Monday Morning Markets ...
This is our Monday Morning Markets Update. Every week we update our analysis of equities, bond yields, exchange rates, commodity prices and crypto. Prices marked Saturday 8th February 2025.
Oil prices moved higher, Brent Crude at $74.66 from £72.53. Bond yields slightly lower in the week in the U.S.and UK, ten year bond yields trading 4.49% and 4.47% level respectively. Markets mixed across the board up 0.4%. Currencies : Steady this week. Sterling at $1.24 from $1.24 against the Dollar, and at €1.20 against the Euro from €1.20. The Euro down slightly at $1.03 against the dollar from $1.04.
Gold moved higher at $2,874 from $2,812. Bitcoin moved lower at $96,694 from $98,946.
So what does this suggest for equity values? Our value index, premium to value is 21.2%, with some stress remaining in Hong Kong. U.S. stocks appear overvalued by 36.6%. European stocks over by 20.7%, Asia now overvalued by 6.3%. Hang Seng stocks still offer value, Shanghai looks value for money compared to U.S. Nikkei looks over played.
Top line, "Cash no longer Trash, (Jamie Dimon), Bonds are Garbage ( Bill Gross), Equities Are Overvalued (Everyman), Bitcoin is worthless (Jamie Dimon), Most NFTs are junk (John Hargrave)". "Crypto is a ‘hot ball of money’ with very little intrinsic value", says hedge fund Starkiller Capital.
When it comes to understanding market moves, "Any explanation is better than none" (Nietzsche). Be careful out there ... and remember ...
"To understand the markets, you have to understand the economics" ... and we do!
Oil prices moved higher, Brent Crude at $74.66 from £72.53. Bond yields slightly lower in the week in the U.S.and UK, ten year bond yields trading 4.49% and 4.47% level respectively. Markets mixed across the board up 0.4%. Currencies : Steady this week. Sterling at $1.24 from $1.24 against the Dollar, and at €1.20 against the Euro from €1.20. The Euro down slightly at $1.03 against the dollar from $1.04.
Gold moved higher at $2,874 from $2,812. Bitcoin moved lower at $96,694 from $98,946.
So what does this suggest for equity values? Our value index, premium to value is 21.2%, with some stress remaining in Hong Kong. U.S. stocks appear overvalued by 36.6%. European stocks over by 20.7%, Asia now overvalued by 6.3%. Hang Seng stocks still offer value, Shanghai looks value for money compared to U.S. Nikkei looks over played.
Top line, "Cash no longer Trash, (Jamie Dimon), Bonds are Garbage ( Bill Gross), Equities Are Overvalued (Everyman), Bitcoin is worthless (Jamie Dimon), Most NFTs are junk (John Hargrave)". "Crypto is a ‘hot ball of money’ with very little intrinsic value", says hedge fund Starkiller Capital.
When it comes to understanding market moves, "Any explanation is better than none" (Nietzsche). Be careful out there ... and remember ...
"To understand the markets, you have to understand the economics" ... and we do!
Monday Morning Markets ... Equities ...
We track ten markets in our global equities model. The Dow, S&P and NASDAQ in the U.S.A, the FTSE, CAC and Dax in Europe. In Asia, Nikkei, Hang Seng, Shanghai and BSE feature.
Markets were mixed around the world this week. US stocks were down by 0.4% . European markets were up by 0.3%. Asian stocks were up by 1.4% with a strong move in Hong Kong offset by slippage in Tokyo.
We track ten markets in our global equities model. The Dow, S&P and NASDAQ in the U.S.A, the FTSE, CAC and Dax in Europe. In Asia, Nikkei, Hang Seng, Shanghai and BSE feature.
Markets were mixed around the world this week. US stocks were down by 0.4% . European markets were up by 0.3%. Asian stocks were up by 1.4% with a strong move in Hong Kong offset by slippage in Tokyo.
