Market Recap: 9-13 June 2025
Financial Markets
US Stock Market
This week was essentially neutral for the overall equity markets with the S&P500 and the NASDAQ 100 losing 0.4% and 0.6%, respectively. The main indices are now above the 200-day moving average and we approach the all-time-highs. The small cap index (Russel 2000) was down by 1.6% and bounced from the 200-day moving average, which acted as resistance. Trading volumes were average.
COMMODITIES
Precious metals gained this week. Gold and silver were up by 3.8% and 0.9%, respectively. Gold is starting to push up again into the previous all-time high! If gold corrects, the first target should be around 3000$/oz. Silver might stay above 35$/oz, which should act as support for the time being.
WTI crude oil jumped to 72.9$/bbl on worries due to the Israel-Iran conflict. The trading range for the near future will likely be 67-75$/bbl.
Bitcoin was unchanged this week. For the next weeks, the key resistance and support levels on Bitcoin, are 112k$ and 92k$, respectively.
US DOLLAR, MONEY SUPPLY
The relative strength of the US dollar (DXY) dropped to ~98. The EUR/USD is around 1.155$, the GBP/USD is at 1.357$, and the USD/JPY is at 144.12 JPY.
US M2 money supply at the date of 28th April 2025 was up by 0.72%, showing a slow increase over the previous month – credit institutions didn’t stop lending so far. If the money supply was going down, it would be another warning sign for the economy and equities.
The national financial conditions index (NFCI) released on 2nd June 2025 loosened by 4%. Note that this indicator is delayed by two weeks. Positive numbers in the NFCI mean tighter financial conditions, while negative numbers indicate looser financial conditions.
BONDS AND OPTIONS
US bond yields fell slightly this week. Yields now sit at 3.950% for the 2-year and 4.409% for the 10-year. As you can see, the yield curve has uninverted since a year ago, and lower yields are expected in the next few years, likely as a consequence of a recession and interest rate cuts. However, long-term growth and inflation expectations are about 4.9%.
The VIX closed the week at ~20.8, a slight increase relative to the previous period. Risk premiums in the options market are moderate. Similarly to previous weeks, it is our opinion that the overall risk in the stock market (high valuations in the big caps) and uncertainty about the US and worldwide economy is considerable. Thus, any equity purchases must be strategic and opportunistic!
Comment Section
The US equity markets are holding for the moment and financial conditions are not tight.
An Israel-Iran conflict sparked this week. Israel attacked Iran’s energy industry and defence ministry on the third day of an escalating conflict, as several Iranian missiles evaded Israeli air defences to hit a refinery and rip through a high-rise apartment block south of Tel Aviv…
President Donald Trump on Wednesday said he was very happy with a trade deal that restored a fragile truce in the U.S.-China trade war, a day after negotiators from Washington and Beijing agreed on a framework covering tariff rates. The deal also removes Chinese export restrictions on rare earths minerals and allows Chinese students access to U.S. universities. Trump says US tariffs will be set at 55%, China’s at 10%.
In the US, inflation figures came below expectations, at 0.1% MoM and 2.4% YoY, feeding the confidence that inflation is under control (we agree with this perspective).
As we have been saying, some damage to the economic activity was done in April-May 2025 and that will be reflected in the next earnings season (Q2 2025), but by the end of the year we might look back and conclude that it was not very serious. If we had to forecast, we would say this year we will likely see a sideways equity market, with alternating waves of optimism and pessimism. At the moment we don’t have a particularly positive or negative bias.
Have a nice weekend, and good luck!!!