SVET Markets Weekly Update (January 6–10, 2025)
On Week 2, the S&P, Nasdaq, and Dow all closed in deep red. The unemployment rate unexpectedly dropped to 4.1%, which might be attributed to a seasonal spike in hiring within the retail and hospitality industries; however, the manufacturing sector is down, affected by a notable slump in factory orders. Meanwhile, the dollar index rose to a 3-year high, putting pressure on other currencies such as the yen, which remains at a 6-month low against the dollar, and the offshore yuan, which has weakened to a 16-month low, breaching the 7.35 level. Additionally, natural gas prices surged over 10% this week, driven by forecasts predicting extreme cold weather. In the Euro Area, inflation accelerated to 2.4%, which has been accompanied by declines in consumer confidence and manufacturing activity. BTC, ETH with the rest of crypto-market have descended to and then mostly stayed at their December’s price levels, wiping out all growth in 2025 as traders react knee-jerk to the massive sell-off in stocks.
On Monday, equities closed mostly in the red despite a positive opening, led by gains in chipmakers, which were boosted by later-revoked news of narrower-than-expected Trump tariffs. At the same time, the manufacturing sector continued to deteriorate, experiencing a sudden slump in factory orders. German inflation accelerated to yearly highs. The dollar dipped marginally, leading to appreciation in most major currencies as traders bought into rumors of easier tariffs. Still, the yuan continues to weaken due to economic slowdown and loosening CCP policies, which attempt to compensate for low growth by devaluing the currency. BTC surged, crossing the 100K line again, with ETH edging above 3.7K.
Details
The S&P Global Composite PMI rose to 55.4 in December, driven by strong growth in the service sector. Manufacturing continued to contract. New orders increased, and employment grew for the first time in five months. 1Y trend: “Up” (SP)Factory orders fell 0.4% in November, less than expected. Durable goods orders declined, led by transportation and fabricated metals. Non-durable goods orders increased. (Census)
Crypto
Crypto ETPs saw $585M in inflows in the first three days of 2025, following a record-breaking 2024 with $44.2B in inflows. The launch of US BTC ETFs was a key driver. BTC ETPs dominated, while ETH and other cryptocurrencies also saw significant inflows. The US led in inflows, while Canada and some European countries (incl Sweden and Germany) saw outflows. (source)
World Markets
The HCOB Eurozone Composite PMI rose slightly to 49.6 in December, but remained in contraction territory. Manufacturing declined sharply, while services showed modest growth. Germany, France, and Italy activities are down. Spain (fastest since March 2023) and Ireland were up. New orders fell, and employment dropped. Input costs rose, driving higher inflation. 1Y trend: “Down” (PMI)German inflation accelerated to 2.6% (highest in 11 months, led by services and food) in December 2024, driven by higher service and food prices. Core inflation also edged higher. The EU-harmonized CPI also rose above expectations. 1Y trend: “Side” (DE)
Currencies
The offshore yuan weakened to a 16-month low, breaching the 7.35 level despite PBoC efforts to stabilize it. The stronger dollar, falling Chinese yields, and rising trade tensions pressured the currency. The PBoC signaled a shift towards lower interest rates to address economic slowdown and deflation risks. 1Y trend: “Up, Depreciating”
Commodities
Natural gas surged over 10% driven by forecasts of extreme cold. Temperatures are expected to plunge, potentially increasing demand for heating. However, rising LNG exports may limit price gains. 1Y trend: “Up”WTI crude oil prices dipped slightly, closing a 5-day winning streak. A stronger dollar and weaker-than-expected economic data dampened investor sentiment. 1Y trend: “Side”
On Tuesday, equities were deep in the red, led by tech, as job openings continued to rise along with business activity, pushing treasury yields to an 8-month high. Imports jumped to the second highest level in recorded history as companies increased overseas shipments ahead of Trump’s tariffs. EU inflation is rising, driven by energy prices, while the unemployment rate remains at a record low, forcing businesses to pay increasingly higher salaries, which leads to higher costs and cyclical price increases. At the same time, EU manufacturing activities continue to shrink, including the construction industry, which is nearing its third year of contraction. All of this sets Europe on a path to prolonged stagflation. China’s foreign reserves reached an 8-month low as the CBC has been trying to soften the yen’s decline over the past year. The Indian economy is slowing significantly, with GDP growth falling to 4-year low. BTC and ETH have dropped to their December levels, wiping out all growth in 2025 as traders react knee-jerk to the massive sell-off in stocks.
