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Bitcoin, S&P 500, Nasdaq surge amid strong manufacturing data and trade hopes

Bitcoin, S&P 500, Nasdaq surge amid strong manufacturing data and trade hopes

This week, major US equity indices posted gains, with the S&P 500 climbing 0.63 per cent, the Nasdaq surging 1.52 per cent, and the Dow Jones Industrial Average edging up 0.21 per cent. The upbeat mood was fuelled by better-than-expected manufacturing data, standout performances from technology companies, and growing hopes that trade tensions, particularly between the US and China, might ease.

However, the markets remain sensitive to macroeconomic developments, with bond yields ticking higher, the US dollar gaining strength, and commodities like gold and Brent crude showing mixed responses to geopolitical shifts. Meanwhile, the cryptocurrency market, led by Bitcoin, is riding this wave of risk-on sentiment, with the digital asset flirting with the US$100,000 milestone.

As investors await the US nonfarm payrolls data for April 2025, the interplay between macroeconomic signals and market dynamics remains a critical focus. Below, I unpack these developments and offer my perspective on what they mean for investors and the broader economic landscape.

The improvement in global risk sentiment this week is a refreshing change after months of volatility driven by trade war fears and policy uncertainty. The better-than-expected manufacturing data, likely from key economies like the US and parts of Europe, suggests that industrial activity is holding up despite earlier concerns about a global slowdown.

Manufacturing is a bellwether for economic health, and this data likely reassured investors that demand remains resilient, even in the face of tariff-related headwinds. The technology sector, a powerhouse of the US economy, further bolstered market confidence with strong earnings reports. Companies in the Nasdaq, which surged by 1.52 per cent, likely benefited from robust revenue growth and optimism about artificial intelligence (AI) and cloud computing.

This tech-driven rally underscores the sector’s role as a market leader, even as valuations remain stretched. However, I believe investors should remain cautious. While tech earnings are a bright spot, the sector’s high price-to-earnings ratios make it vulnerable to sudden shifts in sentiment, especially if inflationary pressures or interest rate hikes resurface.

The bond market, meanwhile, sent mixed signals. The benchmark 10-year Treasury note yield rose three basis points to 4.21 per cent, and the two year note yield climbed seven basis points to 3.69 per cent. These upticks reflect a market grappling with expectations of tighter monetary policy, particularly as the Federal Reserve monitors inflation and labor market data.

Rising yields typically signal confidence in economic growth, but they also increase borrowing costs, which could weigh on equities and other risk assets over time. I view the rise in yields as a natural response to the improving economic outlook, but it’s a double-edged sword.

If yields climb too quickly, they could choke off the equity rally by making fixed-income investments more attractive. For now, the yield curve remains relatively steep, suggesting that recession fears are receding, but investors should keep a close eye on the Fed’s next moves.

The US Dollar Index’s 0.78 per cent jump to 100.25 reflects the greenback’s safe-haven appeal amid lingering uncertainties, as well as the relative strength of the US economy. However, the dollar’s strength is a headwind for US exporters and multinational corporations, which could temper earnings growth in the coming quarters.

Gold, often a beneficiary of dollar weakness, fell 2.3 per cent to a two-week low of US$3,212 per ounce. This decline surprised me, given gold’s recent run to record highs driven by central bank buying and geopolitical uncertainty. The drop may reflect profit-taking or a shift toward riskier assets like equities and cryptocurrencies, as investors bet on a more stable trade environment.

Conversely, Brent crude rebounded 1.75 per cent, buoyed by new US sanctions on Iran, which tightened global oil supply expectations. While this geopolitical move supports oil prices, it also risks reigniting inflationary pressures, a concern I’ll revisit when discussing the upcoming US jobs report.

In Asia, the Bank of Japan’s decision to hold its policy rate steady at 0.5 per cent was widely expected, but its downward revision of growth and inflation forecasts due to tariff uncertainties highlights the global ripple effects of US trade policies. Japan’s economy is heavily export-driven, and any escalation in trade tensions could exacerbate its challenges.

The closure of markets in China and Vietnam for public holidays limited trading activity in the region, but signals that China is open to trade talks with the Trump administration have boosted sentiment globally. From my perspective, these talks are a critical wildcard. While early negotiations could stabilise markets, the history of US-China trade relations suggests that progress is rarely linear. Investors should brace for volatility as details emerge.

