Weekly Market Update (May 04, 2025)
- Market Hedwig
- 12 minutes ago
- 2 min read

HIGHLIGHTS
The S&P 500 jumped 3% this week. Earnings results from several of the Magnificent 7 are mixed. Market sentiment improved on positive trade deal headlines, while US economic data is still directionless. Job market is solid but Q1 GDP is weak.
Dollar: The selloff of US dollar has stabilized recently, after Trump is more willing to strike a trade deal with China and stepped back from the comments about removing Fed’s Chair. Markets believe USD is oversold short-term, and likely to consolidate in the near term.
Earnings: Mega tech earnings, including those of Meta and Microsoft, were positive. Meta beat revenue expectations and increased its capex budget in 2025. Microsoft also beat revenue expectations driven by the cloud growth. Overall, the results boosted confidence in the fundamentals underpinning AI trend.
Tariff: Key indicators are reflecting tariff impacts, such as PMI and new export orders. Order frontloading might not be over, especially for products that remain exempt. Some data could remain steady for a longer period of time.
MARKETS
17,977.73 | +3.42% | |
S&P 500 | 5,686.67 | +2.92% |
Dow | 41,317.43 | +3.00% |
10-Year | 4.32% | +5bps |
Brent | 61.43 | -8.31% |
DXY | 100.04 | +0.45% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Standard Chartered: More than 65% of S&P500 companies have reported earnings so far, and Q1 earnings have been strong. However, the earnings growth guidance for the remainder of 2025 has softened. Some companies withdrew financial guidance due to macro uncertainty.
Goldman Sachs: Looking forward, S&P500 is likely to maintain its superior Return on Equity (ROE) relative to other developed markets. However, the increasingly widening of ROE gap will be challenging given the headwinds to profit margins.
Fixed Income
Morgan Stanley: Patterns of yield curves since last October suggest increasing concerns about stagflation and widening term premiums. Front-end real rates are dropping due to the near-term growth prospects dimming on policy headwinds. Long-end rates increased due to debt sustainability fears.
Standard Chartered: If there is no resurgence of inflation, 10Y yields are likely to re-test 4% level in the near term. We will be cautious about increasing exposure at that level. In the longer term, we overweight developed market investment-grade government bonds and target an average maturity profile of 5-7 years.
Economy
UBS: We expect US economy to slow more than other countries, and the fiscal deficits remain the focus. Sentiment indicators are suggesting negative readings driven by the tariff policies. US debt-to-GDP ratio was at 123% as of last December, which means the increasing interest costs would be headwind for the USD.
J.P. Morgan: Domestic factors contributed to the forecast downgrade of exports. Tariffs offset expected growth increase from positive changes in countries such as Japan (rising wages and inflation) and Germany (rising government spending).
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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.
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