Details
Job openings increased by 259K in November, exceeding expectations. Job openings rose in several sectors, while hires and separations remained relatively unchanged. Quits decreased, while layoffs and discharges remained stable. 1Y trend: “Down” (BLS)The ISM Services Business Activity Index rose to 58.2% in December (6-month of expansion), indicating continued expansion in the service sector. (ISM)The Logistics Manager’s Index fell to 57.3 to lowest in 4-month in December, driven by a decline in inventory levels. While upstream inventories rose, downstream retailers experienced a significant decline. Transportation prices increased sharply. 1Y trend: “Up” (LMI)
Crypto
The Governor of the Czech National Bank has proposed investing a small amount of central bank funds in BTC as a diversification strategy. While the proposal has been discussed, it has not yet been approved. (source)
World Markets
Euro Area inflation accelerated to 2.4% in December, driven by higher energy and service prices. Core inflation remained steady at 2.7%. 1Y trend: “Side”. The Euro Area unemployment rate remained unchanged at 6.30% in November. This is the lowest level on record, following a record high of 12.20% in January 2013. 1Y trend: “Down” (EUStat)The HCOB Eurozone Construction PMI edged up slightly in December, but remained in contraction territory for the 32nd consecutive month. New orders and employment declined sharply. Housebuilding was the weakest segment. Price pressures rose, and business confidence remained pessimistic. 1Y trend: “Side” (PMI)China’s foreign exchange reserves fell to $3.2T in December, the lowest in eight months, amid a stronger US dollar. Gold reserves increased slightly in volume but declined in value due to lower gold prices. 1Y trend: “Up” (CN)India’s economic growth is projected to slow to 6.4% in the 2024/25 fiscal year, down from 8.2% in the previous year. Weaker growth in investment, inventories, and manufacturing contributed to the slowdown. (IN)
On Wednesday, equities closed mixed, with the S&P and Dow up, while the Nasdaq declined, led by Meta, due to investors’ reactions to Trump’s potential economic emergency declaration related to tariffs. The Fed’s minutes indicated support for gradual interest rate reductions. The dollar index neared a 3-year high. EU economic sentiment reached its lowest level in 5 years, particularly in France, Germany, and Italy. Brazilian industrial growth at its 6-month low. All major cryptocurrencies were in the red, led by ADA, LINK, and AVAX, which decreased more than 6%. BTC attempted to stabilize above $94K, while ETH fell to $3.2K in a significant drop as traders continued to close positions to safeguard what remained of their Trump-rally profits.
Details
Private businesses added 122K jobs in December, the slowest pace in four months. Job growth slowed in the service sector, while manufacturing shed jobs. Annual pay growth for job-stayers slowed to 4.6%. 1Y trend: “Side”. (ADP)Initial jobless claims seasonally decreased to 201K in the week ending January 4, 2025, the lowest in eleven months. The 4-week moving average also declined. Outstanding unemployment claims rose slightly. 1Y trend: “Side”(DOL)
Crypto
The ETH Foundation sold 100 ETH recently. The foundation owns over $900M worth of ETH. The Foundation has sold 4,566 ETH ($13M) since June 2022. Rising ETH balances on exchanges signal increased selling pressure. The foundation’s continued sales have increased market uncertainty. (source)
World Markets
Consumer confidence in the Euro Area fell to -14.5 in December, reaching its lowest level since April. Consumers became more pessimistic about the general economic situation and major purchases. 1Y trend: “Side”. The Euro Area Economic Sentiment Indicator fell sharply to 93.7 in December, reaching its lowest level since November 2020. Confidence worsened across most sectors, with declines in France, Germany, and Italy. 1Y trend: “Down”. (EU)Industrial production in Brazil rose by 1.7% year-over-year in November, the slowest increase in six months. 1Y trend: “Side”.(BR)
Currencies
The dollar index rose to 3-year high, nearing 109.3, following report on Trump’s potential national economic emergency declaration. The dollar’s strength was bolstered by an ISM Services PMI report that showed increased activity and rising prices, along with higher-than-expected job openings, leading traders to anticipate only one rate cut by the Fed later this year. 1Y trend: “Up”.
On Thursday, the main stock markets are closed, but data is flowing in, indicating the least job cuts in five months, which reinforces bearish sentiment. Meanwhile, the dollar continues to rise, and the yuan is weakening further despite the CBC’s half-hearted efforts and reports that China’s inflation has hit a nine-month low. BTC and ETH have continued to decline.
