Weekly Market Bites

financial news that makes sense

Author

Al Atencio
March 07, 2025 • Estimated Reading Time: 8 minutes

Welcome to your weekly market wrap-up.

Grab a cup of coffee, get comfortable, and catch up on financial markets.

I’ve been doing the reading and scrolling, to bring you the most relevant updates.

end of week markets update

1) It’s been a big week in financial markets:

  • The trade war is back on with Mexico, China, and Canada.

  • Government layoffs are starting to appear in the economic data.

  • The S&P500, Nasdaq, and crypto all went down during the week 🙃 .

  • International equities continue to outperform YTD

Here’s a summary of markets year-to-date:

2) Short-term pain for medium-term gain?

That seems to be the story we’re being sold by the US Government. A trade war, federal layoffs, lower immigration, and some economic and market chaos.

And that’s coming from Secretary of the Treasury Scott Bessent:

And Wall Street has started to get the message.

  • The S&P500 has given up the gains since the election.

  • The Nasdaq is almost -10% from the highs.

So, what exactly is “the plan”? Here’s the bigger picture summarized perfectly:

“So basically: 10Y yields go down, stocks go down, everything goes down, economy slows, the debt gets refinanced, the Federal Reserve has to cut rates, then everything explodes upwards again, and boom, AI becomes a massive complement (or replacement) to the labor force.

A beautiful, linear economy.”

Of course, this is all just a theory floating out there. Which has credibility with some pretty smart people like Kyla.

Others, I equally respect, simply see chaos and ego:

“Why are we at in a trade war less than eight years after Trump signed the USMCA agreement with Canada and Mexico?

Nobody really has a great answer. So economists are calling this chaotic and blunt.

The White House sometimes talks about this as it pertains to fentanyl.

Sometimes they say it's good for the economy. 

Sometimes they're saying we need to get respect for America in the eyes of the rest of the world.

And this is like almost like a PR tool.

So it's very strange. It's completely insane. Nobody can quite articulate why it's going to work economically.

Although Scott Bessent is doing a pretty good job of coming up with all sorts of stories for it.”

Beyond the market volatility, the US is ripping up major agreements. Some like the USMCA (US/MX/CAN) that Trump himself negotiated.

So how do businesses operate when the rules keep changing?

And if the plan is de-globalization and to bring production back to the USA some people are asking questions like:

Can an iPhone really be produced all-American? And how much more expensive would that be?

3) Over in Europe the global order is also shifting in real time:

European Union leaders are scrambling to get their act together in terms of beefing up their own security. As the reliability of the US as a security partner disappear.

And they’re saying things that haven’t been heard in generations.

From Germanys new PM:

Germany’s Merz vows ‘independence’ from Trump’s America, warning NATO may soon be dead

Election winner likens the Trump administration to Putin’s Russia as he bids to take Europe in a new direction.

And from France:

All of this of course is tied back to the war in Ukraine with Russia.

Russia is posing an existential threat to the European Union’s security and the only way to address that is to increase spending on defence.

Kaja Kallas - European Union’s foreign policy chief (Former PM of Estonia)

Translation for markets: Time to spend boatloads of 💶 💷 

We have to wait and see the EU walk the walk, but so far there is some pretty good talk:

And European stocks have been liking the prospect of trillions in government spending. While over in America the talk is about DOGE and austerity.

Particularly European defense companies are flying 🚀 

4) Oil prices are in trouble.

What happened? OPEC agreed to increase oil production in part pushed by Trump.

This goes back to the US governments “plan” of bringing down prices, which lowers inflation, lower interest rates, etc.

5) Crypto bros finally got their Strategic Reserve 🫠 

Unfortunately, its announcement had a pretty lame landing. 

The inclusion of 💩 like XRP and ADA was a real WTF moment 🤣 for everybody.

Even some of the most die-hard crypto + Trump followers I know are criticizing it:

Today Trump will be hosting a Crypto summit at the WH.

So the 🎪 show continues my friends...

charts

Oil prices have given up all the gains since the beginning of the Ukraine war.

“China is just pursuing the exact opposite strategy (as the USA). They're trying to expand into as many markets as possible, because they think they'll win the game of global technocapitalism.”

Balaji Srinivasan - former (CTO) of Coinbase, and general partner at a16z

And finally, some parting wisdom

thanks for reading and have a great weekend,

Al Atencio 🦉 

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