This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto on the way. This is a data rich tour as stocks finished lower on Wall Street but edged higher in Europe on Friday amid uncertainty about U.S. President Donald Trump’s rapid policy initiatives, including spending cuts and tariffs, and Germany’s upcoming elections. Oil prices settled down more than 2% while gold eased from record highs.
The Global MSCI index was down 1.04% on Friday, but MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.35% to its highest since November 8 and gained 1.47% for the week. The S&P 500 shed 1.7 per cent at the closing bell. The NASDAQ Composite slumped 2.2 per cent. The Dow Jones tumbled 1.7 per cent as twenty-three of the Dow’s 30 components fell, paced by United Health, Nvidia and Amazon. Crypto stocks sank after Bybit reported a hack with estimated losses of $US1.5 billion. Coinbase fell 8.3 per cent and Robinhood fell 8 per cent. The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 16.28% to 18.21.
The S&P/ASX 200 fell 0.3 per cent, and retreated 3 per cent since it closed at a record high last Friday. However, In Europe, shares have been volatile this week ahead of Germany’s election on Sunday, while talks between the U.S. and Russia on ending the war in Ukraine helped underpin a surge in European shares to record highs earlier in the week. Europe’s broad STOXX 600 climbed 0.52%, reversing two days of declines. It ended the week up 0.26% and the Hang Seng in Hong Kong lifted 3.99% on Friday. Investors piled into emerging market countries’ debt to the tune of $45 billion and bought up $2 billion of Chinese stocks in January, a closely followed report from the Institute of International Finance showed on Tuesday.
We could well be in the midst of a rotation to European and Emerging Markets and away from the over-valued US market, but given the sky-high level of uncertainty now exposed for all to see, we should expect more volatility, and we do risk dropping into correction territory in coming weeks.
Investors, as opposed to Traders might want to take risk off the table as the waves break over the assumptions many have about how the world works. As I will discuss on my upcoming Tuesday Live show, we are entering an era of global disorder, where powerful but transactional players try to rule the roost. And in so doing things will get broken, and markets disrupted, big-time.
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