Weekly Market Update (March 23, 2025)

Market Hedwig
Mar 22
2 min read

HIGHLIGHTS

US equities ended the week almost flat with low volume and liquidity, although it was a busy week with central bank meetings globally. All eyes are on the next phase of tariff announcements, which will be on April 2.

Fed: The Fed decided to keep rates unchanged. Projection for this year remains at 2 rate cuts. Other than data-dependent, Fed officials also emphasized that Trump’s policies are important, especially the impact of tariff. Market expectation for rate cuts by year-end increased from 58bps to 70bps.

BoE: Bank of England (BoE) also decided to hold rates. Although the governor expected a gradual decline in inflation, the forecasts predict inflation will increase to 3.75% this year. BoE officials are going to monitor the wage growth closely.

Google: Alphabet Inc. (Google) acquired Wiz, a cloud-security startup for $32 billion in cash. The deal could help Google to catch up with Microsoft and Amazon in cloud-computing market. Wiz is going to join Google Cloud team and provide new security products.

MARKETS

Nasdaq	17,784.05	+0.17%
S&P 500	5,667.56	+0.51%
Dow	41,985.35	+1.20%
10-Year	4.25%	-5bps
Brent	71.61	+1.46%
DXY	104.15	+0.40%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

Goldman Sachs: The near-term equities performance will be affected by the impacts of tariffs on supply chain, costs of input and corporate profitability. Besides, there are tailwinds in equities as systematic traders and pension funds are likely to buy.

Morgan Stanley: Earnings outlooks are still within our soft-landing base case. The potential of stagflation increased, typically unfavorable to stocks and bonds. Markets are focusing on the upcoming fiscal reform and tax cuts as catalysts.

Fixed Income

Morgan Stanley: The relatively stable credit spreads are encouraging under the current market environment. The pricing of current spreads suggested that the markets require lower-than-average compensation for default risk given the high volatility level. It is a good sign that corporate cash flows are not declining rapidly and the recession risk is not high.

UBS: Switching cash into high-quality bonds can improve return and combat the corrosive risk effects of inflation. It could also help cushion the total return outlook amid the potential volatility in yields.

Economy

J.P. Morgan: Ongoing trade tensions between US and other countries are perceived as more harmful to domestic growth than to global growth, contributing to the weakening US dollar. We believe dollar has potential to depreciate further. A broad international diversification is recommended.

UBS: Cash rate could drop rapidly if there is a surprise on the downside in economic data. The economy could weaken further if the trade policy becomes more aggressive. It is possible that consumer spending and labor markets will weaken in that scenario.

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DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.