Weekly Markets Newsletter 17th February 2025 by Charlotte St Felix



Market Recap: February 10 – February 16, 2025

Global Equities

United States:

S&P 500: +1.5%, closing at 6,115 (vs -0.24%, closing at 6,025.99 the week prior), as markets rebounded after President Trump delayed new global tariffs.

Nasdaq Composite: +2.6%, ending at 20,027 (vs -0.53%, closing at 19,523.40 the previous week), driven by strength in AI and tech stocks.

Dow Jones Industrial Average: +0.5%, closing at 44,546 (vs -0.54%, closing at 44,303.40 the week prior), as easing trade tensions lifted investor sentiment.

Europe:

FTSE 100: +0.4%, closing at 8,732 (vs +0.31%, closing at 8,632.20 the week prior), as UK GDP growth surprised to the upside.

CAC 40: +2.6%, ending at 8,179 (vs +0.29%, closing at 7,802.50 the previous week), supported by optimism over strong corporate earnings.

DAX 40: +3.3%, closing at 22,513 (vs +0.25%, closing at 16,361.25 the week prior), buoyed by hopes for an end to the Russia-Ukraine conflict.

Asia-Pacific & Emerging Markets:

Hang Seng Index: +7.0%, reaching 22,620 (vs +7.0% the week prior), as AI-related tech stocks surged.

Shanghai Composite: +1.3%, closing at 3,347 (vs +1.2%, closing at 3,300 the previous week), as hopes for milder US tariffs on China lifted sentiment.

MSCI Emerging Markets Index: +1.5%, benefiting from strong performances in China, South Korea, and Brazil.

Fixed Income

U.S. Treasury Yields: The 10-year yield fell -2bp to 4.48% (vs 4.50% the previous week), despite higher-than-expected inflation data.

UK Gilts: The 10-year gilt yield increased +2bp to 4.50% (vs 4.48% the week prior), as BoE policymakers remained cautious about rate cuts.

German Bunds: The 10-year bund yield rose +6bp to 2.43% (vs 2.37% the previous week), reflecting strong GDP data and shifting ECB expectations.

Commodities

Gold: +0.5%, reaching $2,901 per ounce (vs $2,780.50 the prior week), driven by inflation concerns and safe-haven demand.

Oil: +0.1%, with Brent crude trading at $74.74 per barrel (vs $75.50 the prior week), as OPEC considered further production cuts.

Copper: +0.8%, closing at $9,485 per ton, reflecting stronger industrial demand and supply constraints.

Cryptocurrency

Bitcoin (BTC): As of February 17, 2025, Bitcoin (BTC) is trading at approximately $96,168, reflecting a slight decrease of 0.01% from the previous close. The day's trading range has seen a high of $97,386 and a low of $95,859.

Recent market analyses indicate a cautious sentiment among investors. BCA Research, after a two-year bullish stance, now signals a potential market peak, citing over 90% of Bitcoin holdings currently in profit—a historical indicator of possible downturns.

Additionally, legislative developments across 18 U.S. states propose establishing state-level Bitcoin reserves, which could introduce approximately $23 billion into the market if enacted.

Economic Indicators

United States:

Inflation (CPI): +0.5% m/m, +3.0% y/y (vs 0.4% m/m, 2.9% y/y in December), exceeding expectations, driven by higher shelter costs.

Inflation (PPI): +0.4% m/m (vs +0.3% expected), with signs of cooling in health care and airfare components.

Federal Reserve Policy: Fed Chair Powell stated that while inflation is moderating, rates must remain restrictive for now.

United Kingdom:

GDP Growth: +0.1% in Q4 2024 (vs -0.1% expected), lifted by strong services and construction activity.

Bank of England: Chief Economist Huw Pill warned that rate cuts should proceed cautiously, despite MPC member Catherine Mann favoring a larger cut due to a weakening labor market.

Eurozone:

Industrial Production: -1.1% m/m in December (vs -0.5% expected), dragged down by an -8.0% drop in capital goods output.

GDP Growth: +0.1% q/q in Q4 2024 (vs stagnation expected), bringing full-year growth to 0.7%.

Geopolitical Events

US Tariffs: Trump delayed new tariffs, opting for country-specific trade policies by April 1, easing investor concerns.

U.S.-Russia-Ukraine Peace Talks: The United States and Russia are set to engage in peace negotiations concerning the ongoing conflict in Ukraine. Notably, these talks exclude both European nations and Ukraine itself, leading to significant concern among European leaders about being sidelined in decisions impacting regional security. In reaction to their exclusion, European leaders are convening an emergency summit in Paris to discuss a unified strategy and assert their interests in the peace process. This development underscores potential shifts in geopolitical alliances and could have profound implications for European markets.

