Financial markets 01/04/2025
Stock markets corrected again last week due to the uncertainty generated by the Trump administration since the beginning of his term in office. April 2 is the date chosen to announce the tariffs that the United States will impose on the rest of the world, a circumstance that is notably affecting both global economic growth forecasts and the expectations that US citizens themselves have about how their consumption capacity will be affected. Proof of this are the data from i) The Conference Board, which fell to 92.9 points compared to a forecast of 94.2 and the previous figure having been revised downwards, and ii) the University of Michigan’s survey of consumer expectations stood at 52.6 compared to the forecast of 54.2 and the previous figure of 64. The conclusion that investors seem to be reaching is that, in the face of so much noise generated by the government, economic growth forecasts are going to be affected and some are even betting again on the possibility that the United States could enter a recession.
The markets started the week with falls, thus continuing the trend seen in previous sessions, when the S&P 500 dropped 1.53% to end the week at 5,580.94 points, while the technology sector suffered to a greater extent as the Nasdaq 100 closed at 19,281.40 points, or 2.39% lower. In Europe, the falls were similar, with the Euro Stoxx 50 dropping 1.65% and the Ibex 35 once again standing out with a minimal decline of 0.36%.
The deterioration of economic expectations once again led to a turnaround in forecasts regarding the decisions to be taken by central banks, which currently stand at three rate cuts in 2025 for the ECB and the FED. This slightly eased interest rates on government bonds, which closed flat for the 10-year Treasury at a yield of 4.25%. The Bund and Bond fell 4 bps to close respectively at 2.73% and 3.36%.
Commodities maintained the previous week’s uptrend and gold again set a new all-time high at 3,130.50 USD/Onz to end the week up 2.57%. Fears of a possible recession in the United States and a worsening of international relations due to the tariff war provoked by Trump, continue to favor gold as a safe haven. Brent also became more expensive, closing at 72.76 USD/b, especially due to the low inventory levels recorded in the United States.
Throughout the week we will know several macroeconomic data that will indicate the potential risk of a slowdown in global economic growth, and among the most important publications are the PMIs of China, Europe and the United States. In Europe, we will also see the CPI data for March and the minutes of the last ECB meeting. And in the US we will be closely watching Jerome Powell’s conference on Friday and the battery of employment-related data to be released throughout the week, with a special focus on the unemployment rate and nonfarm payrolls due on Friday.
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And we bid farewell with the following quote from Dieter Duhm, sociologist, psychoanalyst, art historian and author, co-founder of Tamera, a peace research center in southwestern Portugal: “it is not terror and violence, but trust and solidarity that will guide the new world.”
Summary of the performance of major financial assets (3/31/2025)
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