to Darwinian capitalism prohibits this approach. As a result, tariffs ultimately fail to benefit the working population.

What about the suggestion to devalue the dollar by 20%, as some economists close to Trump advocate? If the Fed supports this move, devaluing the dollar wouldn’t be particularly challenging — no tariffs would even be necessary. However, if the Fed does not cooperate, then implementing tariffs could trigger more restrictive monetary policies, negating the intended benefits of the tariffs. In this scenario, tariffs become counterproductive. Unless, of course, tariffs are weaponized for the sake of not only external but also internal politics.

As a geopolitical tool, tariffs might have some effectiveness, but history shows that when ‘national pride’ is at stake, rational considerations often go out the window. No local politician wants to be publicly humiliated by yielding to Trump’s tariff threats for any extended period. Thus, tariffs would be counterproductive in that context as well.

Ultimately, we are left with the reality of political games and pure populism boosting approval ratings. In this regard, tariffs may serve a purpose, but they don’t solve the underlying issues.

FYI: Services account for a growing share of global trade but commodities still dominate it, accounting for the 75–80%. This includes goods like raw materials (minerals, agricultural products), manufactured goods, and fuels. However, globally, manufacturing contributes approximately only 15–17% to global GDP. So, surprisingly, commodities tariffs influence on stocks markets worldwide might be very limited.

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Wednesday

On Wednesday, stocks ended mixed, pressured by core inflation rising by 0.5%, but supported by House Speaker comments regarding tariff exemptions. The dollar strengthened following the CPI report. The EU Market Index reached a 25-year high, as European stocks outperformed American equities due to Trump’s economic policies. BTC, ETH, and SOL remained in a bearish trend.

Details

Annual inflation rose to 3% in January, exceeding forecasts and December’s 2.9%, signaling stalled progress. Energy costs increased 1%, while core inflation climbed to 3.3%. Shelter and transportation costs drove the rise.

Crypto

Robinhood’s Q4 crypto trading volume soared 400% to $70B, driven by BTC surpassing $100K and renewed crypto interest. Total transaction revenue doubled to $672M, with crypto revenue surging 700% to $358M and equity revenue up 144% to $61M.

World Markets

European stocks hit new highs as strong earnings offset Fed hawkishness. The STOXX 50 gained 0.3%, nearing a 25-year peak, while the STOXX 600 edged up 0.1%. Heineken, Kering, and banks like Santander led gains.
India’s industrial production grew 3.2% YoY in December 2024, below forecasts of 3.9%, slowing from November’s revised 5%. Manufacturing eased to 3%, while mining and electricity rose.

Currencies

The dollar index neared 108.5, its highest in over a week, as CPI data revealed rising inflation, with headline at 3% and core at 3.3%. The Fed remains cautious on rate cuts, with Powell reiterating no rush. Traders expect only a 25 bps cut by December. Trump urged lower rates, linking them to tariffs.

Comment: What’s Up With AI?

We — those of us who think for a living — are not all going to be unemployed because of AI. That belief is fundamentally misguided. Throughout history, new technologies have never resulted in a net loss of jobs. Instead, they have always prompted people to acquire new skills, and the number of jobs has only increased.

Consider the transition from typewriters to computers. One person with a typewriter has evolved into several individuals: those who input text (analysts), correct it and add images (assistants), create PowerPoint presentations and spread it (consultants). The same dynamic will occur with AI. For every person who currently generates analytical reports, there will be many others involved in sorting and fine-tuning information for AI (training it), crafting prompts, and interpreting its results.

So, analysts, secretaries, and traders can relax. Do not buy into the mainstream media hysteria — AI is not coming for your jobs, not yet 🙂

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Thursday

On Thursday, stocks closed higher despite rising producer inflation and falling jobless claims, reinforcing the Fed’s hawkish stance. European equities rallied on hopes for a war resolution after Trump’s press conference. EU manufacturing slowdown continued but decelerated. BTC, SOL, and ETH fluctuated in bearish territory.

Details

Annual core producer inflation was 3.6% in January, slightly below December’s revised 3.7% but above market forecasts of 3.3%.
Initial jobless claims dropped to 213K in early February, below forecasts, signaling labor market strength.

World Markets

Eurozone industrial production fell 2.0% YoY in December 2024, less than the expected 3.1% decline. European stocks surged on strong earnings and hopes for a Ukraine conflict resolution. The STOXX 50 hit a 25-year high, rising 1.7%, while the STOXX 600 gained 1.1%. Autos and tech led gains.
Japan’s producer prices rose 4.2% YoY in January, the highest since May 2023, marking the 12th straight month of producer inflation.

