Market Recap: 21-25 April 2025 - Gold Tops Out, US Stocks Recover (Bull Trap?), Consumer Confidence Down to 2022 Lows
Financial Markets
This week the S&P500 and the NASDAQ 100 recovered considerably and jumped by 5.6% and 6.4%, respectively. On the way up, the S&P may encounter resistance around ~5650. The small cap index (Russel 2000) was up by 3.8%. Trading volumes were average.
The price action on precious metals was also positive during the week, with gold reaching yet another all time high of 3500$. However, gold closed the week unchanged at ~ 3318$. In the near future gold may retrace back to ~3150$, at the top-end of the previous trend. Silver closed at 33.1$/oz, and continues on a lateral trend - it seems stuck in the range 29-34$/oz.
WTI crude oil fell by almost 1% and closed the week at 63.1$/bbl. If it continues falling, the next support levels are around 61$, 57$ and 54$. On the upside, 67$ may be resistance.
Bitcoin rallied with stocks, and was up by more than 10% this week! It is now around 94300$. The key resistance and support levels on Bitcoin, for the short term, are 109k$ and 74k$, respectively.
The relative strength of the US dollar (DXY) dropped during the week but closed essentially unchanged relative to the previous period, at ~99. A weaker dollar may help the US to improve the competitiveness of their exports. The EUR/USD is around 1.136$, the GBP/USD is at 1.33$, and the USD/JPY is at 143.65 JPY.
US M2 money supply at the date of 31st March 2025 was up by 0.4%, showing a slow increase over the previous month. If the money supply was going down, it would be another warning sign for the economy and equities. If financial stress in the banking system continues piling up, we will probably see a decrease of the money supply...
The national financial conditions index (NFCI) released on the 14th April 2025 tightened by 4.6%. Note that this indicator is delayed by two weeks.
The VIX closed the week at ~25, showing a decreasing risk perception in the options market. In our opinion, the overall systemic risk in the stock market and overall uncertainty about the US economy is too high. We wouldn't recommend selling puts unless you are really comfortable buying the underlying asset (cash-secured puts)!
Comment Section
This week was positive for the equity markets, fueled by strength in Big Tech, while President Trump's latest tariff remarks kept trade tensions in the spotlight.
Trump’s suggestion of 50% tariffs as a "total victory" added uncertainty, while Beijing disputed claims of ongoing talks, offsetting optimism from China’s decision to exempt some US goods from tariffs.
Alphabet shares climbed 1.5% after beating earnings estimates, announcing its first-ever dividend, and revealing a $70 billion stock buyback plan. Tesla surged 9.8% after new self-driving car rules were unveiled. Intel fell 7% on weak guidance, and T-Mobile dropped 11% on soft subscriber growth.
Next week, Amazon, Apple, and Meta—fellow members of the “Magnificent Seven”—are set to report earnings.
Euro Area Consumer Confidence continues falling and may soon reach 2023 or 2022 lows.
The S&P Global Flash US Composite PMI fell to 51.2 in April 2025 from 53.5 in March, pointing to the slowest private sector activity growth in 16 months. Services activity slowed (51.4 vs 54.4) while manufacturing improved (50.7 vs 50.2). Business expectations about the year ahead dropped to one of the lowest levels seen since the pandemic while prices charged for goods and services rose at the sharpest rate for just over a year, with an especially steep increase reported for manufactured goods, linked to tariffs. Also, growth of service sector business activity slowed sharply while new orders placed at factories edged up. Employment moved higher.
Initial jobless claims in the United States rose by 6000 from the previous week to 222000 on the third week of April, in line with market expectations.
The University of Michigan consumer sentiment for the US was revised to 52.2 in April 2025, down from 57 in March. Despite the upward revision, consumer sentiment fell for a forth consecutive month to the lowest since July 2022, as consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead.
Next week, we should pay attention to any trade war developments, the US jobs report, PCE inflation data, and the ISM Manufacturing PMI. In Europe, market participants will analyze flash GDP and inflation figures for the Eurozone.
We need to be extra careful in tumultuous times like this. If the risks of recession increase, equities will correct again.
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