Wall Street Ends Higher as Other Markets Stay Closed

Posted on May 1, 2025 by Ignacio Teson

While markets worldwide were mostly closed for Labor Day, Wall Street remained open and ended the day in the green.

Market operators did not have clear references for international stocks.

Global markets were sluggish following the contraction of the U.S. economy, but Wall Street saw gains thanks to strong tech earnings reports from Microsoft and Meta. Meanwhile, the Bank of Japan’s lowered growth forecasts, attributed to U.S. trade tariffs, led to a drop in the yen.

In New York, the Nasdaq rose 1.5%, the S&P 500 gained 0.6%, and the Dow Jones edged up 0.2%. Despite a U.S. GDP contraction in Q1, Wall Street ended higher, bolstered by solid tech results.

[[SPX-graph]]

In Asia, Japan’s Nikkei jumped, but Europe’s FTSE stalled, causing the MSCI global equity index to dip into the red.

International Markets

Gold, which had soared as a safe-haven asset this year, dropped to a two-week low as traders locked in some profits amid signs of easing in the global trade war.

Meanwhile, most European bond markets were closed for the May Day holiday. British 10-year bond yields fell, and U.S. Treasury yields dropped back to 4.15%. Analysts are now forecasting four U.S. rate cuts for the remainder of the year.

Crude oil prices stabilized at $61 per barrel after a drop on Wednesday, fueled by U.S. GDP data and indications that Saudi Arabia, the world’s largest oil exporter, plans to increase production this year.

Morgan Stanley Prepares to Offer Cryptocurrency Services

Posted on May 1, 2025 by Ignacio Teson

Morgan Stanley, one of the world’s leading investment banks, is moving forward with plans to integrate cryptocurrency trading into its investment platform, E*Trade.

Barclays is another bank rumoured to be preparing to offer cryptos.

The initiative would include major digital assets such as Bitcoin and Ethereum, with a projected rollout in 2026.

The firm is currently exploring partnerships with established companies in the crypto ecosystem to build the necessary infrastructure for this expansion. The move comes amid a more favorable regulatory environment in the United States, driven by the administration of Donald Trump, who has publicly voiced support for the crypto industry.

Intensifying Competition in the Crypto Space

Until now, Morgan Stanley has only offered crypto-related products—such as Bitcoin ETFs and derivatives—to its high-net-worth clients. With this new strategy, the bank aims to directly compete with platforms like Coinbase and Robinhood by expanding access to retail investors.

This initiative aligns with a broader trend among traditional financial institutions. Firms like Fidelity and Interactive Brokers have already entered the crypto space, encouraged by growing investor interest and a more open regulatory landscape. As demand for digital assets continues to rise, major players in the financial sector are racing to secure their place in the evolving market.

Gold Pulls Back as Tensions Ease on Softer Tariff Measures

Posted on May 1, 2025 by Ignacio Teson

In the final session of April, spot gold fell over 1% during trading, driven by speculation that the Federal Reserve may resume interest rate cuts.

Gold has reached record highs this year.

April had been a standout month for gold—the safe-haven asset of choice amid the trade war sparked by U.S. President Donald Trump—rising 6% and capping off a strong four-month rally. However, on the last day of the month, gold prices dipped following reports of potentially softer tariff measures. The next moves in the market will likely depend on whether the Federal Reserve moves forward with interest rate cuts.

[[XAU/USD-graph]]

These expectations gained traction after data revealed that the U.S. economy contracted at an annualized rate of 0.3% in the last quarter. The drop was attributed to companies rushing to import goods before Trump’s tariffs took effect.

Traders are now betting that the Fed may implement up to a 100 basis point rate cut in 2025, especially if clearer signs of economic weakness emerge by June. Despite the recent pullback, gold remains in a bullish trend, and today’s data suggests a smoother path for the Fed’s initial rate cuts—an environment typically supportive of gold prices.

That said, gold may trade sideways in the near term after its strong rally to $3,500. As a non-yielding asset and a hedge against political and financial turmoil, gold tends to perform well when interest rates are low.

Meanwhile, U.S. Personal Consumption Expenditures (PCE) data showed no change in March after a 0.4% increase in February. On a quarterly basis, core PCE (excluding food and energy) rose 3.5%, accelerating from the 2.6% rate seen in the final quarter of last year.

