Financial markets 13/05/2025
After several weeks of strong movements in the financial markets it seems that managers took a few days off to analyse valuations and macroeconomics in more detail, which resulted in minimal changes in asset prices. The Fed did not surprise and acted as the market was discounting by leaving the US monetary policy rate unchanged at 4.50%, a circumstance that will not change until July at the earliest if the geopolitical situation evolves reasonably. In this sense, the UK has been the first major economic bloc to reach an agreement with Trump, which could lead to new agreements materialising in the coming days, a condition that would help to improve the market outlook. For now, it seems that Europe may take the longest time to reach this long-awaited trade agreement, following the progress made with China over the weekend.
Stock markets experienced minimal changes in the last seven days, the S&P 500 gave up 0.47% to close at 5,659.91 points while technology stocks only lost 0.20% for a Nasdaq 100 closing at 20,061.45 points. In Europe the result was more positive, the Euro Stoxx 50 gained 0.49% and the Ibex 35 gained 0.72% to end at 5,310.95 and 13,543.10 points respectively. Both the Ibex 35 and the DAX 40 performed well, with both indices setting new annual highs during the week, i.e. they have recovered all of the correction that occurred since the highs seen in February.
The same was true of the bond markets. The yield on the 10-year Treasury rose 7 bps to 4.38% while the Bund and the Bond rose 2 bps to 2.54% and 3.19% respectively. The market consensus has lowered expectations for rate cuts for the remainder of the year, especially in the US.
The main indicator of the uncertainty still prevailing in the markets continues to be gold, which after two weeks of declines has once again increased its price by 2.62% to close at 3,330.40 USD/Onz, commercial risks aside, what has recently been noted is that the central banks continue to buy gold as a strategic reserve, a circumstance that will not favour significant corrections in the price, at least in the short term. For its part, crude oil experienced a significant rise of 4.27% which led Brent to close at 63.91 USD/b, adjustments between supply and demand and changes in growth forecasts generated a rebound from 59 USD/b, the year’s lows.
At the macroeconomic level, there is little to expect during the week. In Europe, the ZEW investor confidence data (March industrial production), the first revision of 1Q25 GDP (1.2%) and the update of the European Union’s economic forecast report will be published. In the US, April CPI and PPI data, April retail sales (+0.1% estimated) and the Philadelphia Fed manufacturing index will be released.
As for corporate results for the first quarter, more than 90% of the S&P 500 companies have already reported their results. The average EPS growth reported is 13% (14.3% in 4Q25) against the 6.7% estimate, with 77% positive surprises and 19% disappointing the consensus. Corporate results clearly support markets, but the impact generated by tariffs on investment decisions, hiring and financial results themselves remains to be seen in the coming quarters.
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And we leave with the following quote from Robert Francis Prevost, Pope Leo XIV, 267th pope of the Catholic Church: «We must be able to listen to one another, to recognise that it is not about discussing a political agenda or simply trying to promote the issues that interest me or others. Sometimes it seems that we want to reduce everything to wanting to vote «.
Summary of the performance of the main financial assets (12/5/2025)
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This document has been prepared by Portocolom Agencia de Valores S.A. for the purpose of providing general information at the date of issue of the report and is subject to change without notice. Portocolom Agencia de Valores S.A. assumes no obligation to communicate such changes or to update the contents of this document. Neither this document nor its contents constitute an offer, invitation or solicitation to purchase or subscribe for securities or other instruments or to make or cancel investments, nor may they form the basis of any contract, commitment or decision of any kind.
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