Capital Markets Insights | 19 - 23 May
Stock analysis and capital markets insights for smarter investing
Capital Markets Insights | 26 May - 30 May
Stock analysis and capital markets insights for smarter investing
Dear Investorean,
U.S
The week was a bit of a mixed bag for U.S. stocks. While there was a strong start, a sharp sell-off hit by Wednesday, May 28th, primarily driven by concerns over a growing U.S. budget deficit. This stemmed from a newly passed bill, which clearly spooked investors. The S&P 500 and Nasdaq saw significant declines mid-week.
However, some "dip-buying" activity and optimism surrounding ongoing U.S.-China trade talks helped to provide some support towards the end of the week. Still, a Moody's downgrade of U.S. credit earlier in the month continued to weigh on overall sentiment, contributing to higher Treasury yields (with the 10-year yield around 4.51%). Tech stocks, particularly those linked to AI like Nvidia, were notable outperformers, while more defensive sectors struggled. Investors remained cautious, trying to balance progress on trade policy against ongoing fiscal concerns and the potential for an economic slowdown.
Closing Prices on Friday, May 30, 2025:
- S&P 500: 5,911.69 / +1.88% Weekly / +0.51 YTD
- Nasdaq: 19,175.87 / +2.03% Weekly / 1.56% YTD
GOLD
Gold prices closed the week slightly down, reflecting its traditional role as a safe-haven asset. Investors were hedging against the fiscal deficit concerns in the U.S. and the lingering trade uncertainties.
Closing Price on Friday, May 30, 2025:
- Gold: $3,289.40 per ounce / -2.03% / +25.37% YTD
News Around Gold:
Citi adjusted its short-term gold price forecast back to $3,500, citing escalating tariffs and heightened geopolitical risks as key drivers.
Citi adjusted its short-term gold price forecast back to $3,500, citing escalating tariffs and heightened geopolitical risks as key drivers.
WTI
Oil prices saw a slight decline this week. Resurfacing concerns about global economic growth, exacerbated by the U.S. budget deficit fears, put downward pressure on crude. Earlier in the week, WTI briefly climbed above $61 due to short-covering after a U.S.-China tariff truce. However, expectations of increased supply from OPEC+ and the potential for a U.S.-Iran deal kept prices subdued.
Closing Price on Friday, May 30, 2025:
- WTI Crude Oil: $60.26 / -2.16% / -15.79%
News Around WTI:
The market was closely watching the OPEC+ meeting over the weekend, with expectations of a third major output restoration, potentially adding around 411,000 barrels a day to the market from July. This anticipation, combined with renewed trade tensions after President Trump accused China of violating a trade agreement, contributed to the pressure on oil prices. Despite these bearish sentiments, U.S. crude oil inventories showed a larger-than-expected drawdown, indicating strong demand ahead of the summer driving season.
The market was closely watching the OPEC+ meeting over the weekend, with expectations of a third major output restoration, potentially adding around 411,000 barrels a day to the market from July. This anticipation, combined with renewed trade tensions after President Trump accused China of violating a trade agreement, contributed to the pressure on oil prices. Despite these bearish sentiments, U.S. crude oil inventories showed a larger-than-expected drawdown, indicating strong demand ahead of the summer driving season.
Forex
This week saw a compelling comeback for the Japanese Yen (JPY).
- Strongest Currency: The US Dollar (USD) broadly gained ground.
- Weakest Currency: The Japanse Yen (JPY) lost ground across the board.
Japanese stocks experienced a historic weekly outflow of nearly $12 billion, the largest on record, as reported by Bank of America. This was driven by profit-taking after a strong rally, a strengthening yen impacting exporters, and rising global uncertainty prompting investors to shift away from riskier assets.
Crypto
Bitcoin experienced some volatility this week, correcting after hitting new highs, but professional traders seem to be positioning for a rebound.
Closing Price of Bitcoin on Friday, May 30, 2025:
- Bitcoin (BTC): $104,020.00
Crypto News:
Bitcoin briefly touched a new record high near $112,000 on May 22nd. However, it later retreated below $104,000 by week's end amid mounting macroeconomic uncertainty, including the escalating US trade war. Despite BlackRock's spot Bitcoin ETF seeing its largest daily outflow, derivatives data and demand for stablecoins in China suggest that professional traders remain optimistic and are not alarmed by the pullback, viewing it as a likely rotation into stablecoins while awaiting reduced macroeconomic uncertainty.
Bitcoin briefly touched a new record high near $112,000 on May 22nd. However, it later retreated below $104,000 by week's end amid mounting macroeconomic uncertainty, including the escalating US trade war. Despite BlackRock's spot Bitcoin ETF seeing its largest daily outflow, derivatives data and demand for stablecoins in China suggest that professional traders remain optimistic and are not alarmed by the pullback, viewing it as a likely rotation into stablecoins while awaiting reduced macroeconomic uncertainty.
ECONOMIC CALENDAR
Thursday, May 29th: We got the Second Estimate of U.S. Q1 GDP. This is a big one, as it gives a deeper dive into the health of the economy, and the initial read showing a contraction definitely grabbed headlines. We also had Initial Jobless Claims, giving us a peek into the labor market's strength.
Friday, May 30th: The highly anticipated April Personal Consumption Expenditures (PCE) Price Index was released. This is the Federal Reserve's preferred measure of inflation, so everyone was glued to those numbers to see if inflationary pressures were easing. Alongside PCE, we also had Personal Income and Personal Spending data, which gave a clearer picture of consumer behavior, a key driver of the U.S. economy.
This Week's Top Gainer in US Markets (excluding small caps under $2B market cap)
- Gain: 56.61%
Regencell Bioscience (RGC) soared 45% to $741 on May 29, 2025, marking an astounding 2,500%+ surge since April's end. This dramatic rally, far outpacing the Nasdaq, occurred without any official news or announced catalysts, highlighting the highly speculative nature of the biotech sector where hype often drives price.
This Week's Top Loser
- Company: SMMT (Summit Therapeutics PLC)
- Gain: -29.54%
Summit Therapeutics (SMMT) shares dropped 29% on Friday. This significant decline came after their lead drug, ivonescimab (with partner Akeso), met one Phase 3 trial goal (progression-free survival) in lung cancer, but failed to show a statistically significant benefit in overall survival. This outcome, crucial for U.S. FDA approval, casts doubt on the drug's path to market, leading one analyst to downgrade the stock.
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