Is a New Tariff Deal on the Horizon?

U.S. Treasury Secretary Scott Bessent said Thursday that the United States is likely to revisit the Phase One trade deal signed under President Trump and expressed confidence that Beijing would be open to reaching a new tariff agreement.

“I’m confident the Chinese will want to strike a deal,” Bessent said. “As I’ve mentioned, this will be a multi-step process. First, we need to de-escalate the current situation, and over time, we’ll begin working toward a broader trade agreement.”

Bitcoin Surges to $96,000 Amid Crypto Market Rally

Posted on May 1, 2025 by Ignacio Teson

Cryptocurrencies are mostly trading higher this Thursday, May 1, with Bitcoin standing out as it surpasses $96,000.

Trump has created a volatile environment for Bitcoin.

Experts believe that just as gold hit record highs amid the flight to safety triggered by the trade war, Bitcoin could experience a similar trajectory.

[[BTC/USD-graph]]

Bitcoin may be following gold’s path as a store of value in the face of a volatile macroeconomic environment. A recent report highlights that as digital assets gain broader global legitimacy, Bitcoin is increasingly being seen as a modern alternative to gold for value preservation.

Central Bank Activity

In this context, foreign central banks have reduced their holdings of U.S. Treasury bonds to 23%—a 22-year low—while gold reserves have risen to 18%. It’s worth noting that Bitcoin surged from $9,000 to $60,000 in 2020 under similar conditions, suggesting a comparable outcome could occur in 2025.

However, Bitcoin’s bullish narrative could be challenged if the global economy enters a recession in 2025. In such scenarios, investors tend to prioritize liquidity and traditional safe-haven assets like cash or U.S. Treasuries over speculative assets like Bitcoin, as was recently pointed out.

So far in 2025, rumors have emerged of large-scale purchases by China, adding to those by India and Russia as they seek to diversify away from the U.S. dollar.

Dow Jones Drops 3.1% in April on Tariff Concerns

Posted on May 1, 2025 by Ignacio Teson

This Friday, New York’s major indexes closed mixed following the release of economic data showing a slowdown in activity and weaker-than-expected job creation.

Market operators watched the session closely.

On Wednesday, April 30, Wall Street closed with mixed results amid rising market volatility, as several reports pointed to a deceleration in the U.S. economy. Over the month, the main benchmarks lost as much as 3.1%.

[[SPX-graph]]

April was a turbulent month for the New York Stock Exchange. The major indices gradually trimmed early losses, but initial panic over new U.S. tariffs led to sharp sell-offs, pushing the S&P 500 briefly into correction territory.

Index Performance on Wednesday:

Dow Jones Industrial Average: +0.35% to 40,669.36 points
S&P 500: –0.01% to 5,560.16 points
Nasdaq Composite: –0.09% to 17,446.34 points

Monthly Performance:

Dow Jones: –3.1%
S&P 500: –1%
Nasdaq Composite: –0.02%

Trade Tensions Ease—Briefly

Market sentiment had improved mid-month on hopes that the worst of the tariff announcements was behind. President Donald Trump signed two executive orders before Tuesday’s market close, aimed at softening the blow of upcoming 25% tariffs on auto parts. These included tax credits and tariff exemptions on certain materials.

The move came during Trump’s visit to Michigan, a key auto manufacturing hub, just ahead of the tariff implementation. Commerce Secretary Howard Lutnick also told CNBC the U.S. was close to finalizing a major trade agreement, although no deal has been announced yet.

U.S. Economy on Shaky Ground

The early April losses were largely driven by fears that trade tariffs would hurt the U.S. economy—and recent data confirms those concerns.

According to figures released Wednesday, the U.S. economy unexpectedly shrank by an annualized 0.3% in Q1 2025. This marked a sharp reversal from 2.4% growth in Q4 2024. Economists had expected a modest 0.2% expansion.

Additionally, private sector job growth slowed significantly. U.S. employers added just 62,000 jobs in April, according to the ADP National Employment Report—well below expectations and down from the downwardly revised 147,000 in March.

Mexican Peso Slips on Stronger Dollar but Ends the Month with Strong Gains

Posted on May 1, 2025 by Ignacio Teson

The Mexican peso weakened against the U.S. dollar on Wednesday, as the greenback strengthened broadly following news that the U.S. economy contracted in the first quarter.

