Financial Markets
The US equity market started the week on a neutral note, but on Friday things changed. This week the S&P500 and
the NASDAQ
100 lost 1.7% and 2.3%, respectively. The small
cap
index (Russel 2000) was even weaker and dropped 3.7%. Trading volumes were average.
The
metals were strong: gold
and silver gained 1.8% and 0.9%, respectively. Gold closed the week at
2935$, another all-time-high. Gold may continue up to 3k$, a round number, but silver has resistance at 33$.
WTI closed the week at 70.2$/bbl, and is still at a support level – if it breaks down, the next target is 67$.
Bitcoin was unchanged, and continues trading in the 91-109k$ range.
The
relative
strength of the US dollar (DXY) fell just slightly this week and is around ~106.6. The
EUR/USD is around 1.045$, the GBP/USD is at 1.263$, and the USD/JPY is at
149.22 JPY.
US M2 money supply at the date of 30th December 2024 was up by 0.4%. We are waiting for the January 2025 update.
The
national financial
conditions index (NFCI) for the week of 10th February 2025 loosened by
0.7%, a slow but continuous loosening of financial
conditions in the beginning of the month. Note that this indicator is
delayed by a week.
US
bond yields were slightly down this week, and now sit at 4.198% for the
2-year
and 4.431% for the 10-year.
The VIX jumped higher on Friday, to ~20, due to the selloff on the stock market. The VIX could easily reach 20-23 during the next weeks,
indicating a growing fear and search for put
options from the part of investors/speculators.
Comment Section
highlight of the week was the release of the S&P Global US Composite PMI on Friday. The number (50.4) was way below expectations, indicating a stagnating US economy. The report shows a contraction in services output, new order growth weakening, and employment edging lower amid rising uncertainty and cost concerns. On the price front, input cost inflation accelerated to its highest level since last September, while selling prices saw their slowest increase in three months. Finally, business optimism about the coming year slumped, amid concerns over federal government policies related to domestic spending cuts and tariffs, as well as worries over higher prices, and broader geopolitical developments.
money on the sidelines to take advantage of further increases in
volatility.
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