SVET Markets Weekly Update (April 28 — May 4, 2025)
On Week 18, major stock indexes are up due to progress in trade talks and earnings reports. Crypto continued to rise throughout the week, roughly following the stock market.
On Monday, stocks wavered as the manufacturing activity index hit a low not seen since May 2020. Production edged down, while new orders and shipments fell sharply. Sentiment weakened, and outlook uncertainty rose. Employment dipped slightly, and cost pressures increased. The services index fell to its lowest level since October 2023, signaling worsening conditions. Revenue edged up, but employment weakened. Outlook uncertainty hit a mid-2022 high, while price pressures intensified. The Home Index climbed in February, marking the sharpest monthly rise since May 2024. The crypto market was uncertain, similar to equities.
On Tuesday, equities in green as weak economic data bolstered rate-cut expectations. Job openings missed forecasts, while corporate earnings lifted Pfizer and Honeywell. Trade uncertainty hit UPS and GM, as tariffs pushed the trade deficit to a record high. Goods trade deficit hit a record $162B in March 2025, surpassing forecasts, as firms rushed imports ahead of potential tariffs. Imports surged 5% monthly (30.8% annually), outpacing exports’ modest 1.2% gain. Eurozone inflation expectations rose in March, with the 1-year outlook hitting 2.9% (highest since April 2024) and the 3-year forecast reaching 2.5%. Eurozone economic sentiment missed forecasts and hit a 4-month low. Confidence declined across all sectors, with consumers showing particular pessimism. Crypto market rose with stocks.
On Wednesday, Stocks extended gains to seven sessions despite a surprise 0.3% contraction in Q1 GDP. Core PCE inflation (the Fed’s preferred gauge) was flat in March 2025, missing forecasts of a slight increase. Annual growth slowed to 2.6% — the weakest since March 2021 — from February’s 3%. The private sector added just 62K jobs in April 2025 — the weakest growth since July 2024 — far below forecasts of 115K and the prior month’s 147K. Hiring slowed in services (particularly in education and health) with a decline of 23K, but rose in construction by 16K. Economists cited policy uncertainty weighing on labor demand.
World’s Markets:
- The Eurozone economy grew 1.2% year-over-year in Q1 2025, in line with Q4 2024 and above the 1% forecast. Germany’s GDP shrank 0.2%, while France and Italy grew by 0.8% and 0.6%, respectively. Spain led with 2.8% growth.
Commodities and Currencies:
- The dollar index rose to 99.8, extending gains on trade deal optimism after Trump hinted at agreements with India, Japan, and South Korea. The rally persisted despite Q1’s surprise 0.3% contraction in US GDP — the first in three years — driven by weak spending and surging imports.
Crypto:
- Crypto markets remained in an accumulation mode.
The State Of Markets: Up, on trade optimism and earnings.
On Thursday, stocks went red as job cuts fell 62% (April vs March), but remained 63% higher than April 2024 — the highest April total since 2020. Government, tech and retail led 2025’s cuts, with firms citing economic uncertainty and tech adoption. Manufacturing PMI dipped to 48.7 in April 2025, marking a second contraction month. Output fell sharply while prices rose. Trade disruptions hurt exports, though job losses slowed. Manufacturers cited tariff pressures and volatile demand. Crypto markets grew, continuing to recover after Trump tariff’s crush.
On Friday, stocks surged as strong jobs data and easing China trade tensions fueled optimism. The S&P notched a 9-day rally — its longest in 20 years. Unemployment held at 4.2% in April 2025, matching forecasts. Joblessness rose with the U-6 jobless rate dipping to 7.8%. Eurozone inflation held at 2.2% in April 2025, slightly above forecasts (2.1%) and ECB’s target. Soaring service costs offset falling energy prices, while core inflation rose to 2.7% from 2.4%. Monthly prices grew 0.6%. Global food prices rose 1% in April 2025, marking a 3-month uptrend. Cereals, dairy, and meat (led by pork) drove gains, while sugar and vegetable oils declined. Crypto market rose, following stocks.
On Week 19, markets await China trade talks, the Fed’s rate decision, and Q1 earnings. Key data includes ISM Services PMI and global trade figures. Rate decisions are due from the UK, Brazil, Poland, and Norway, while inflation reports will be watched in Switzerland, Turkey, and Mexico.