Monday Morning Markets ... Currencies
Currencies steady this week. Sterling at $1.24 from $1.24 against the Dollar, and at €1.20 from €1.20 against the Euro. The Euro down slightly at $1.03 against the dollar from $1.04.
We consider $1.25 and €1.18 as par values, Sterling "in play time" didn't last long.
Currencies steady this week. Sterling at $1.24 from $1.24 against the Dollar, and at €1.20 from €1.20 against the Euro. The Euro down slightly at $1.03 against the dollar from $1.04.
We consider $1.25 and €1.18 as par values, Sterling "in play time" didn't last long.
Monday Morning Markets ... Bond Yields ...
Bond yields moved lower in the week in the U.S, UK. US Ten year Treasury yields were at 4.49 from 4.54. UK ten year gilts were at 4.47 from 4.54. Japanese yields were up six basis points at 1.29 from 1.23.
We expect U.S. and U.K. ten year yields to average between 4.25 - 4.50 in 2025.
In the UK, prior to the Great Financial Crash [2000 - 2008] the average inflation rate was 2.0%, the average UK bank rate was 4.50%. Ten year gilt yields averaged 4.50%. Thirty year gilts averaged 4.60%. The average growth rate was 2.5%. The average unemployment rate was 5.0%. Earnings averaged 3.9%.
Bond yields moved lower in the week in the U.S, UK. US Ten year Treasury yields were at 4.49 from 4.54. UK ten year gilts were at 4.47 from 4.54. Japanese yields were up six basis points at 1.29 from 1.23.
We expect U.S. and U.K. ten year yields to average between 4.25 - 4.50 in 2025.
In the UK, prior to the Great Financial Crash [2000 - 2008] the average inflation rate was 2.0%, the average UK bank rate was 4.50%. Ten year gilt yields averaged 4.50%. Thirty year gilts averaged 4.60%. The average growth rate was 2.5%. The average unemployment rate was 5.0%. Earnings averaged 3.9%.
Monday Morning Markets ... Oil Prices Brent Crude ...
Oil prices Brent Crude basis moved to $74.66 from $72.53 last week. Q4 average was $74.61. Average for the year as a whole was $80.52. Brent crude is projected to trade between $70 and $80 a barrel in 2025, we mark at $75 with upside risks tied to US sanctions on Iran.
Market forecasts for Brent Crude Oil in 2025 indicate a generally bearish outlook, with prices expected to remain relatively constrained due to oversupply and weak demand. Here's a summary of the key forecasts:
Reuters survey: Brent crude is projected to average $74.33 per barrel in 2025
EIA forecast: The average price of Brent crude oil is expected to be $74 per barrel for the year, falling to $64 in 2026.
J.P. Morgan : Brent crude will average $73 per barrel in 2025, closing the year below $70
Goldman Sachs forecast: Average oil prices at $76 per barrel in 2025.
Despite OPEC+'s efforts to shore up the oil market, the overall sentiment suggests oversupply and tepid demand growth will likely keep Brent crude prices relatively subdued in 2025. However, geopolitical events and economic policy shifts could introduce volatility to these forecasts.
Weak demand outlook, particularly from China, is putting downward pressure on prices. The U.S. Federal Reserve's interest rate decisions in 2025 could impact economic growth and oil demand. Potential geopolitical tensions could add a $10 uplift to oil prices. Uncertainties related to Iran, Venezuela, and Russia could introduce upside risks.
Oil prices Brent Crude basis moved to $74.66 from $72.53 last week. Q4 average was $74.61. Average for the year as a whole was $80.52. Brent crude is projected to trade between $70 and $80 a barrel in 2025, we mark at $75 with upside risks tied to US sanctions on Iran.
Market forecasts for Brent Crude Oil in 2025 indicate a generally bearish outlook, with prices expected to remain relatively constrained due to oversupply and weak demand. Here's a summary of the key forecasts:
Reuters survey: Brent crude is projected to average $74.33 per barrel in 2025
EIA forecast: The average price of Brent crude oil is expected to be $74 per barrel for the year, falling to $64 in 2026.