The cryptocurrency market, particularly Bitcoin, is a standout performer in this risk-on environment. Bitcoin is trading near US$97,000, just five per cent shy of the US$100,000 milestone, with the total crypto market capitalisation climbing above US$3.13 trillion. The Crypto Fear & Greed Index’s shift to “greed” from “neutral” reflects growing bullishness among traders, a sentiment I share to an extent.

Bitcoin’s resilience amid earlier trade-related uncertainty is notable, and its recent decoupling from stock market movements suggests it’s maturing as an asset class. However, I caution that cryptocurrencies remain highly sensitive to macroeconomic events, particularly interest rates and trade policy. The positive signals from Washington about trade deals have likely contributed to Bitcoin’s rally, as reduced uncertainty encourages investment in riskier assets.

Corporate adoption of Bitcoin continues to drive its narrative as a store of value. Strategy Inc., one of Bitcoin’s largest corporate holders, raised its 2025 price target for the cryptocurrency during its Q1 earnings call, signaling strong confidence in its long-term value. Similarly, MicroStrategy, the largest corporate Bitcoin holder, announced plans to increase its stash despite missing earnings expectations.

This commitment from high-profile companies underscores Bitcoin’s growing acceptance in corporate treasuries, a trend I view as a structural tailwind for the asset. Tokyo-based Metaplanet’s issuance of 3.6 billion yen (US$24.8 million) in bonds to fund additional Bitcoin purchases further illustrates this trend.

Holding over 5,000 BTC, Metaplanet is positioning itself as Asia’s answer to MicroStrategy, leveraging Bitcoin to enhance shareholder value. While I admire the boldness of these strategies, I worry about the risks of such concentrated exposure, especially if Bitcoin’s price faces a sharp correction.

The upcoming US nonfarm payrolls report for April 2025 is the next major catalyst for markets. A strong jobs number could reinforce expectations of a robust US economy, potentially pushing Treasury yields higher and strengthening the dollar further. However, it might also reduce the likelihood of near-term Federal Reserve rate cuts, which could temper enthusiasm for equities and cryptocurrencies.

Conversely, a weaker-than-expected report could reignite hopes for monetary easing, boosting risk assets like Bitcoin and tech stocks. My base case is that the jobs report will show moderate growth, reflecting a labor market that is cooling but not collapsing. This scenario would likely support the current risk-on sentiment without triggering a hawkish Fed response. However, given the Fed’s data-dependent stance, any surprises could lead to sharp market reactions.

Looking ahead, I believe the interplay between trade policy, monetary policy, and corporate earnings will define the market’s trajectory in 2025. The optimism surrounding trade negotiations is encouraging, but the devil is in the details. A meaningful de-escalation of tariffs could unlock significant upside for global equities and commodities, but entrenched geopolitical rivalries make this outcome uncertain.

The Federal Reserve’s path is equally critical. With inflation still above target and the labor market showing resilience, the Fed may adopt a cautious approach to rate cuts, keeping yields elevated and testing the equity market’s valuations. For cryptocurrencies, the combination of institutional adoption and macroeconomic tailwinds is bullish, but volatility is a given in this nascent asset class.

In conclusion, the current market rally reflects a potent mix of economic resilience, corporate strength, and policy optimism. However, investors must navigate a complex landscape of rising yields, dollar strength, and geopolitical risks. While I’m cautiously optimistic about the near-term outlook, I urge vigilance.

The nonfarm payrolls report will provide fresh clues, but the broader story is one of opportunity tempered by uncertainty. For now, the markets are riding a wave of hope, but staying grounded in data and fundamentals will be key to sustaining this momentum.

 

Source: https://e27.co/bitcoin-sp-500-nasdaq-surge-amid-strong-manufacturing-data-and-trade-hopes-20250502/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

TradFi feels the chill, crypto heats up: US slowdown meets Asia’s digital surge

TradFi feels the chill, crypto heats up: US slowdown meets Asia’s digital surge

The recent retreat in global risk sentiment, driven by a cocktail of weaker-than-expected US economic data and shifting investor moods. The numbers coming out of the US last week painted a concerning picture: manufacturing growth slowed more than anticipated, services took an unexpected dive into contraction territory, and consumer sentiment, as measured by the University of Michigan, slumped to its lowest level since November 2023.

