Russians Have a New Asset in America: Donald Trump

Matin Weekly Markets Update (February 21st - February 28th, 2025) - Week 9

Market Overview

February emerged as a month of considerable market volatility, characterized by a pronounced downturn in the US stock market, juxtaposed against the unexpected resilience of European indices. The geopolitical landscape, increasingly complex and fraught with tension, casts a long shadow over global financial markets, with the specter of trade conflicts threatening further economic instability.

The diplomatic arena has been equally tumultuous, with the US Administration's Middle East peace initiatives encountering significant challenges. A particularly contentious meeting between President Trump and Ukraine's President Zelensky, further complicated by Vice President JD Vance's involvement, has strained transatlantic relations. These tensions have prompted Europe to contemplate a strategic recalibration, exploring pathways to greater autonomy—including the potential establishment of an independent military force. Such a development could have profound implications for the US trade dynamics, potentially expanding the trade deficit by disrupting the current military equipment export ecosystem.

Wall Street's sentiment reflects a growing disillusionment with the rapidly evolving policy landscape. Initially buoyed by promises of fiscal discipline, trade balance optimization, inflation moderation, and reduced interest rates, financial markets now observe with increasing uncertainty as corporate leadership attempts to navigate a policy environment as unpredictable and treacherous as quicksand. The disconnect between initial market optimism and the complex realities of policy implementation has created a climate of profound strategic ambiguity.

Equities

The S&P 500 ended the week down 0.98%, reflecting the broader market decline.?The technology sector was particularly hard hit, with the NASDAQ Composite falling 5.36%.?Tesla and AppLovin were among the biggest losers, with their shares plummeting by 13.27% and 21.57% respectively.??

An important note on Crypto this week; the massive theft of $1.5 billion from the Bybit platform by North Korean hackers is driving out investors for several key reasons for two reasons:

·?????? Loss of Confidence:?Such a significant security breach undermines trust in the platform and the security of cryptocurrencies in general.?Investors may fear that their assets are not safe on Bybit or other similar platforms.???

·?????? Fear of Further Hacks:?This incident could signal increased vulnerability to future attacks.?

Fixed Income

US Treasury yields fell, indicating growing concerns about the economy.?The 10-year yield decreased by five basis points to 4.23%, while the 2-year yield dropped eight basis points to 4.00%.???

Commodities

Oil prices continued their downward trend, with Brent crude falling 2.60% and WTI dipping below $70 per barrel.?Gold also suffered a significant drop, falling by around 3% to USD 2835.?Grain prices corrected in Chicago, with wheat expected to experience its worst weekly decline of 2025.???

GCC

Most GCC indices recorded negative returns, with the exception of Bahrain, Kuwait, and Abu Dhabi.?Bahrain posted the largest weekly gains (1.13%), while Oman underperformed the most, with a loss of 0.95%.???

Islamic Markets

The S&P Global BMI Shariah index fell by 2.33%, reflecting the broader market downturn.?The DJ Islamic Market MENA index also declined, falling by 1.97%.???

The Week Ahead

The European Central Bank is expected to cut rates on Thursday, while the US will release its monthly employment figures on Friday.?The ongoing tariff situation continues to be a major source of uncertainty, and investors will be closely monitoring developments on this front.???