Weekly market recap

Your weekly global financial market newsletter

  • Popularity for electric cars has been on the decline lately, and the electric mania seems to be fading. But this is not a recent news story. Electric car sales may be breaking one record after another from 2020 onwards, but market saturation and strong competition from manufacturers in China is already slowly starting to take its toll on EV sellers. While analysts at the turn of the year were still predicting another year of growth, the reality is somewhat different.
  • Consumers are increasingly starting to have problems with reliability and cost of operation. In Germany, for example, sales of EVs fell by 14% after subsidies for EVs were removed. Ford's EV sales fell 11% after one model had major battery issue and another became ineligible for a $7,500 tax break. So last year's record of 1.2 million EVs sold may be a highlight for some experts for some time.
  • One of the signs of the beginning of the slow decline of this sector may be the downgrade of the investment recommendation on Tesla, the industry leader, by Wells Fargo with a further negative outlook. The bank believes Tesla's valuation is too high and doesn't make much sense in the current situation. After a series of declines, Tesla is becoming the worst performing stock in the S&P 500 since the beginning of 2024. Tesla's share price has already lost over 30% this year and has already written down over 57% from its all-time high in November 2021. However, the current price may be interesting for some investors as it is entering oversold territory from a technical perspective.


US stocks lost ground for the second week in a row after investors were surprised by inflation data. Headline CPI rose as expected, but core prices rose above expectations. The bigger contraction was then caused by Thursday’s producer prices, which rose roughly double consensus estimates and the most in six months. On a YoY basis, producer prices rose at the fastest pace since September last year. Investor speculation about the early Fed interest rate cuts thus took hold. Energy stocks were the best performers thanks to the strengthening of oil prices, while technology titles did not fare as well.

The Fed’s postponement of the rate cut may also affect other central banks, including the ECB, but investors’ fears in Europe have finally been allayed by good corporate results and European stocks have been rising for eight weeks in a row. Pan-European STOXX Europe 600 Index added 0.31%, France’s CAC 40 Index rose 1.70%, Germany’s DAX added 0.69% and the UK’s FTSE 100 Index put on 0.94%.



Oil gained almost 4% last week thanks to a combination of several factors. In addition to the surprising drop in US crude inventories, a more optimistic outlook for global oil consumption contributed to the price rise, as the EIA revised upwards its estimate of global oil demand in 2024 and adjusted its projection for this year to a slight deficit instead of a surplus. However, Ukraine’s attacks on Russian refineries (according to analysts, strikes could add $2-$3 per barrel of risk premium last week), ongoing tensions in the Middle East and, not least, the decision by OPEC+ countries to extend supply restrictions are also behind the price rise.

The US natural gas price, on the other hand, lost over 7% on the week due to forecasts of mild weather, which will lead to lower demand for heating gas. This should change earlier this week, but inventories are still 37.1% higher than the average for this time of year, according to the latest EIA data.



The US dollar benefited from unexpected US inflation data and posted a weekly gain for the first time after three weeks of declines. Investors will be anxiously awaiting the outcome of the Fed meeting in the new week, where, in addition to the interest rate decision, they may learn more about the subsequent direction of Fed monetary policy in the coming months. However, bets on a rate cut as early as June have fallen from 74% a week ago to the current 60%.

As rates will also be decided in Japan and England, currencies such as the JPY and GBP are also under speculation pressure. In Japan the BoJ is expected to abandon its extremely easy monetary policy for the first time in a long period and raise rates from negative to at least zero. This is also supported by the news of rapid wage growth, however, markets have already priced in the rate hikes in recent weeks, so the JPY eventually weakened last week. Another factor preventing the JPY from strengthening further may be investors fear of the slow pace of monetary policy tightening.



Although the past week was relatively poor in macro data, the surprisingly high inflation figures in the US resonated all the more. Tuesday’s CPI data from February was a surprise, especially for the core numbers (less food and energy), which rose above expectations, driven mainly by the rise in housing costs.

An even bigger surprise was the producer inflation numbers, which rose at twice the expected pace in February. On a year-on-year basis, producer prices rose by 1.6%, the fastest pace since September. Hopes for the impact of low producer prices on consumer prices are thus fading fast. The strong inflation data was then tempered by lower-than-expected growth in retail sales, which may signal growing consumer caution.

The UK economy is slowly recovering from recession, at least according to January’s GDP figures, which rose by 0.2%. However, over the past three months the UK economy has contracted by 0.1%. The surprise then was the rise in the unemployment rate, which rose from 3.8% to 3.9% in January. According to the BoE chief, the UK is near or at full employment, which is quite unusual with minimal inflation.

What to watch out for this week

  • The most anticipated event of the new week will certainly be Wednesday's Fed meeting, where, in addition to the interest rate decision, we will also see economic forecasts and long-term interest rate forecasts, the so-called dot plot. Expectations of an early rate cut may have subsided after last week's inflation, but the June date is still not out of the question.
  • Also of interest will be the March PMI data, which may indicate a slowdown in manufacturing sector growth after February's strong expansion. The services sector is expected to slow further. The number of housing starts will likely rebound from January's five-month low, existing home sales, on the other hand, are expected to decline.
  • The Bank of England is also expected to leave interest rates on hold at 5.25% on Thursday, with a cut not expected until August this year. Before that, we'll get data on the inflation rate, which is expected to rise by 0.7% in February, but on an annual basis it should slow from 4.0% to 3.5%, the lowest since September last year. The PMI is expected to improve slightly, similar to Germany and the Eurozone as a whole.
  • Japan's central bank is expected to end its negative interest rate policy for the first time since 2015 after large firms agreed with employee representatives to the most significant wage increase in 33 years. With markets already taking the end of negative rates as a done deal, more hints are expected regarding the pace of interest rate hikes by the BoJ in the future.
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