Add to that the spectre of rising inflation expectations, and it’s no surprise that markets reacted with a collective wince. Major US equity indices ended Friday in the red, with the MSCI US index dropping 1.8 per cent, led by steep declines in Consumer Discretionary (down 2.7 per cent) and Information Technology (down 2.5 per cent). Treasury yields also pulled back, with the 10-year dipping seven basis points to 4.42 per cent and the 2-year falling 6 basis points to 4.20 per cent.

Meanwhile, the US Dollar Index edged up 0.2 per cent, hitting a high of 106.74 before settling at 106.61. Gold, despite a slight 0.1 per cent dip on Friday due to profit-taking, is still on track for an eighth consecutive weekly gain, buoyed by safe-haven demand tied to uncertainty over President Donald Trump’s tariff proposals. Brent crude, however, slid 2.7 per cent, reflecting jitteriness over a potential Ukraine peace deal.

Over in Asia, the mood was a bit more upbeat, with the MSCI Asia ex-Japan index climbing 1.76 per cent to notch a sixth straight week of gains, powered by a rally in Chinese tech stocks—Hang Seng soared 4.0 per cent, CSI 300 rose 1.3 per cent, and TAIEX gained 1.0 per cent. Germany’s election results, announced this morning, aligned with polls, with Friedrich Merz’s conservative bloc taking nearly 29 per cent and the far-right Alternative for Germany doubling its share to over 20 per cent. Asian markets opened mixed today, but US equity futures suggest a rebound might be on the horizon.

Let’s unpack this a bit.

TheUS data from S&P Global was a double whammy—manufacturing PMI for February came in weaker than economists had hoped, signaling a slowdown in one of the economy’s key engines. Even more surprising was the services PMI, which flipped into contraction after months of resilience. This isn’t just a blip; it’s a red flag that the US economy might be losing steam faster than anticipated.

The University of Michigan’s sentiment index dropping to its lowest in over a year only adds fuel to the fire. Consumers are clearly rattled, and the culprit seems to be inflation expectations creeping higher. With Trump’s tariff threats looming large—potentially slapping hefty duties on imports from China and elsewhere—households and businesses alike are bracing for higher costs. That fear is palpable in the equity markets, where riskier sectors like Consumer Discretionary and Info Tech bore the brunt of the sell-off.

Investors appear to be rotating out of growth stocks and into safer bets, as evidenced by the drop in Treasury yields. Lower yields typically signal a flight to safety, though the modest uptick in the US Dollar Index suggests some lingering confidence in the greenback as a haven currency amid global uncertainty.

Gold’s performance is particularly telling. Even with Friday’s slight retreat, its eight-week winning streak underscores how jittery investors are. Trump’s tariff talk isn’t just a domestic issue—it’s a global one. If he follows through, we could see supply chain disruptions, higher input costs, and a ripple effect across commodity markets. Gold thrives in times like these, and its resilience despite profit-taking shows that safe-haven demand isn’t going anywhere.

Brent crude’s decline, on the other hand, reflects a different dynamic. The prospect of a Ukraine peace deal could ease geopolitical tensions and reduce oil supply risks, but the uncertainty is keeping traders on edge. A 2.7 per cent drop isn’t catastrophic, but it’s enough to signal that energy markets are grappling with mixed signals.

Asia’s story offers a glimmer of hope amid the gloom. The MSCI Asia ex-Japan index’s 1.76 per cent bounce on Friday, driven by Chinese tech giants, suggests that some pockets of the global economy are still finding their footing. The Hang Seng’s 4.0 per cent surge was a standout, fueled by optimism around China’s tech sector, which has been clawing back ground after years of regulatory crackdowns.

The CSI 300 and TAIEX followed suit, though gains were more modest at 1.3 per cent and 1.0per cent, respectively. This resilience could be a sign that Asian markets are decoupling—at least temporarily—from US woes. China’s stimulus measures and a weaker yuan might be giving exporters a boost, while tech firms benefit from renewed investor appetite. That said, Monday’s mixed start in Asian equities hints that the rally might not have legs unless US markets stabilise.

Switching gears to Europe, Germany’s election results are worth a closer look. Friedrich Merz’s conservative bloc securing nearly 29 per cent of the vote isn’t a shock—polls had been pointing that way for weeks. What’s more eyebrow-raising is the Alternative for Germany (AfD) doubling its share to over 20 per cent. The far-right’s gains signal a growing populist undercurrent that could complicate Merz’s coalition-building efforts.

