Wednesday's Markets Update (February 12, 2025)

13 Feb 2025 by rate3

On Wednesday, stocks ended mixed again, pressured by core inflation rising by 0.5%, but supported by comments from the House Speaker regarding tariff exemptions. The dollar strengthened following the hot CPI report. The EU Market Index reached a 25-year high as European stocks have continued to outperform American equities since the start of 2025 due to Trump's economic policies. BTC, ETH, and SOL fluctuated, remaining in a bearish trend.

Details

Annual inflation rose to 3% in January, exceeding forecasts and December's 2.9%, signaling stalled progress. Energy costs increased 1%, while core inflation unexpectedly climbed to 3.3%. Shelter and transportation costs drove the rise. 1Y trend: "Down" (BLS)

Crypto

Robinhood's Q4 crypto trading volume soared 400% to $70B, driven by BTC surpassing $100K and renewed crypto interest. Total transaction revenue doubled to $672M, with crypto revenue surging 700% to $358M and equity revenue up 144% to $61M. (source)

World Markets

European stocks hit new highs as strong earnings offset Fed hawkishness. The STOXX 50 gained 0.3%, nearing a 25-year peak, while the STOXX 600 edged up 0.1%. Heineken, Kering, and banks like Santander led gains 1Y trend: "Side"
India's industrial production grew 3.2% YoY in December 2024, below forecasts of 3.9%, slowing from November's revised 5%. Manufacturing eased to 3%, while mining and electricity rose. Monthly output rebounded 6.1%. April-December growth was 4%. 1Y trend: "Side" (MOSPI)

Currencies

The dollar index neared 108.5, its highest in over a week, as CPI data revealed rising inflation, with headline at 3% and core at 3.3%. The Fed remains cautious on rate cuts, with Powell reiterating no rush. Traders expect only a 25 bps cut by December. Trump urged lower rates, linking them to tariffs. 1Y trend: "Up"

Comment: What's Up With AI?

We—those of us who think for a living—are not all going to be unemployed because of AI. That belief is fundamentally misguided. Throughout history, new technologies have never resulted in a net loss of jobs. Instead, they have always prompted people to acquire new skills, and the number of jobs has only increased.

Consider the transition from typewriters to computers. One person with a typewriter has evolved into several individuals: those who input text (analysts), correct it and add images (assistants), create PowerPoint presentations and spread it (consultants). The same dynamic will occur with AI. For every person who currently generates analytical reports, there will be many others involved in sorting and fine-tuning information for AI (training it), crafting prompts, and interpreting its results.

So, analysts, secretaries, and traders can relax. Do not buy into the mainstream media hysteria—AI is not coming for your jobs, not yet :)