Details
Employers announced 38,792 job cuts in December 2024, the least in five months. While lower than in November, 2024 saw the highest number of job cuts since 2020. The technology sector saw the most job cuts, while auto sector cuts increased. 1Y trend: “Down (Challenger)
Crypto
Grayscale Investments increased BTC and ETH’s weightings in its Digital Large Cap Fund to 90% during its Q4 2024 rebalancing. Cardano was added to the fund, replacing Avalanche, reflecting Cardano’s strong price performance. (source)
World Markets
Retail sales in the Euro Area increased 1.2% yoY in November. Retail Sales YoY in the Euro Area averaged 1.09% since 1996, reaching a high of 24.10% in April 2021 and a low of -19.60% in April 2020. 1Y trend: “Up” (EC)China’s annual inflation rate edged down to 0.1% in December, the lowest level since March. Food prices fell, while non-food prices rose slightly. Core consumer prices increased to 0.4%. Monthly CPI remained unchanged. 1Y trend: “Down”South African manufacturing production declined by 2.6% YoY in November. This marked the steepest contraction in six months, driven by lower production in various sectors. On a monthly basis, industrial output shrank by 1.1%. 1Y trend: “Down” (ZA)
On Friday, stocks fell sharply, prompted by a lower-than-expected unemployment rate (4.1% vs. 4.2%), which reinforced concerns about the Fed keeping interest rates higher for longer. This was compounded by inflationary expectations surging to an 8-month high. The S&P, Nasdaq, and Dow closed this week in deep red. The dollar continued to rise, pressuring other currencies such as the yen, which remains at a 6-month low against the dollar. Oil surged due to new sanctions. Spanish industrial production, which was uniquely growing among the largest EU economies, declined for the first time in 3 months. BTC and ETH attempted to rise against the current market sentiment, reaching 95K and 3.3K, respectively.
Details
The unemployment rate fell to 4.1% in December, below expectations. Employment increased by 478K, while the labor force participation rate remained unchanged. 1Y trend: “Up (BLS)The University of Michigan consumer sentiment index fell to 73.2 in January. Expectations for the future declined, while current conditions improved. Year-ahead inflation expectations surged to 3.3%, the highest in eight months. 1Y trend: “Up (Umich)
World Markets
Spanish industrial production fell by 0.4% YoY in November, marking the first decline in three months. Weaker output in capital and energy goods contributed to the decline. On a monthly basis, industrial output shrank by 0.8%. 1Y trend: “Up.(ES)Net foreign direct investment (FDI) in the Philippines surged by 50.2% YoY to USD 1.02B in October (largest since Feb). This increase was driven by higher debt instruments and equity capital, with investments primarily from Japan, the US, and Singapore. 1Y trend: “Down. (PH)
Currencies
The Japanese yen traded near 6-month lows. Uncertainty surrounding the timing of the Bank of Japan’s interest rate hikes. Household spending in Japan declined in November and ministerial bureaucrats said that they want to overcome “the public’s deflationary mindset’. 1Y trend: “Up, Depreciating.
Commodities
WTI crude oil futures jumped 4% to $77, reaching a 3-month high. This surge was driven by reports of new sanctions on Russian oil, targeting key firms, vessels, and insurers, which could disrupt oil exports to major buyers like India and China. 1Y trend: “Side”.
Week 3 is the beginning of the earnings season (Q4 banks reports). Also, traders will watch key inflation data (CPI and PPI). China will release Q4 GDP growth figures. Additionally, the ECB will publish minutes from its recent meeting and inflation figures.
Comment: What’s Up with The System
Individuals with technical or math-based education are likely familiar with Norbert Wiener’s principles of cybernetics, which assert that every system consists of an input, output, process, and a Reaction Feedback loop. Cybernetics lays the groundwork for computers and coding, and all contemporary autonomous systems (tech, code, economic, social etc) function based on these postulates, as firmly established as Einstein’s principles of relativity. One key postulate states that a system is destroyed when its Reaction Feedback is compromised, meaning it cannot respond effectively to changes in the external environment.
Currently, this failure is evident in our world’s governance systems, which rely either on rigid frameworks of “laws and regulations” or on a network of medieval “kingships,” where elected or self-appointed “dear leaders” dictate how the rest of us should live.
For the past three to four thousand years, this centralized governance model has been disastrous, costing hundred of millions of human lives due to the irrational whims of tyrannical rulers, who disguise their actions as “grand plans for development,” often culminating in widespread human extermination.
These “leaders” tend to blame such failures on “human nature” and the “laws of history”, a well-known fallacy, as no natural law dictates that one living being should exterminate another when resources like food and water have historically been abundant since the post-glacial “snowball Earth.”
In reality, these leaders and their families have monopolized the legitimate use of violence, wielding it against the rest of us to avoid engaging in the hard yet productive labor that occupies our daily lives.
However, technological advancements have gradually made the means of mass violence increasingly accessible to more people. This trend will inevitably lead to a monumental collapse of legal and leadership-based governance systems worldwide unless they transition to consensus algorithm-based direct democracy, where the Reaction Feedback loop can operate far more effectively.
This reality is clear to those in the productive class with a basic mathematical understanding, but they do not constitute 99.99% of the population. Thus, fundamental reforms may either be undertaken by the “dear leaders” themselves — effectively signing their own warrants, which is highly unlikely — or the systems will be forced to “reset” themselves, resulting in dramatic consequences for everyone on Earth. As engineers know, the clogged Reaction Feedback loop of our current governance mechanisms inevitably points toward a singular outcome: a sudden breakdown.
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SVET Markets Weekly Update (January 8–10, 2025) was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.