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Week in Review: 10-14 March 2025

Financial Markets

This week the S&P500 and the NASDAQ 100 lost 2.3% and 2.5%, respectively. The small cap index (Russel 2000) was down 1.9%. Trading volumes continue above average, indicating a widespread selling pressure.

The metals continued strong this week. Gold and silver gained 2.6% and 4.1%, respectively. For a moment, gold surpassed the key level of 3000$. What a bull run!

WTI went up and down during the week, but ended unchanged, still around 67$/bbl. If it continues falling, the next support levels are at 64 and 62$.

Bitcoin recovered 3.8% after the massive fall last week. If it continues falling, it should have some support around 74k$.

The relative strength of the US dollar (DXY) fell slightly, to 103.7. The EUR/USD is around 1.088$, the GBP/USD is at 1.294$, and the USD/JPY is at 148.062 JPY.

US M2 money supply at the date of 27th January 2025 was flat, which could be a bearish sign, together with the recent selloffs.

The national financial conditions index (NFCI) for the week of 3rd March 2025 tightened by 3.6%, another bearish sign which followed the equity market action. Note that this indicator is delayed by a week.

US bond yields increased slightly this week, and now sit at 4.091% for the 2-year and 4.32% for the 10-year. These are below the current FED funds rate, showing that investor expectations favor a decrease in interest rates, and lower inflation.

The VIX spiked up to 29, but closed the week lower, at ~22, due to the positivity on Friday.  Now, premiums and fear in the market are at healthier level and are not subdued.


Comment Section

The correction in the US equity markets ensued, with a minor positive reaction on Friday. The consumer sentiment in the US is plummeting, which together with the uncertainty around tariffs and the economy can continue to shake the markets.

Historically, the beginning of the last recessions has coincided with the time the FED starts cutting rates. The FED has started cutting a few months ago, and should cut more in 2025. Let's hear what Jerome Powell has to say next week!

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