The exchange rate closed the day at 19.6136 pesos per dollar. Compared to Tuesday’s official closing of 19.5755 (Banxico data), this marked a depreciation of 3.81 centavos, or 0.20%. The dollar traded within a range of 19.5202 to 19.6527 pesos during the session. Meanwhile, the U.S. Dollar Index (DXY), which measures the dollar against a basket of six major currencies, rose 0.46% to 99.67 points.

[[USD/MXN-graph]]

U.S. Economy Contracts in Q1

According to the U.S. Department of Commerce, GDP shrank by 0.3% in Q1, reversing a 2.4% increase in the previous quarter. The decline was largely attributed to a spike in imports ahead of potential tariff hikes. The news triggered concerns of stagflation, especially after a disappointing employment survey and a sharp drop in consumer confidence, which fell to its lowest level since August 2020 (Conference Board data).

A Strong Month for the Peso

Despite the minor drop in this session, the peso had a strong April, buoyed by the U.S. government’s decision not to include Mexico in its global tariff hikes. The peso gained 84.86 centavos or 4.14% from its March close of 20.4604. Ongoing trade tensions between China and the U.S. have shifted market attention away from Mexico, boosting risk appetite for the peso.

Javier Milei Reaffirms Argentina Will Return to Debt Markets

Posted on April 30, 2025 by Ignacio Teson

President Javier Milei confirmed once again that Argentina intends to return to international financial markets but stopped short of giving a specific timeline.

Milei intends to repay the IMF with new private debt.

Speaking at Expo EFI 2025, he stated: “Since country risk will fall below 700 basis points, we will return to international markets.” This reiterates a stance the government has promoted since securing a $20 billion loan from the IMF, in addition to funding from other international institutions.

Despite this commitment, the administration has yet to clarify when Argentina will re-enter the markets. Analysts speculate it likely won’t happen before the October elections, and some even forecast a mid-2026 return.

During his nearly two-hour speech, Milei reviewed his administration’s economic policies and defended his approach vigorously, emphasizing achievements such as the 15-point fiscal adjustment, the IMF agreement, reforms led by Federico Sturzenegger, and what he claimed was a 22% drop in poverty—lifting 10 million Argentines out of poverty.

Milei’s Words

The libertarian president also acknowledged that inflation remains high but predicted it would significantly decline by mid-2026, citing the delayed effects of monetary policy, which typically lag by 18 to 24 months.

“We fixed the money supply in the middle of last year, which means inflation already has a death date—midway through next year. So now is the time to start thinking about growth.”

Bitcoin Tops $94,000 While Broader Crypto Market Declines

Posted on April 30, 2025 by Ignacio Teson

Cryptocurrencies are trading lower across the board—except for Bitcoin, which stands out as the only major crypto posting gains on Wednesday, April 30.

According to analysts, Bitcoin may be mirroring gold’s behavior during past periods of global uncertainty, particularly when the precious metal hit all-time highs amid the U.S.–China trade war.

Bitcoin is increasingly being viewed as a potential store of value in today’s volatile macroeconomic environment. As digital assets gain global legitimacy, Bitcoin is positioning itself alongside gold as a modern alternative reserve asset.

[[BTC/USD-graph]]

In this context, foreign central banks have reduced their holdings of U.S. Treasury bonds to 23%—a 22-year low—while gold reserves have risen to 18%. It’s worth noting that Bitcoin surged from $9,000 to $60,000 in 2020 under similar circumstances, suggesting a comparable scenario could unfold in 2025.

However, this bullish narrative for Bitcoin may face challenges if the global economy slips into a recession next year. In such a scenario, investors tend to prioritize liquidity and traditional safe-haven assets like cash or U.S. Treasuries over more speculative assets such as Bitcoin.

Traditional Markets

Meanwhile, international markets are falling sharply after data revealed that the U.S. economy contracted in the first quarter of the year and that private-sector hiring in April came in below expectations.

The New York Stock Exchange opened Wednesday with steep losses. In early trading, the Dow Jones was down 0.7%, the Nasdaq dropped 2.07%, and the S&P 500 fell 1.35%.

Cryptocurrencies Curb ETF Enthusiasm, but Bitcoin Holds at Support Level

Posted on April 29, 2025 by Ignacio Teson

Despite a market correction, Bitcoin continues to solidify its role as a store of value, driven by growing institutional interest and ongoing global economic uncertainty.