Comment: What’s Up With Inflation?

This fourth uptick in annual inflation could indeed be a game changer for crypto. Inflation crossing 3% sends a strong signal to the Fed that its easing policy must not only be halted but also reversed. Of course, the Fed bears responsibility for the inflation itself, as all business owners have simply priced in the Fed’s rates and passed those costs on to consumers. Naturally, trade wars and the endless geopolitical havoc also do not help to ease food and energy prices. With the economy, particularly the manufacturing sector, continuing to slow down, it appears my predictions from nearly two years ago have come true: we are entering an era of prolonged stagflation. This could have mixed implications for crypto, depending on the Fed’s actions.

If the Fed reverses its policy and begins tightening on its nearest meetings, it could trigger a new bear market for stocks, which would likely affect crypto as well. This is currently the most probable outcome. The less likely scenario is that the Fed will maintain rates at their current level for two to four sessions, till, roughly Q4. If that happens, we may have a bit more time to take profits.

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Friday

On Friday, markets closed mixed as retail sales plummeted due to cold weather and LA fires, while manufacturing continued to decline. The dollar and oil fell on prospects of EU peace talks and delayed reciprocal tariffs. Europe’s GDP rose, though the German economy remained stagnant. Chinese banks issued a record amount of new loans as the PBoC pledged economic stimulus. Argentina’s inflation fell tenfold compared to a year ago due to Milei’s reforms. BTC, ETH, and SOL showed technical gains.

Details

Retail sales fell 0.9% in January, the largest drop since March 2023, missing forecasts of a 0.1% decline.
Manufacturing production rose 1% YoY in January, rebounding from a 0.1% decline.

World Markets

Chinese banks issued a record CNY 5.13T in new loans in January, driven by policy stimulus. Eurozone GDP grew 0.9% annually in Q4 2024, the fastest expansion since early 2023. Argentina’s annual inflation slowed to 84.5%, the ninth straight decline.

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On Week 8, investors will focus on FOMC minutes, Fed speeches, and housing data, alongside S&P Global PMI and Trump’s new tariff initiatives. Global highlights include rate decisions in Australia, New Zealand, and China; inflation data from Canada, UK, South Africa, and Japan; and PMI figures for major economies.

Evernomics — Digital Wealth Growth Intellectual Contracts Platform — is your way to invest in your bright future without hassle. For more reports:

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SVET Markets Weekly Update – February 3rd–7th, 2025

On Week 5, Trump’s tariffs were front and center, moving markets up and down depending on geopolitical maneuvering as he threatened, imposed, or postponed levies on Mexico, Canada, China, Brazil, and the EU. The dollar index fluctuated between 108 and 110 before reaching a two-week high. Gold hit new all-time highs, while economic growth slowed, and the trade deficit widened to its highest level since March 2022. The unemployment rate dropped to 4%, strengthening Powell’s hawkish stance, leading to a sharp market correction on Friday. BTC, SOL, and ETH entered a technically bearish zone. The global economy continued to weaken, with more central banks, including Britain and India, shifting to a dovish stance.

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Monday

Markets opened with a sharp drop but closed higher after Trump delayed the introduction of tariffs. However, the threat of retaliation continues to weigh on sentiment. PMI data showed manufacturing growth for the first time in two years, strengthening the position of FOMC hawks. The dollar and oil prices fluctuated due to Trump’s shifting tariff stance and pressure on OPEC. Gold reached a new all-time high amid market volatility, while EU inflation rose due to higher energy costs. Lumber and gas prices surged, correlating with imports from Canada and Mexico. BTC reclaimed the $100K level, and ETH rebounded to $3K after a sharp correction, fueled by speculation about politically affiliated funds accumulating ETH.

Details

The ISM Manufacturing PMI climbed to 50.9 in January, up from 49.2 in December, marking the first expansion after 26 months of contraction. New orders, production, and employment rose, while inventories fell and price pressures increased.

Crypto

Trump’s World Liberty Finance bought 86K ETH (worth $220M) in eight hours, raising its total ETH holdings to $420M. The purchase, made during a market downturn, has sparked speculation about strategic timing. ETH now represents 65% of its portfolio.

World Markets

The Eurozone Manufacturing PMI for January rose to 46.6, marking the slowest decline since May 2024. Output and new orders fell at a slower pace, but job losses accelerated. Input costs rose, while output prices remained unchanged. Business sentiment improved, reaching its highest level since February 2022.

Euro Area inflation rose to 2.5% in January, up from 2.4% in December, exceeding expectations. Energy costs surged, while services and food inflation slowed. Core inflation held at 2.7%, its lowest since early 2022.

