Capital Markets Insights | 12 May - 16 May
Stock analysis and capital markets insights for smarter investing
Capital Markets Insights | 19 - 23 May
Stock analysis and capital markets insights for smarter investing
Dear Investoreans,
US
The week was volatile for U.S. capital markets, with a strong start fading into a sharp sell-off by Wednesday, May 21, driven by concerns over a ballooning U.S. budget deficit following a new bill passed by lawmakers. The S&P 500 and Nasdaq saw significant declines mid-week but supported by dip-buying and optimism over ongoing U.S.-China trade talks. A Moody’s downgrade of U.S. credit earlier in the month continued to weigh on sentiment, pushing Treasury yields higher (10-year at 4.51%). Tech stocks, particularly AI-related names like Nvidia, outperformed, while defensive sectors struggled. Investors remained cautious, balancing trade policy progress against fiscal concerns and a potential economic slowdown.
S&P500 closed the week down -2.61% and YTD -1.34%
Nasdaq closed the week down -2.39% and YTD -0.46%
GOLD
Gold closed the week up at $3,357.42 mid-week as investors hedged against fiscal deficit concerns and ongoing trade uncertainties. Geopolitical tensions, including India-Pakistan issues, also supported gold’s late-week recovery.
Gold closed the week +3.79% and YTD +27.96%
WTI
Oil prices declined as concerns about global economic growth resurfaced, exacerbated by the U.S. budget deficit fears. Earlier in the week, WTI briefly climbed above $61, driven by short-covering after the U.S.-China tariff truce. However, expectations of increased supply from OPEC+ and a potential U.S.-Iran deal kept prices under pressure.
WTI closed the week -0.71% and YTD -13.93%
FOREX
This week saw the Japanese Yen (JPY) stage a compelling comeback, with the USD/JPY exchange rate falling a substantial 1.84%. The US Dollar broadly lost ground, closing the week 2% lower, as market participants grew increasingly concerned about the health of the US economy. This fading confidence in the US economic narrative is actively eroding the Dollar's long-standing status as the premier safe-haven currency. Consequently, capital is rotating into alternatives like the Yen, which is traditionally favored during periods of global economic uncertainty, indicating a significant re-evaluation of risk by investors.
US Dollar closed the week -1.96 and YTD 8.64%
CRYPTO
Bitcoin hit a new record high near $112,000 on Thursday, May 22, driven by crypto-friendly policies from the Trump administration and corporate adoption of tokens on balance sheets. Coinbase’s inclusion in the S&P 500 on May 19 fueled a rally in crypto-related stocks, with Coinbase up 2.7%, Robinhood up 1.5%, and MARA Holdings up over 4% on Wednesday. However, Bitcoin retreated slightly by Friday as markets digested fiscal concerns.
Bitcoin closed the week +0.91% and YTD 14.61%
ECONOMIC CALENDAR
We didn’t have any major economic event this week. However next week we have FOMC Meeting minutes and GDP announcement.
This Week's Top Gainer in US Markets (excluding small caps under $2B market cap)
- Company: QBTS (D-Wave Quantum Inc.)
- Gain: 53.47%
D-Wave Quantum (QBTS) surged 23.96% after launching its new Advantage2 quantum computer. This system, now accessible via their cloud service, is touted by CEO Alan Baratz as a major breakthrough, capable of solving problems beyond current supercomputers, especially in AI and optimization.
This Week's Top Loser
- Company: FICO (Fair Isaac Corporation)
- Gain: -23.05%
Fair Isaac (FICO) shares dropped 21.9% this week after the FHFA Director criticized recent FICO price hikes and announced a review of credit report requirements for mortgages, potentially reducing demand for FICO scores.
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‘’I don't really like hedging. To me, if something needs to be hedged, you shouldn't have a position in it.’’
Stay sharp, Investorean! Keep an eye on your investments and take care of your yourself.
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May Investorean Be With You
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