Bitcoin is gaining momentum as traditional markets surge.

Cryptocurrencies are trading lower, despite a temporary reprieve in U.S. tariff tensions and sustained institutional demand for spot Bitcoin ETFs. In this context, Bitcoin is down 0.6%, trading around $94,000 on Binance. Among the top 20 most-traded cryptocurrencies, losses reach up to 2.7%, led by Hedera, Toncoin, and Chainlink (down around 2.5%).

In the crypto-related equity space, shares of Coinbase, MicroStrategy, and several mining companies have pulled back after strong gains last week. This cooldown comes amid a tense economic backdrop, reflected in mixed signals from Wall Street. The good news is that there have been no new attacks from Trump in recent days—but the bad news is that the tariff situation remains unresolved.

[[BTC/USD-graph]]

On the macroeconomic front, the Dallas Fed Manufacturing Index saw a sharp decline, marking its worst performance since the COVID-19 pandemic. Coupled with a significant drop in cargo shipments from China to the U.S. and concerns over rising prices for Chinese goods, trade tensions are fueling fears about the global economic outlook.

What the Market Is Watching

Despite this backdrop, investor attention remains focused on key economic indicators, including consumer confidence, Q1 GDP, and this week’s upcoming jobs data. Expectations of interest rate cuts from the Federal Reserve remain strong, with markets pricing in three to four cuts by year-end.

In the crypto market, appetite for spot Bitcoin ETFs continues to grow. According to Farside Investors, net inflows surpassed $3.2 billion last week alone, with BlackRock’s iShares Bitcoin Trust (IBIT) drawing in $970.9 million. The ETF market is progressing in a “two steps forward, one step back” pattern—exactly as many analysts predicted.

Bitcoin remains an appealing asset, especially for institutional investors, who continue to see its potential as a safe haven during periods of economic and geopolitical uncertainty. Notably, the state of Arizona is advancing legislation to establish Bitcoin reserves, potentially becoming the first U.S. state to officially adopt the asset—marking a milestone for institutional adoption.

Bitcoin Price Outlook

From a technical standpoint, Bitcoin is trading in a range between $90,000 and $98,000, with volatility that could trigger significant liquidations on both long and short positions. According to Bitget, a $1,000 drop could liquidate over $146 million in long positions, while a similar upside move could wipe out more than $279 million in shorts—suggesting that the market is bracing for a short-term correction.

Despite these fluctuations, overall sentiment remains optimistic. Whales continue to accumulate Bitcoin, and institutional investors are reaffirming their confidence, reinforcing a bullish outlook for the asset in the weeks ahead.

Mexican Peso Holds Steady Ahead of Key Data and U.S.-China News

Posted on April 29, 2025 by Ignacio Teson

The Mexican peso closed virtually unchanged against the dollar in Tuesday’s session, as traders remained cautious ahead of key economic data releases and developments in U.S.-China trade relations.

The Mexican Peso is volatile amid the US-China Trade War.

The exchange rate ended the day at 19.5755 pesos per dollar, compared to Monday’s official close of 19.5784, according to data from the Bank of Mexico (Banxico). This represented a marginal gain of 0.02% for the peso—less than one cent.

During the session, the dollar traded within a range of 19.6506 to 19.5461 pesos. Meanwhile, the U.S. Dollar Index (DXY)—which measures the greenback against a basket of six major currencies—rose 0.27% to 99.20.

[[USD/MXN-graph]]

Mexican Peso Outlook and GDP Figures

Investors are closely watching for the release of important economic indicators, particularly the GDP figures for both Mexico and the United States due on Wednesday. These results are expected to provide insight into the impact of U.S. tariffs.

Some analysts have forecast a contraction in Mexico’s GDP during the first quarter. However, stronger-than-expected data from the Global Indicator of Economic Activity (IGAE) have cast doubt on just how resilient the Mexican economy may be.

The peso’s recent rally has stalled in the absence of fresh news on U.S.-China trade talks, despite signs that Washington is considering tariff reductions on auto parts and trucks.

Looking ahead to the overnight session, the exchange rate is expected to remain within a range of 19.52 to 19.66, as investor interest in the peso remains limited ahead of Wednesday’s first-quarter GDP reports.