Currencies

The dollar index fluctuated after Trump delayed Mexico tariffs, easing fears of trade barriers. Meanwhile, ISM data showed factory activity expanding for the first time in over two years, challenging expectations of Fed rate cuts.

The South African rand fell 2% to around 19 per USD after Trump halted aid, citing concerns over land reforms and policy stability. Ongoing power outages continue to hinder economic growth.

Commodities

Gold hit a new record $2,820 per ounce as trade uncertainty persisted. Trump delayed Mexico tariffs but imposed levies on China and Canada, fueling safe-haven demand. Markets expect two Fed rate cuts this year.

WTI crude futures hovered near $73 per barrel as OPEC+ confirmed gradual output hikes. Trump urged OPEC to boost supply to counter high prices, while new tariffs added trade uncertainty.

Lumber futures surged above $630 per thousand board feet after Trump imposed tariffs on Canada, a key supplier. The 25% tariff, combined with existing duties, pressures domestic supply. Meanwhile, Fed rate cut expectations eased mortgage rates below 7%, supporting construction demand.

Natural gas futures surged 10%, recovering from last week’s decline. Tariffs on Canadian and Mexican oil raised concerns about supply disruptions. The EIA reported a significant gas withdrawal due to extreme cold weather.

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Tuesday

Equities closed higher as weaker job openings data and falling factory orders fueled optimism about potential rate cuts. Gold hit another all-time high due to tariffs and central bank easing. The Indian rupee devalued amid capital outflows, while China’s yuan weakened. BTC, SOL, and ETH began recovering from the Feb 2 flash crash.

Details

Job openings fell to 7.6M in December 2024, missing expectations. Decreases were seen in professional services, healthcare, and finance, while hires increased.

Manufactured goods orders fell 0.9% to $578.5B in December 2024, the sharpest decline since June, driven by a drop in transportation and primary metals.

Crypto

ETH ETF trading volume surged to a record $1.5B, up 23% from its previous high. BlackRock’s ETHA led with $736M in trades, while spot ETH ETFs saw $84M in net inflows, totaling $10B in assets.

Currencies

The offshore yuan fell to 7.32 per dollar as China imposed tariffs on U.S. imports, including coal, LNG, crude oil, and cars, retaliating against Trump’s levies.

The Indian rupee slipped to 87.07 against the USD as China’s retaliatory tariffs weighed on emerging markets. Crude oil’s rise and foreign outflows added pressure.

Commodities

Gold reached a new all-time high above $2,840 per ounce, driven by safe-haven demand amid escalating trade tensions. Weak job openings data and falling factory orders further boosted gold.

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Wednesday

Equities rose as falling business optimism and slowing services growth fueled expectations of Fed easing. Nvidia and Amgen surged, while Alphabet and AMD dropped on weak earnings. Imports hit a record high amid tariff expectations. EU private businesses showed growth for the first time in six months, while China’s services sector slowed.

Details

Private businesses added 183K jobs in January, surpassing forecasts. Services led with 190K hires, while goods-producing sectors lost jobs.

The trade deficit widened to $98.4B in December, the highest since March 2022, as imports surged while exports fell.

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Thursday

Markets ended mixed, with the S&P and Nasdaq rising while the Dow fell. Bank stocks gained, while Ford and Honeywell declined. The dollar rose after a comment by Bessent prioritizing lower Treasury yields over Fed rate cuts. The Bank of England and the Bank of Mexico cut rates in response to slowing economies. Chinese tech stocks rallied, fueled by enthusiasm for local AI advancements.

Details

Job cuts rose to 49,795 in January, up from December but down 40% YoY. The tech sector led in layoffs.

Initial jobless claims rose to 219K, exceeding forecasts, with increases seen in New York and California.

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Friday

Markets declined due to additional tariff threats and rising unemployment, while consumer sentiment dropped to a six-month low. The dollar rose on tariff concerns. The Reserve Bank of India cut rates for the first time in five years. BTC, SOL, and ETH traded lower, with some traders turning bearish.

Details

The unemployment rate fell to 4.0% in January, with 6.85M unemployed. Employment rose slightly, and labor participation hit 62.6%.

The University of Michigan consumer sentiment index dropped to 67.8 in February, the lowest since July 2024, driven by concerns over rising prices.

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On Week 7, investors will focus on the CPI report, Powell’s congressional testimony, producer prices, retail sales, and industrial production. Earnings from McDonald’s and Coca-Cola will be watched. Globally, key data includes China’s CPI and PPI, UK and Euro Area GDP, and rate decisions in Russia and the Philippines.

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