Monthly Comment February 2025

Macro at a Glance 

Germany’s Political Shift: On February 23, 2025, Germany held snap federal elections amid a two-year recession and a collapsed coalition government. Friedrich Merz’s CDU/CSU secured 28.5% of the vote, followed by a record 20.8% for the far-right AfD, reflecting widespread disillusionment. The SPD, under outgoing Chancellor Olaf Scholz, hit a post-WWII low of 16.4%. The new coalition faces the daunting task of reviving Germany’s struggling economy. (Sources : Der Spiegel, Bloomberg) 

China’s Tech Boom: Chinese tech stocks soared in early 2025, fueled by Deep Seek’s debut and growing recognition of China’s AI prowess. The “Terrific Ten” (Alibaba, JD.com, Meituan, Tencent, NetEase, Xiaomi, BYD, Geely, Baidu, SMIC) averaged 28% gains year-to-date, outpacing U.S. rivals like the “Magnificent Seven.” (Sources: Financial Times, Barron’s, Yahoo Finance) 

Trump’s Ukraine Diplomacy: President Trump intensified efforts to end the Ukraine war. On February 12, he tied U.S. aid to Zelensky opening talks with Moscow via videoconference. By February 19, he labeled Zelensky a “dictator” for not holding elections. A proposed ceasefire and $500 billion rare earths deal gained traction by February 25 but collapsed on February 28 after a heated Oval Office clash, with Trump accusing Zelensky of risking “World War III.” (Sources : BBC, Financial Times, RTS) 

One Sector, One Insight 

Basic Materials and Energy: Elliott Management took a 5% stake in BP (£3.8 billion) on February 13, urging a return to oil and gas roots and divestment from renewables. BP’s stock rose 10% post-announcement, despite lagging peers like Shell (+65.7%) and Total Energies (+50.6%) over five years. A group of 48 investors (2.5% of shares) demands a vote on climate goals. (Source : Financial 

Times) 

Consumption and General Public Services: Walmart’s Q4 2024 revenue rose 4.1% to $180.55 billion, beating estimates, but a cautious outlook amid inflation and tariff fears triggered a 6% stock drop. U.S. consumer confidence hit an eight-month low, signaling economic unease. (Source : Reuters) 

Financial Services: HSBC’s new CEO, Georges Elhedery, unveiled a restructuring on February 19, targeting $1.5 billion in annual savings by 2026 (cost: $1.8 billion). The bank will scale back investment banking in Europe and North America, following its East-West split in October 2024. (Sources : Financial Times, Barron’s) 

Healthcare: Citadel shorted GSK with a $384.5 million position (0.51% of shares) in February, doubting its £40 billion revenue goal by 2031 as dolutegravir’s patent nears expiration. GSK’s 11% stock rise and £2 billion buyback couldn’t offset pipeline and Zantac litigation concerns. (Sources : Financial Times, Bloomberg) 

Industrials: European defense stocks surged amid rising tensions and budgets. Rheinmetall (+37.5%), Thales (+24.3%), Dassault Aviation (+16.2%), BAE Systems (+4.2%), and Leonardo (+31.9%) thrived, driven by demand and doubts about U.S. military support. (Sources : Financial Times, Le Figaro) 

Technology and Network Equipment: Nvidia’s Q4 2025 results dazzled with $39.3 billion in revenue (+78%) and $22.1 billion in net income (+80%), led by $35.6 billion from data centers. Q1 2026 sales are forecast at $43 billion yet shares dipped 8.5% on trade and competition worries. (Sources : Reuters, Financial Times) 

Stock of the Month 

Super Micro Computer (SMCI): On February 25, SMCI avoided Nasdaq delisting by filing overdue reports. Its stock swung wildly, from $27.20 to a peak of $66.40 (+144%) on February 18, closing at $41.46 (+52%). (Source : Yahoo Finance) 

Key Performances (as of February 28, 2025) 

Index/Asset Value 

Monthly Change YTD 

S&P 500 

Dow Jones NASDAQ FTSE 100 CAC 40 

DAX 

SMI 20 

MSCI World VIX 

CHF/USD CHF/EUR Brent ($/bbl) Gold ($/oz) 

5,954.50 43,840.91 18,847.28 8,809.74 8,111.63 22,551.43 13,004.48 3,803.90 19.63 

1.1066 

1.0668 

73.03 

2,867.30 

-1.87% -2.25% -4.49% +3.23% 

+2.71% +5.23% +4.41% -1.21% 

+19.62% +0.46% +0.93% -5.03% +4.74% 

+1.24% +3.05% -2.40% +7.79% +9.90% 

+13.27% +12.10% +1.61% +13.14% +0.88% +0.39% -1.60% +10.02% 

February 2025

Market Outlook for March 2025 

March 2025 markets face a mix of volatility and opportunity amid geopolitical shifts and economic signals: 

Energy and Commodities: Brent crude’s 5% February drop (to $73.03/bbl) may stabilize as the EU adjusts to reduced Russian pipeline gas post-Ukraine transit halt. LNG reliance could pressure prices upward if supply tightens, while gold ($2,867.30/oz, +10% YTD) remains a safe haven amid uncertainty. 

Equities: U.S. indices (S&P 500 -1.87%, NASDAQ -4.49%) signal caution, with the March 12 CPI and March 25 FOMC meeting pivotal for rate expectations. European markets (DAX +5.23%, CAC 40 +2.71%) may outperform if defense spending and German coalition talks boost confidence. China’s tech rally could persist if AI momentum holds. 

Geopolitical Risks: Trump’s stalled Ukraine deal and Germany’s fragile government formation heighten volatility. The VIX (+19.62% in February) suggests hedging will rise. A Ukraine ceasefire could ease energy pressures, but escalation risks linger. 

Sector Focus: Defense (e.g., Rheinmetall) and AI tech (e.g., Nvidia) are poised for gains, while energy firms like BP face strategic pivots. Consumer stocks (e.g., Walmart) may lag if U.S. sentiment weakens further, per FedEx’s March 20 earnings. 

Overall: Expect choppy trading with a slight upward bias if U.S. inflation cools and Europe stabilizes. Watch for sudden swings tied to Ukraine or Fed signals.