A Merz-led government might lean toward fiscal conservatism and tougher trade stances, which could clash with Trump’s tariff agenda and add another layer of uncertainty to global markets. For now, though, the immediate market impact seems muted—Asian equities didn’t flinch much this morning, and US futures are pointing to a higher open, suggesting traders are more focused on domestic data than Berlin’s political shuffle.

Then there’s the crypto angle, which feels like a subplot that’s gaining traction. Deribit’s push into Hong Kong is a fascinating development. The city, alongside Singapore, is racing to become Asia’s crypto hub, and Trump’s pro-crypto rhetoric is fanning the flames. Deribit’s chief commercial officer, Jean-David Péquignot, hit the nail on the head—Hong Kong’s appeal lies in its status as a financial nexus and its growing pool of family offices and asset managers dabbling in digital assets. This isn’t just about retail speculation anymore; institutional interest is picking up, and Hong Kong wants a piece of the pie.

Singapore’s in the game too, with both cities rolling out regulatory frameworks to lure crypto firms. The broader market, however, is showing some cracks—AI Agents like ai16z, Fartcoin, and Turbo tanked over five per cent in the last 24 hours, though AIXBT bucked the trend with a 4.06 per cent gain. Ethereum’s holding steady, up 0.58 per cent, thanks in part to buzz around the Ethereum Ecosystem Conference.

But the real wild card is Ye’s “Swasticoin” stunt. His now-deleted posts teasing a token launch next week—after years of slamming similar projects—reek of provocation. Whether it’s a serious move or just Kanye being Kanye, it’s a reminder of how chaotic and hype-driven the crypto space can be. Investors would be wise to steer clear until the dust settles.

So, what’s my take on all this?

The retreat in global risk sentiment feels like a natural response to a US economy that’s flashing warning signs. Manufacturing and services data don’t lie—growth is slowing, and consumers are spooked. Trump’s tariff threats are amplifying the unease, pushing investors toward gold and away from equities. Asia’s resilience is a bright spot, but it’s fragile—dependent on China’s tech momentum and broader market stability.

Germany’s election adds a political twist, though it’s not the main event yet. And the crypto boom in Hong Kong and Singapore? It’s exciting, but the Ye drama underscores the sector’s volatility. We’re in a choppy phase—markets hate uncertainty, and there’s plenty of it to go around.

My gut says we’ll see more turbulence before any clear trend emerges, but if US futures are right, a short-term bounce could be in the cards. Long term, though, it’s anyone’s guess until we get more clarity on Trump’s policies and the US economic trajectory. Stay sharp—this ride’s far from over. Hope you like my observations for 24 February 2025.

 

Source: https://e27.co/tradfi-feels-the-chill-crypto-heats-up-us-slowdown-meets-asias-digital-surge-20250224/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

The shifting sands of global trade and the cryptocurrency surge

The shifting sands of global trade and the cryptocurrency surge

Key points:

  1. US Considers Tariffs: Trump explores reciprocal tariffs on Japan and South Korea, stirring trade tensions.
  2. Market Response Mixed: MSCI US index up 1.1%, but US Treasury yields drop, reflecting cautious optimism.
  3. Gold as Safe Haven: Gold prices rise to near US$3,000, signaling investor caution amid trade uncertainty.
  4. Oil Prices Stable: Brent crude at US$75/barrel, balanced by OPEC+ and US policy dynamics.
  5. Coinbase Soars: Revenue doubles to US$2.3 billion, showing crypto’s mainstream integration and growth.
  6. GameStop’s Crypto Pivot: Traditional retailer GameStop explores cryptocurrencies, signaling broader market acceptance.

The latest developments in global finance have painted a picture of both cautious optimism and bold new ventures on 14 February 2025. As tensions simmer over trade policies, particularly with the US signalling potential reciprocal tariffs against nations like Japan and South Korea, the market’s response has been a nuanced blend of relief and strategic positioning.

Meanwhile, in the digital realm, Coinbase’s latest financial revelations signal a robust mainstream integration of cryptocurrencies, showcasing a significant pivot in investment landscapes.

