Monday's Markets Update (March 17, 2025)

18 Mar 2025 by rate3

On Monday, stocks continued Friday's rebound, encouraged by an absence of negativity coming from the White House, despite the manufacturing index dropping to the lowest level in two years and the increasing pressure on the Fed due to input prices rising the fastest during that period, as well as rapidly declining business optimism and weak capital spending. The housing index plunged to a seven-month low, despite some relief on the regulatory side.

World's Markets:

The EU market is on the rise due to the momentum from peace talks.
Brazilian economic activity has jumped to a seven-month high as the real continues to strengthen, attracting inflows due to high Selic rates. The local market index is up, driven by resource-heavy equities, as Chinese data points to the potential for increased demand.
India registered the smallest imports in four years due to a drop in energy purchases. Local markets are up, boosted by pharma and finance, rising on Chinese news.
China's CCP announced a Special Action Plan to Boost Consumption, which includes measures to increase both household income and spending, as well as population growth. Consequently, the local stock market rose. Meanwhile, the local jobless rate hit a two-year high of 5.4%, and real estate investments dropped by 10%, while industrial output growth continues to slow down, primarily in manufacturing.
Commodities and Currencies:

The dollar nears a five-month low in expectation of an economic slowdown. Gold hovers near all-time highs. Oil jumped on rising tensions in the Red Sea.
Crypto:

BTC, ETH, SOL, ADA, and other coins are on the rise, following stocks.
The State Of Markets: In green, all markets are rising due to an absence of negativity that has traditionally emanated from the White House over the past two months.

Details

World Markets

The OECD G20 growth forecast lowered to 3.1% from 3.3% (2025) and to 2.9% from 3.2% (2026), citing tariffs war. The local economy is expected: 2025 - to grow 2.2% vs. 2.4% (December estimate); 2026 - 1.6% vs. 2.1%. Canada: 2025 and 2026: 0.7% for both years (from 2%). Mexico: -1.3% (2025) and -0.6% (2026). Eurozone: +1.0% in 2025 (vs. +1.3%) and 1.2% in 2026 (vs. 1.5%), with downgrades for Germany, France, and Italy. UK: +1.4% in 2025 (vs. 1.7%) and 1.2% in 2026 (vs. 1.3%). China is expected to expand +4.8% this year (vs. 4.7%) before slowing to 4.4% in 2026.

Comment: Economic Consequences of the MAGAntilism.

According to the OECD, the White House's 'tariff games' have already cost the G20 a -0.2% growth in 2025, followed by -0.3% in 2026, which includes -0.2% for the American economy (with GDP growth cut from 2.2% to 1.9%). In dollar terms, this would result in a "red-ink" of USD -430B for the OECD, including USD -60B for America.

Essentially, Americans will pay the price of tariffs nearly equivalent to the Trump Official Coin market capitalization at its peak on January 20 (~USD 50B).

On the other hand, tariffs have played well into China's hands, with the economy now expected to rise by +4.8% (up from 4.7% previously). Additionally, we see more second- and third-tier economies benefiting from a new redistribution of trade due to geopolitics and tariffs. For example, Indonesia's exports of vegetable oil, iron, steel, and machinery have skyrocketed to a two-year high, with deliveries particularly increasing to the USA and China.

Therefore, we are doing remarkably well, aligning closely with my early forecasts of the economic consequences of the White House's new policy of 'MAGAntilism.'