5/19/25 - 5/23/25 Weekly Market Recap - Movers, Macro, Monetary, and Fiscal

Week 5/19/25 -5/23/25

Weekly Market Summary by Aremorph


Summary - Movers, Macro, Monetary, and Fiscal


With the conclusion of the Spring semester and final exams, we return to our regularly scheduled programming. Apologies for the hiatus.

Global Weekly Movements

U.S. Equities

  • S&P 500 Index: 5,802.82 (-1.70%)

  • Dow Jones Industrial Average: 41,603.07 (-2.21%)

  • Russell 3000 Index: 3,299.81 (-1.66%)

  • NASDAQ Composite: 18,727.21 (-1.06%)

  • Big Movers of the Week 

    • Workday (WDAY): 238.01 (-12.83%)

      • Workday fell 12.5% Friday to $238.01 after posting a mixed quarter. Revenue rose 12.6% to $2.24B, but net income dropped 36% to $68M. Q2 subscription growth is expected at 13.5%. The company reaffirmed 14% full-year subscription growth and raised its non-GAAP operating margin outlook to 28.5%. CEO Carl Eschenbach called it a solid quarter, but the market was looking for more.

    • Dollar General (DG): 101.39 (8.38%)

      • Dollar General rose 3.9% and Dollar Tree gained 3.7% Tuesday as investors bet tariffs could steer more shoppers their way. Walmart recently warned it would raise prices due to Trump’s tariffs, signaling broader inflation. That’s likely to boost traffic to deep discounters as consumers look for cheaper alternatives.

    • Enphase Energy (ENPH): 39.64 (-21.35%)

      • Congress is cutting key renewable energy tax credits, including EV incentives and the 30% solar and wind credit. This threatens many projects and hits companies like Enphase, Bloom Energy, NextEra, and AES. If the bill passes, the industry could stall and face bankruptcies. I’m avoiding renewable stocks for now. Congress is cutting key renewable energy tax credits, including EV incentives and the 30% solar and wind credit. This threatens many projects and hits companies like Enphase, Bloom Energy, NextEra, and AES. If the bill passes, the industry could stall and face bankruptcies. I’m avoiding renewable stocks for now.

Chinese Equities - Shanghai Composite (SHCOMP): 3,348.37 (-0.52%)

Hong Kong Equities - Hang Seng Index (HSI): 23,601.26 (1.92%)


Japanese Equities- Nikkei 2225 (NI225): 37,160.47 (-1.10%)

European Equities 

  • UK Index (UKX): 8,717.97 (0.38%)

  • German Index (DAX): 23,629.58 (-0.32%)

Commodities

  • Gold Futures: 3,357.70 (4.46%)

  • Crude Oil Futures: 60.93 (0.48%)

U.S. Monetary & Fiscal Policy:

Rate Cuts: Markets have dramatically walked back expectations for a July rate cut. Just a month ago, the probability of the Fed holding rates steady at 4.25–4.50% was only 9.6%, with nearly 90% betting on a cut. Now, that number has surged to nearly 75%, making a cut all but off the table. The shift reflects stronger-than-expected economic data and sticky inflation, which have forced investors to reprice their outlook. What was once a near-consensus call for easing is now a near-consensus hold.

Dollar Weakness: The dollar’s shine is fading fast. Just months after peaking, the greenback has tumbled over 10% from its highs as trade tensions, fiscal fears, and doubts about U.S. exceptionalism rattle investor confidence. Moody’s recent downgrade of U.S. credit only added fuel to the fire, reviving the “sell America” trade. Speculators are now near their most bearish dollar stance since mid-2023, with net shorts at $17B.

Despite years of painful dollar short trades, cracks are starting to show. With U.S. assets no longer acting as the safe-haven they once were, even a small shift in foreign hedging behavior could trigger big outflows. And while the Fed may hold steady if the economy surprises, for now, traders are leaning toward selling dollar strength - not buying dips.


Global Macroeconomic News:

Harvard Internationals vs Trump: A federal judge temporarily blocked the Trump administration's attempt to bar international students from attending Harvard, following a lawsuit the university filed within 24 hours of the policy announcement. Harvard argued the move was retaliatory and politically motivated, threatening the futures of its 6,800 international students and the university’s core mission. The administration had revoked Harvard’s ability to enroll foreign students, citing noncompliance with broad demands related to campus protests and antisemitism. Judge Allison Burroughs ruled that the policy would cause "immediate and irreparable injury," issuing a restraining order while setting a hearing for May 29. 


Bet on Equities: A huge bullish bet on U.S. stocks, possibly from one big institutional investor, has stirred up the options market. Nearly $3B has been spent on June 2027 call options, mostly on tech names like Amazon, Salesforce, and ARM. The trades suggest a long-term bullish view with a preference for upside and volatility exposure over owning the stocks outright. This activity has pushed up two-year implied volatility in QQQ versus SPY. 


Oil Surplus: OPEC+ is considering a third straight oil production hike for July, potentially boosting output by 411,000 barrels per day - triple the original plan. The final decision will come at the group’s June 1 meeting, with pressure mounting from Saudi Arabia on countries like Kazakhstan and Iraq to stick to quotas. Despite claims that the increase is demand-driven, motives likely include punishing quota violators, regaining market share, and easing political pressure from President Trump. 

Sources: Google Finance, Market Watch, CME Fedwatch, Yahoo Finance, Reuters, New York Times, Bloomberg, Wall St Journal, Washington Post, US Department of the Treasury

Have a great week investing!

Sincerely,
Aremorph






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