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Market Quick Take – 5 May 2025

Market drivers and catalysts

• Equities: US job strength; S&P winning streak; Apple tariff concerns; EU tech rally; UK FTSE record gain
• Volatility: VIX declining; Fed meeting; earnings season; cautious futures
• Digital assets: Bitcoin steady ~$95k; ETF institutional buying strong; crypto stocks bullish
• Fixed Income: US treasury yields jump after strong April jobs report Friday
• Currencies: USDCNH the focus as it slips to multi-month lows despite strong USD close to last week.
• Commodities: Crude tanks as OPEC+ hikes production into a weakening economy
• Macro events: US April ISM Services

Macro data and headlines

• Warren Buffett will step down as chairman and CEO of Berkshire Hathaway at year-end after six decades, with Greg Abel, vice chairman for non-insurance operations, taking charge of a conglomerate that has grown aggressively under Buffett's leadership into a business valued at more than $1.16 trillion, and which generated $47.4 billion of annual operating earnings in 2024.
• Trump's 25% tariffs on key auto parts began on Saturday. He said he is open to reducing tariffs on China, as high levies have disrupted business between the two economies. However, he intends to retain some tariffs to encourage production in the US.
• The U.S. economy added 177,000 jobs in April 2025, exceeding market expectations of 130,000, despite slowing from March's revised 185,000. This aligns with the 12-month average of 152,000 amid uncertainty over President Trump's tariff policies.
• Average hourly earnings for US private nonfarm payrolls increased by 0.2% to $36.06 in April 2025, below the 0.3% forecast. Production and nonsupervisory employees' earnings rose by 0.3% to $31.06. Over 12 months, earnings grew by 3.8%, slightly below the 3.9% estimate.
• Euro Area inflation remained at 2.2% in April 2025, above the 2.1% forecast and ECB's 2.0% target. Energy prices fell, but services and food inflation increased. Core inflation rose to 2.7%, above the 2.5% forecast. Monthly consumer prices rose by 0.6%, matching March.

Macro calendar highlights (times in GMT)

0630 – Switzerland April CPI
0830 – Eurozone Sentix Investor Confidence
1345 – US April (final) Services/Composite PMIs
1400 – US April ISM Services
1700 – US Treasury to auction 3-year notes

Earnings events

• Monday: Palantir, Vertex Pharmaceuticals, The Williams Companies, CRH, Monster Beverage
• Tuesday: AMD, Ferrari, Arista Networks, Duke Energy, Intesa Sanpaolo, Brookfield Asset Management, Transdigm Group, Constellation Energy, Zoetis, Marriott
• Wednesday: Novo Nordisk, Uber, Disney, Applovin, Unicredit, Doordash, Fortinet
• Thursday: Toyota, Shopify, Mercado Libre, ConocoPhillips, Nintendo, McKesson, Enel, Rheinmetall, Siemens Energy
• Friday: Enbridge

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• US: US equities surged Friday, driven by robust job data and optimism over easing US-China trade tensions. The S&P 500 (+1.47%) achieved its ninth consecutive gain, its longest winning streak since 2004. Dow Jones (+1.39%) and Nasdaq (+1.51%) followed suit. Apple shares fell nearly 4%, weighed down by tariff-related costs, while energy giants ExxonMobil and Chevron posted gains despite mixed results. US futures edged slightly lower Monday as markets await catalysts from upcoming Fed decisions and corporate earnings.
• Europe: European stocks rallied sharply on Friday, buoyed by strong US employment data and signs of potential US-China trade dialogue. STOXX 50 rose 2.42%, while the DAX (+2.62%), CAC 40 (+2.33%), and FTSE 100 (+1.21%) posted strong gains. Tech and financial stocks outperformed significantly. Shell gained 2.1% after exceeding profit forecasts and initiating a $3.5 billion buyback. Eurozone April inflation steadied at 2.2%, with manufacturing output in Germany reaching a 37-month high despite ongoing tariff concerns.
• UK: The FTSE 100 climbed 1.21% on Friday, marking its 15th straight day of gains, a record streak. Shell (+2.22%) drove market optimism with its share buyback program, while financial institutions like NatWest and Standard Chartered reported robust earnings. The Bank of England's upcoming policy meeting this week anticipates a potential 25bp rate cut to preempt economic slowdown.
• Asia: Asian markets experienced subdued trading on Monday amid thin volumes due to holidays in Japan, China, Hong Kong, and South Korea. Australia's ASX 200 dropped 0.7%, dragged by Westpac's disappointing earnings (-3.8%). Market sentiment was cautious, with investors awaiting clarity from upcoming US-China trade developments and key Chinese economic data later this week.

