Quick Take Europe

Weekly Market Recap & What's Ahead - 17 to 21 February 2025

Macro 3 minutes to read

Summary:  This article provides a weekly market recap and outlook, covering key market trends, earnings, macro events, and asset performance, while highlighting major drivers from the past week and key risks for the week ahead.


Weekly Market Recap & What's Ahead
17 to 21 February 2025


Key Takeaways

  • Equities: S&P 500 hit a record midweek before a Friday selloff (-1.7%); Walmart (-6.5%) led retail slump.
  • Volatility: VIX jumped to 18.21 (+16.3%) as macro risks increased.
  • Digital Assets: Bitcoin dropped below $96K; Bybit hack dented sentiment.
  • Fixed Income: US 10-year yield fell to 4.43% amid risk-off moves.
  • Commodities: Gold hit a new record on haven demand; crude fell on weak US data.
  • Currencies: USD weaker on Fed signals; JPY strengthened on BoJ intervention risk.

Headlines & Macro News (17 to 21 February 2025)

Markets started strong but ended weak as inflation concerns, Fed policy shifts, and geopolitical risks weighed on sentiment.

  • US CPI concerns persisted as the Fed minutes signaled a pause in rate cuts due to sticky inflation.
  • Trump tariff threats impacted sentiment, with EU autos (-3-4%) and tech stocks declining midweek.
  • US-Russia peace talks raised uncertainty, with Ukraine absent from negotiations in Saudi Arabia.
  • China stimulus optimism fueled Hang Seng +2.9% late-week, led by AI and tech stocks.
  • Germany's elections resulted in a CDU-led majority, with markets reacting positively to potential policy clarity.

Equities

US: Early week record highs in the S&P 500 and Nasdaq reversed into Friday’s selloff (-1.7%) as weak consumer sentiment and Walmart’s (-6.5%) weak outlook rattled investors. Tech stocks saw gains, but Palantir (-10%) dropped on CEO share sales. Nvidia’s upcoming earnings are now in focus.

Europe: DAX (-1.68%) & STOXX 600 (-1.4%) fell on tariff concerns. Philips (-11%) missed earnings expectations, while Novo Nordisk (+5.5%) surged on FDA resolution of shortages.

Asia: China stocks outperformed, with Hang Seng (+2.9%) fueled by AI optimism. Alibaba (+8.1%) surged on strong earnings, while Nikkei (-0.4%) lagged due to US trade risks.


Volatility

The VIX spiked to 18.21 (+16.3%) on Friday amid macro uncertainty and Nvidia's looming earnings. VVIX surged above 100, signaling heightened hedging demand. However, VIX futures eased (-3%) this morning as markets stabilized.


Digital Assets

Bitcoin fell below $96K (-0.6%), failing to reclaim the $100K level. The Bybit hack ($1.4B loss) dented sentiment, leading to broad altcoin weakness. Coinbase (-8.3%) and Riot (-9.8%) dropped, reflecting risk-off positioning in crypto-related equities.


Fixed Income

Treasuries rallied as investors fled to safety. The US 10-year yield fell to 4.43% (-7bps) after a steep equity selloff on Friday. Fed minutes suggested a pause in QT (quantitative tightening), further anchoring bond yields. Japan’s JGB yields surged midweek but were tempered by BoJ intervention threats on Friday.


Commodities

Gold hit a fresh record near $2,950, supported by haven demand amid trade tensions and Fed uncertainty. Crude fell 3% on weak US economic data, with Brent testing $74 support. Copper prices faced selling pressure as rising warehouse stocks raised concerns about near-term demand.


Currencies

The USD weakened after Fed minutes signaled a longer-than-expected QT pause. JPY strengthened, with USDJPY falling to 149.29, but later rebounding on BoJ verbal intervention. EURUSD tested 1.0500, supported by Germany’s election outcome.


Looking Ahead (24 to 28 February 2025)

  • Earnings Spotlight: Nvidia (Wed), Salesforce, Stellantis, Dell, Warner Bros. Discovery.
  • Macro Events: Fed’s PCE inflation report (Fri), US Q4 GDP revision (Thu), Consumer Confidence & Housing Reports (Tue).
  • Global Central Banks: Fed officials speaking; BoJ in focus after CPI uptick.
  • Trade & Policy: Trump’s trade stance, US-EU tariff talks, potential further China stimulus.

Markets are eyeing Nvidia’s earnings and the Fed’s PCE inflation report as key catalysts for next week’s price action.

For a global look at markets – go to Inspiration.

Disclaimer

Confidentiality and Usage:
You may not reproduce, distribute, or transmit this material or any portion thereof without prior written permission from Saxo.

Nature of Information:
The information provided herein is based on current market conditions and analysts' opinions, which may reflect personal views of the author, and are subject to change without notice. This material does not include a record of any trading prices, or an offer of, or solicitation for, or endorsement to enter into any transaction in any investment product. Any forecast on the economy, markets and economic trends of the markets provided is not necessarily indicative of the future or likely performance of the investment product subject of this material.

Responsibility and Liability:
Saxo accepts no liability for any use that may be made of these comments or for any consequences that arise from such use. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

The information provided in this material is solely for information only. It is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. Accordingly, it should not be relied on or treated as a substitute for specific advice concerning specific situations of any person. Please seek advice from a financial adviser regarding the suitability of any investment product taking into account your specific investment objectives, financial situation or particular needs before you make a commitment to purchase an investment product. In the event that you choose not to seek advice from a financial adviser, you should consider whether any investment product mentioned in this publication is suitable for you.

Notwithstanding the above, insofar as any information provided herein contains research analyses or reports concerning any investment product authored by any foreign research house and is issued or promulgated to a person in Singapore who is not an accredited investor, expert investor, and/or institutional investor, Saxo Capital Market Pte. Ltd. accepts legal responsibility for the contents of this material to the extent required by law. Recipients of such material are to contact Saxo Capital Markets Pte. Ltd. in respect of any matters arising from, or in connection with, this material.

Risk Disclosure:
Trading in investment products involve significant risk, including the risk of losing your entire investment. Historical returns are not a guarantee of future returns. Prices can both rise and fall, and there is a risk that you will not get back the money you invested.

Conflicts of interest:
The author may hold positions in the investment products mentioned. The author does not own positions in the underlying investment product exceeding 0.5% of its market capitalisation, save as otherwise declared. The author is not permitted to trade the mentioned investment products within the first 24 hours after the publication of this article.

Saxo maintains partnerships with companies that compensate Saxo for promotional activities conducted on its platform. Additionally, Saxo has agreements with certain partners who provide retrocession contingent upon clients purchasing specific investment products offered by these partners. While Saxo receives compensation from these partnerships, all content is conducted with the intention of providing clients with valuable options and information.

Publication details:
If any listed companies are the subject of the material, the content has not been submitted to the companies in question prior to publication.

Please refer to our full disclaimer and notification on non-independent investment research for more details.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Singapore
Singapore

Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Saxo is part of the J. Safra Sarasin Group.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.