The infoshot to help kick-start your week
Last Week
-
In the run up to last Sunday’s German election, the German market continued to outperform many of its European counterparts and the US, as investors continued to price-in the likelihood of a new government led by Friedrich Merz and the Christian Democrat Union (CDU).
With the result now confirmed, Merz will focus on building a strong coalition and rebooting the German economy. Changes to the constitutional limit on borrowing, introduced in 2009, are expected with the German defence sector likely to be one of the main beneficiaries. As the US urges Europe to spend more on defence, companies in the sector should benefit from any fiscal reform that frees up capital for military investment. Analysts at Citigroup noted that increasing spending on defence from 2% to 2.5% could increase equity valuations of these companies from 15% to 20%.
-
US stocks tumbled on Friday following poor economic data and fears over new tariff threats and softening consumer demand. Business and consumer sentiment soared following Trump’s victory in November, but Friday’s tumble suggests that businesses and consumers were becoming increasingly concerned about the policies coming out of the White House.
The NASDAQ, Dow Jones and S&P 500 all slid throughout the day, and the S&P suffered its largest single day drop in more than two months – effectively wiping out all market gains since Trump’s election victory.
Reportedly backed by Donald Trump and Peter Thiel when it went looking for investors in 2018 – on Friday the cryptocurrency exchange Bybit, was hit by the biggest cryptocurrency theft in history. Hackers stole £1.1bn worth Ethereum from the Dubai-based firm by exploiting security features and transferring the money to an unidentified address.
Bybit’s founder, Ben Zhou, said the money could be covered by the firm or by a loan from partners. However, this has not stopped a surge in withdrawals as the world’s second-largest cryptocurrency exchange received more than 350,000 requests.
-
Last Monday, a high-profile meeting between President Xi Jinping and Chinese tech leaders signalled that the government was ready to provide more support for the sector.
This was followed up by Alibaba, China’s leading e-commerce and cloud computing company, reporting faster than projected sales growth in the last quarter. Net income in the quarter reached 48.945bn yuan ($6.72bn), way ahead of forecast and more than three times what was reported in the same quarter last year. It’s Cloud Intelligence Group also posted year on year growth of 13%. These strong results come hot on the heels of AI start up DeepSeek dominating global headlines in January and continue the renewed interest in the Chinese tech sector.
In Japan, government bond yields continue to trend upward in response to the country’s recent economic recovery and rising prices. Bank of Japan (BOJ) Governor, Kazuo Ueda confirmed that if the outlook for prices continues to improve, more rate hikes will follow.
Market Pulse
Coming Up
- Germany GDP data, Tuesday 25th February 2025 at 2:00am
- US Initial Jobless Claims, Thursday 27th February 2025 at 8:30am
- China PMI data, Friday 28th February 2025 at 8:30pm
Notice:
For professional advisers only, Copia does not provide financial advice, and the contents of this document should not be taken as such. The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.Open document settingsOpen publish panel
