Weekly Market Review - 19-05-2025
- Anthony Walters
- May 19
- 3 min read
Welcome to the 19 May edition of Clever's Weekly Market Review, your concise briefing on the latest market movements, economic developments, and ESG initiatives shaping the global financial landscape. This week, markets rallied amid shifting central bank signals, Moody’s downgraded the US credit rating, and New York unveiled a $1 billion climate plan. We also highlight trade tensions heating up and notable shifts in commodity prices, reflecting evolving economic and geopolitical dynamics.
Market Recap.
Markets continued to rally, in the same order as last week. The Nasdaq 100 ETF gained 2.56%, with the S&P 500 ETF adding 1.61%. In the UK, the FTSE 100 ETF gained 1.12% whilst the Dow Jones Industrial Average ETF fell by -0.11%.
News.
The US has lost its last perfect credit rating, as influential ratings firm Moody's expressed concern over the government's ability to pay back its debt.
In lowering the US rating from 'AAA' to 'Aa1', Moody's noted that successive US administrations had failed to reverse ballooning deficits and interest costs. The downgrade "reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns," Moody's said in the statement.
Inflation.
U.S. consumer prices rebounded moderately in April as declining food costs partially offset rising rents, leading to the smallest annual increase in four years, but the inflation outlook remains unclear against the backdrop of tariffs. In the 12 months through April, the CPI climbed 2.3%. That was the smallest gain since February 2021 and followed a 2.4% advance in March.
Central Banks.
The European Central Bank may need to cut interest rates to "slightly below" 2% as global trade tensions pose downside risks to inflation and growth, Belgium's central bank governor, Pierre Wunsch, told the Financial Times in an interview published on Saturday.
Wunsch, previously known for his hawkish stance, told the FT that recent shocks and uncertainty could justify a mildly supportive monetary policy, including a potential cut below the current 2.25% deposit rate.
Markets now see a roughly 90% chance of an ECB rate cut on June 5, but have priced in only one additional easing over the rest of the year, suggesting that the ECB's deposit rate could bottom out at 1.75%.
Commodities.
Wheat gained 5.16% as favourable weather and timely rains in Kansas, the top US wheat-growing state, boosted expectations for the best yields in four years.
Natural gas fell by 8.32%, the lowest since April 25, driven by weaker short-term demand and a drop in LNG exports. Warmer-than-normal weather through late May is expected to curb heating demand, while mild temperatures also limit air conditioning use, reducing overall consumption.
ESG.
New York Governor Kathy Hochul, has unveiled New York's largest climate initiative, allocating $1 billion to the Sustainable Future Program. This historic budget aims to decarbonise the economy, reduce emissions, and create green jobs. Key investments include $450+ million for clean heating and energy retrofits, $250+ million for electric school buses and EV charging stations, and $200 million for renewable energy projects at public institutions.
Geopolitics.
Despite progress in some talks, tensions remain. The US has warned it will impose the maximum tariffs previously announced against any country not negotiating in good faith. Treasury Secretary Scott Bessent confirmed that countries would soon receive letters outlining these rates, reverting to the hardline stance originally set out by President Trump on 2 April.
Week Ahead.
US: Trade negotiations will dominate headlines after President Trump’s plan to send letters warning trading partners of impending tariffs. Markets will also watch corporate commentary for clues on supply chain disruptions.
Europe: Focus shifts to April CPI and retail sales data. Headline inflation is forecast to rise to 3.3%, testing the BoE’s resolve after last week’s rate cut.
Sources.
Anthony Walters - Head of ESG at Clever Adviser Technology Ltd (Clever)
Market recap Data sourced from FE FundInfo & Koyfin. ETFs quoted: iShares Core FTSE 100 UCITS ETF, iShares Core S&P 500 UCITS ETF, iShares Nasdaq 100 UCITS ETF (quoted in Pounds Sterling).
News US loses last perfect credit rating amid rising debt, By BBC News, 16/05/2025
Inflation Lower food prices tame US consumer inflation in April, tariffs squeeze awaited, by Lucia Mutikani, Reuters, 13/05/2025
Central Banks ECB's Wunsch says central bank may need to cut rates below 2%, FT reports, Reuters/Yahoo Finance, 19/05/2025
ESG New York Launches $1 Billion Climate Plan in FY26 Budget to Cut Emissions, Create Green Jobs, by ESG News, 12/05/25
Geopolitics Nathan Sweeney, Marlborough Group, 18/05/2025
Commodities Data from Koyfin, qualitative data from Trading Economics
Week ahead Nathan Sweeney, Marlborough Group, 18/05/2025