The tentative global risk sentiment can largely be attributed to the recent news regarding US tariffs. President Trump’s directive to explore reciprocal tariffs has cast a long shadow over international trade relations. The market’s sigh of relief stems from the hope that these tariffs might not be as punitive as initially feared, mirroring the recent adjustments with Canada and Mexico. This development suggests a possible softening of trade war rhetoric, which could lead to more stable investor confidence in the short term.

Yet, the reaction in financial markets shows a clear dichotomy. On one hand, the MSCI US index rose by 1.1 per cent, with materials leading the charge with a 1.7 per cent gain, indicating sector-specific optimism. Conversely, US Treasury yields have seen a decline, with the 10-year yield dropping 9.2 basis points to 4.53 per cent, and the 2-year yield falling by 4.8 basis points to 4.31 per cent. This could be read as the market bracing for potentially slower growth or inflationary pressures easing off, influenced by expectations that the Federal Reserve’s favoured inflation gauge might show softer numbers than anticipated.

The US Dollar Index’s slight decline by 0.6 per cent also speaks to this complex sentiment, where the dollar’s role as a safe haven is being re-evaluated against the backdrop of trade policy uncertainty. Meanwhile, gold’s upward trajectory towards US$3,000 per ounce, with a 0.8 per cent increase, underscores the lingering search for security in traditional safe-haven assets amidst geopolitical and economic uncertainties.

In the oil markets, Brent crude held steady at US$75 per barrel, showing that despite the trade tensions, OPEC+’s supply management and US policy dynamics under the Trump administration continue to exert influence on oil prices, keeping investors’ eyes peeled for any policy shifts or supply changes that could disrupt this balance.

Turning our gaze to the equity markets, Asian equities presented a mixed bag in early trading sessions, indicative of regional variations in response to global trade news. US equity futures suggested a flat opening, perhaps reflecting a cautious approach by investors, waiting to see how these trade negotiations pan out.

Amid these traditional market movements, a more disruptive narrative is unfolding with GameStop’s exploration into alternative asset classes, particularly cryptocurrencies like Bitcoin. This move by GameStop, traditionally a retailer, into digital assets is not just a business pivot but a signal of broader acceptance and integration of cryptocurrencies into mainstream investment portfolios. The social media interaction between GameStop’s CEO Ryan Cohen and Michael Saylor of MicroStrategy underscores this shift, aligning with a trend where traditional companies are looking to diversify into digital currencies to tap into new revenue streams or hedge against inflation.

This brings us to the stellar performance of Coinbase, which has not only met but significantly exceeded Wall Street expectations in its fiscal fourth quarter. Coinbase’s revenue doubled to US$2.3 billion from the previous year, with adjusted earnings per share soaring to US$4.68 from US$1.04. The boom in cryptocurrency trading, fuelled by both institutional and consumer interest, seems to have been amplified by the political climate, particularly post-Trump’s election, which has often been seen as crypto-friendly.

The detailed breakdown of Coinbase’s revenue shows a stark increase in transaction revenue by 172 per cent, reflecting the heightened activity in cryptocurrency markets. The growth in subscription and services revenue by 15 per cent, alongside significant increases in stable coin, Blockchain Rewards, and custodial fee revenues, paints a picture of a maturing ecosystem where various facets of cryptocurrency operations are gaining traction.

This surge in Coinbase’s performance isn’t just about numbers; it’s a narrative of how cryptocurrencies are becoming less of a fringe movement and more of a central player in the financial world. The election of President Trump, perceived by many in the crypto community as favourable due to his deregulatory stance and interest in digital currencies, has likely contributed to this momentum.

The road ahead for both global trade and the cryptocurrency sector is fraught with challenges. For global trade, the effectiveness of ongoing negotiations will determine whether we see a de-escalation or a further escalation of trade barriers. For cryptocurrencies, regulatory clarity, market volatility, and the integration into traditional finance systems remain significant hurdles.

To conclude, the interplay between traditional finance and emerging technologies like blockchain and cryptocurrencies will likely define the next era of economic evolution. The cautious optimism in markets, coupled with bold moves into digital assets by companies like GameStop, and the undeniable success stories like Coinbase, suggest we are on the cusp of a new financial paradigm. Yet, the journey is as much about managing risks as it is about embracing new opportunities, a balance that will test the mettle of investors, policymakers, and innovators alike.

 

Source: https://e27.co/the-shifting-sands-of-global-trade-and-the-cryptocurrency-surge-20250214/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j