Volatility

VIX dropped 7.8% to close at 22.68 Friday, signaling reduced market anxiety following recent tariff-related volatility. Despite a calmer volatility profile, VIX futures rose slightly (+1.64%) Monday morning, suggesting caution ahead of the Fed's policy meeting and key corporate earnings including Palantir, Uber, and Walt Disney.

Digital Assets

Bitcoin traded steady near $95,000 on Monday, as crypto markets awaited the Fed's rate decision this week. BTC briefly touched $98,000 post-NFP last Friday but pulled back on muted weekend activity. Institutional buying remains robust, with US Bitcoin ETFs purchasing 18,644 BTC last week—nearly six times the miners' output. Crypto stocks like Coinbase (+1.8%) and MicroStrategy (+3.35%) gained in early trading.

Fixed Income

• US treasury yields rose sharply on Friday on the better than expected US April jobs numbers, with the 2-year benchmark yield gaining 12 basis points to close the week at 3.82% while the 10-year benchmark rose 8 basis points to close the week at 4.31%.
• US High yield credit spreads tightened strongly again on Friday, with the Bloomberg High Yield spread to US treasuries we track tightening 16 basis points to close the week at 352 basis points, the lowest since April 2.

Commodities

• Brent crude tumbled to near the four-year low reached last month after OPEC+ agreed to extend May’s +400kbd production increase into June, thereby raising concerns of a global glut at a time where a challenging trade war may hurt demand. Further similar-size increases may follow, according to the Saudis, who have grown increasingly frustrated by overproduction from several countries led by Kazakhstan, Iraq, and the UAE.
• Gold trades with support for now established around USD 3,200 ahead of Wednesday’s Fed rate decision. Having surged by almost a quarter this year, the yellow metal has recently seen a loss of momentum, with large hedge funds cutting their net long to a one-year low, partly offsetting strong demand from Chinese investors through local ETFs. Focus on these key players as they return from a long Labour holiday on Tuesday.
• US copper imports hit a record 170,000 tonnes in April as traders rushed shipments ahead of possible tariffs, driving exchange-monitored warehouse stocks to a one-year low of 420kt, with sharp declines in stockpiles on the Shanghai and London exchanges tightening the non-US market which account for more than 90% of global demand.

Currencies

• The US dollar closed on a strong note Friday, with a strong US April jobs report in focus, but is off to a weak start in the Asian session today as the chief focus is on USDCNH, which dropped sharply on Friday and to a new five month low to start the week.
• Many are reading the USDCNH move to new lows as a sign that China will allow its currency to move more independently of the US dollar, which is apparently driving strength in many Asian currencies. The Taiwan dollar, for example, strengthened some 6% on Friday versus the US dollar and by more than three percent in today’s session as of this writing. These are the largest moves in decades as locals scramble to hedge USD exposure in an illiquid market. The Malaysian ringgit is some 2.5% stronger over the last two trading days and other major Asian currencies are also at multi-month highs versus the greenback in sympathy with the move.
• The USD/Hong Kong dollar exchange rate is resting at the lows of the band that it is allowed to trade within for the first time since 2021.

For a global look at markets – go to Inspiration.