World Market Insights – Week 21, 2025: From FOMO to Profit-Taking – Is This Just a Breather, or a Reality Check?
May 25, 2025•3 min read
Pour yourself a strong coffee (and perhaps something more substantial if last week’s sugar rush left you feeling peckish). After last week’s “Fear to FOMO” rally, markets reminded us that the only constant is change.
The exuberance of Week 20 gave way to a more measured tone in Week 21: risk assets lost momentum, volatility crept back in, and headlines brought fiscal, inflationary, and geopolitical risks back to the fore. As always, I’ll reflect on what changed, what didn’t, and what it means for private equity and risk assets.
This Sunday, I’ll also take an educational moment, to go with a longer brunch perhaps, to revisit gold’s role as a portfolio hedge; timely, as the world continues to search for stability.
So, what happened as the dust settled? Let’s dig in.
Recap: Last Week’s Spring Unfurling
We left off with markets in full bloom, coil unwinding and FOMO in full flush:
Ed’s World Market Insights (Week 20) – Private Equity Perspectives
- US–China Tariff Truce: A 90-day ceasefire, tariffs slashed, and the world’s supply chains collectively exhaled.
- Inflation Surprise: US CPI softer than expected, Bank of England cutting rates again, and the Fed still playing the “wait and see” game.
- Tech and Small Caps on Fire: Nasdaq up 7.2%, S&P 500 up 5.3%, FTSE 100 joining the rally, and gold taking a back seat as risk appetite returned.
- Sentiment Shift: The CNN Fear & Greed Index leapt from “Fear” to “Greed”—investors chasing returns like it was Black Friday at the Apple Store.
Weekly Market Table
Week 21: From FOMO to Profit-Taking, Rebalancing, an a Dose of Reality?
This week, the market’s mood swung from “can’t miss out” to “maybe not as shiny as I thought.”
Was it just healthy profit-taking after a wild run, or is something more brewing beneath the surface?
Let’s see…
- US Market Pullback: The S&P 500 dropped 2.6%, Nasdaq down 3.1%, and Dow off 2.2%. Tech stocks, last week’s heroes, were first to the exits as valuations looked stretched and nerves got the better of traders.
- Credit Downgrade Drama: Moody’s cut the US sovereign rating; a not-so-subtle reminder that you can’t run up the credit card forever without consequences. Bond yields spiked, and the cost of capital crept back into every investor’s spreadsheet.
- Sticky UK Inflation: April CPI in the UK came in hotter than hoped, making the Bank of England’s dovish stance look a bit premature; questions over future rate cuts started covering the ether.
- Asia’s Divergence: China’s PBoC cut rates, giving Asian equities a boost, while Japan and Korea continued to wrestle with trade headwinds.
- Macro Data & Geopolitics: US PMI, Eurozone inflation, UK retail sales; all a bit mixed. Meanwhile, global headlines kept everyone on their toes.
So, was this just a technical breather?
Partly… mainly…. well after a 5–7% weekly surge, some digestion is natural. But add in the credit downgrade, sticky inflation, and a reminder that summer volatility is never far away, and you’ve got a market that’s pausing to check the map before the next sprint.
What’s Pertinent This Week?
- Bond Market in Focus: The US credit downgrade and a spike in Treasury yields put debt sustainability and the cost of capital back in the spotlight. Suddenly, those “higher for longer” warnings don’t sound so theoretical.
- Asia’s Divergence: China’s rate cut buoyed Asian equities; Japan and Korea are still navigating trade crosswinds.
- Macro Data: US PMI, home sales, Eurozone inflation, and UK retail sales all added to the choppiness. Investors are parsing every data point like a detective at a crime scene.
It looks like the next week will be a week of further reflection in the markets, and the hue from week 20 became a little more lacklustre.
💡 Join me tomorrow for Part 2, where I’ll explore gold’s role as a timeless hedge — and why it’s capturing attention right now.
#privateequity#insights#beaufortprivateequity#markets#fomo#profittaking
– Practicing Chartered Accountant; experienced (25+ years) finance professional for regulated financial services organisations – Director and co-owner of Gibraltar FSC regulated Company & Trust Management Company – Strong financial modelling and financial planning and analysis for FTSE listed financial conglomerate – Treasurer (£1BN of AUM and £250M of regulatory capital) for regulated financial services organisation – Board experienced (both Group and subsidiary) along with leadership chairing committees – Experienced at running large multi located departments and teams – Corporate Finance experience in both technology, private equity and banking M&A – International audit experience UK GAAP, US GAAP, IFRS and Gibraltar GAAP – Strong managerial finance, financial accounting and financial internal control including Sarbanes Oxley audits – ERP implementation experience in Oracle and NetSuite and online accounting systems – Big 4 ACA qualification with treasury, finance, corporate finance and consultancy experience – Cambridge university education
