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Week in Review: 10-14 February 2025

Financial Markets

The US equity market continues trading mostly sideways. This week the S&P500 and the NASDAQ 100 gained 1.5% and 2.9%, respectively. The small cap index (Russel 2000) was essentially flat. Trading volumes were slightly higher than average.

The metals were positive: gold and silver gained 0.8% and 1.1%, respectively. Gold closed the week at 2882$, another all-time-high. However, Friday was weak for the metal and the rally may be losing a bit of momentum. Silver encountered resistance at 33$ and seems to be topping out at current levels.

WTI closed the week at 70.49$/bbl, a short term support, but may fall down to 67$ in the next weeks.

Bitcoin has risen 1.33% for the week, and continues stuck in the range 91-109k$.

The relative strength of the US dollar (DXY) fell again this week (~107). The EUR/USD is around 1.049$, the GBP/USD is at 1.259$, and the USD/JPY is at 152.28 JPY.

US M2 money supply at the date of 30th December 2024 was up by 0.4%.

The national financial conditions index (NFCI) for the week of 3rd February 2025 loosened by 0.72%, showing a slow but continuous loosening of financial conditions. Note that this indicator is delayed by a week.

US bond yields were down slightly this week, and now sit at 4.261% for the 2-year and 4.478% for the 10-year.

The VIX gradually fell during the week, ending at ~14.8, which can be considered a low level, indicating a moderation in fear and search for put options from the part of investors/speculators.


Comment Section

The highlight of the week was the hotter-than-expected CPI and PPI prints. However, this is just one data point and it's too soon to conclude that we are going to experience a resurgence of inflation - we probably aren't. 
 
Anyway...the market continues trading sideways. Maybe it's too soon for a correction, but it may also be too late to buy the whole market and the mega caps. Value investing or dollar-cost-averaging might still make sense, though. Exert caution. If you are an option seller, keep some money on the sidelines to take advantage of a possible increase in volatility.
 

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