J.P. Morgan : Brent crude will average $73 per barrel in 2025, closing the year below $70
Goldman Sachs forecast: Average oil prices at $76 per barrel in 2025.
Despite OPEC+'s efforts to shore up the oil market, the overall sentiment suggests oversupply and tepid demand growth will likely keep Brent crude prices relatively subdued in 2025. However, geopolitical events and economic policy shifts could introduce volatility to these forecasts.
Weak demand outlook, particularly from China, is putting downward pressure on prices. The U.S. Federal Reserve's interest rate decisions in 2025 could impact economic growth and oil demand. Potential geopolitical tensions could add a $10 uplift to oil prices. Uncertainties related to Iran, Venezuela, and Russia could introduce upside risks.
Monday Morning Markets ... Bitcoin ...
We mark Bitcoin at $96,694 from $98,946 last week. The Trump administration promises a new era for Bitcoin and crypto.
Analysts forecasts for 2025 range from $70,000 to over $200,000. Multiple analysts project Bitcoin to reach $200,000 by the end of 2025. Some more optimistic predictions range from $250,000 to $500,000. VanEck analysts forecast Bitcoin to hit approximately $180,000 at the cycle's peak. Changelly's technical analysis suggests a more conservative range of $93,072 to $114,857, with an average of $96,455.
We mark Bitcoin at $96,694 from $98,946 last week. The Trump administration promises a new era for Bitcoin and crypto.
Analysts forecasts for 2025 range from $70,000 to over $200,000. Multiple analysts project Bitcoin to reach $200,000 by the end of 2025. Some more optimistic predictions range from $250,000 to $500,000. VanEck analysts forecast Bitcoin to hit approximately $180,000 at the cycle's peak. Changelly's technical analysis suggests a more conservative range of $93,072 to $114,857, with an average of $96,455.
Monday Morning Markets ... Gold $...
We mark Gold at $2,874.66 from $2,812.06 last week. The outlook for gold prices in 2025 is predominantly bullish, with most analysts and financial institutions projecting significant increases. Gold broke above long-term resistance at $2,075 in 2024. The over extension against trend evident.
Price targets: Many forecasts predict gold reaching $3,000 per ounce or higher by the end of 2025. Notable predictions include:
Driving Factors
We mark Gold at $2,874.66 from $2,812.06 last week. The outlook for gold prices in 2025 is predominantly bullish, with most analysts and financial institutions projecting significant increases. Gold broke above long-term resistance at $2,075 in 2024. The over extension against trend evident.
Price targets: Many forecasts predict gold reaching $3,000 per ounce or higher by the end of 2025. Notable predictions include:
- Goldman Sachs: $2,910
- J.P. Morgan: $3,000
- Bank of America: $3,000
- Bloomberg Terminal forecasts a range between $1,710 and $2,728
Driving Factors
- Federal Reserve policy: Expected interest rate cuts of 75 to 100 basis points in 2025?
- Increased central bank demand, particularly from China and emerging markets
- Geopolitical tensions and economic uncertainties
That's all for this week ... "to understand the markets you have to understand the economics" and we do ...
© 2025 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.
The material is based upon information which we consider to be reliable but we do not represent that it is accurate or complete and it should not be relied upon as such. We accept no liability for errors, or omissions of opinion or fact. In particular, no reliance should be placed on the comments on trends in financial markets. The receipt of this email should not be construed as the giving of advice relating to finance or investment.
© 2025 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.
The material is based upon information which we consider to be reliable but we do not represent that it is accurate or complete and it should not be relied upon as such. We accept no liability for errors, or omissions of opinion or fact. In particular, no reliance should be placed on the comments on trends in financial markets. The receipt of this email should not be construed as the giving of advice relating to finance or investment.