As we enter the week of February 17 to February 23, 2025, several key events are poised to influence global financial markets:

Corporate Earnings Reports:

Walmart: The retail giant is scheduled to release its fourth-quarter earnings on Thursday. Investors will scrutinize these results for insights into consumer spending trends amid ongoing inflationary pressures.

Alibaba and Baidu: Both Chinese tech behemoths are set to report earnings this week, offering a glimpse into China's economic resilience and the tech sector's performance.

Other Notable Reports: Companies such as Arista Networks, Devon Energy, Medtronic, Occidental Petroleum, Analog Devices, Garmin, Block, Booking Holdings, and Newmont are also on the earnings calendar, providing a broad view across various sectors.

Federal Reserve Meeting Minutes:

On Wednesday, the Federal Reserve will release the minutes from its January meeting. Market participants will analyze these minutes for indications regarding the central bank's future monetary policy, especially in light of recent inflation data.

Economic Indicators:

Housing Data: The week will feature several housing-related reports, including the National Association of Home Builders' Housing Market Index on Tuesday, January housing starts on Wednesday, and existing home sales data on Friday. These releases will shed light on the current state of the U.S. housing market.

UK Inflation and Wage Growth: The UK's January inflation data is expected to show an increase to 2.8% from 2.5%, influenced by factors such as the introduction of VAT on private school fees and higher airfares. Additionally, wage growth data is anticipated to reflect a rise to 5.9% in the three months leading up to December.

Geopolitical Events:

European Political Climate: A snap election in Germany is drawing attention, with the far-right Alternative for Germany (AfD) expected to perform well. This development could have implications for both German and broader European political and economic stability.

As of February 17, 2025, diplomatic efforts are intensifying to address the ongoing conflict in Ukraine. Notably, China has proposed hosting a summit in Beijing involving U.S. President Donald Trump and Russian President Vladimir Putin to facilitate peace negotiations. This initiative underscores China's ambition to position itself as a key mediator in global conflicts.

However, this proposal has been met with skepticism from both the U.S. and European nations, primarily due to concerns over China's close ties with Russia and the exclusion of Ukrainian President Volodymyr Zelenskyy from the proposed talks. European leaders emphasize that any peace agreement must involve Ukraine to ensure its sovereignty and the interests of its people are adequately represented.

In parallel, President Trump has expressed a desire to engage in nuclear arms control discussions with both Russia and China, aiming to significantly reduce defense budgets and address the escalating costs associated with nuclear arsenals. This initiative reflects a broader strategy to de-escalate military tensions and reallocate resources to more productive avenues.

While these diplomatic overtures indicate a potential shift towards resolving the Ukraine conflict, the exclusion of key stakeholders and underlying geopolitical tensions present significant challenges. The international community remains watchful, recognizing that the outcomes of these discussions could profoundly impact global stability and the balance of power.

Astrological commentary

Last week, we anticipated significant volatility and aggressive geopolitical manoeuvres influenced by the Leo Full Moon forming a T-square with Uranus, which was in conjunction with Donald Trump's natal Ascendant and Mars. While events did not unfold in an immediately belligerent fashion, the unexpected shift toward peace talks between the U.S. and Russia aligns with the unpredictable nature of Uranus. Markets also ended a two-week losing streak, defying expectations of continued instability.

However, despite the apparent de-escalation, we believe this bilateral engagement between the U.S. and Russia—excluding Europe—will ultimately fuel greater geopolitical tensions. The reshuffling of global alliances is already taking shape, as European leaders express concerns over being sidelined in negotiations that directly impact their security. This is textbook Uranian disruption—unexpected shifts that challenge existing power structures.

Looking ahead, Mars turning direct on February 24 will gradually escalate tensions, setting the stage for increasing geopolitical frictions. We anticipate that these pressures will peak at the time of the Mars-Pluto opposition at the end of April, marking a pivotal moment of power struggles and strategic realignments in global politics.

In our 2025 Trends Report, we projected an underperformance in the defense sector, correlating with Saturn’s ingress into Aries in May 2025. Trump's latest pivot toward de-escalation and peace talks reinforces this view, as diplomatic initiatives reduce immediate defense spending incentives. This could weigh on U.S. defense stocks as investors begin to price in a more restrained military policy stance under Trump's leadership.

Pisces season, which will begin on February 19, carries a strong influence over commodities, particularly the oil and gas sector, as Pisces is associated with fluid resources, dissolution, and shifting global economic undercurrents. With Neptune—the modern ruler of Pisces—still transiting its home sign, there are multiple layers of uncertainty impacting the energy markets. Oil markets may experience speculative movements, price distortions, and shifts driven by sentiment rather than fundamentals, as Neptune tends to obscure visibility in markets.