Financial Markets
The US equity market sold off during most of the week, recovering partially on Friday. This week the S&P500 and
the NASDAQ
100 lost 1% and 3.4%, respectively. The small
cap
index (Russel 2000) was down only 1.5%. Trading volumes were considerably above average, indicating that sentiment might be changing to bearish.
The
metals were weaker this week. Gold
and silver lost 2.7% and 4%, respectively. In times of fear, cash is king, and precious metals are not immune to a selloff in the short term. Gold didn’t reach the 3k$ level, and may not get there before a pullback and/or consolidation around current levels.
WTI was unchanged and is at 69.9$/bbl. The next support level is 67$.
Bitcoin fell a whopping 11.7%, and has the next support level around 74k$.
The
relative
strength of the US dollar (DXY) increased to 107.6. The
EUR/USD is around 1.037$, the GBP/USD is at 1.257$, and the USD/JPY is at
150.61 JPY.
US M2 money supply at the date of 27th January 2024 was flat, which could be a bearish sign, together with the recent selloffs.
The
national financial
conditions index (NFCI) for the week of 17th February 2025 tightened by 2.3%, another bearish sign! Note that this indicator is
delayed by a week.
US
bond yields were down significantly this week, and now sit at 3.987% for the
2-year
and 4.203% 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 rose to ~22 during the week, but on Friday the markets were green and the VIX closed at 19.6. Now, premiums and fear in the market are reaching a healthier level and are not subdued.
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