Take Two: Investors continue to pour into US stocks; Eurozone business activity expands further
- 31 March 2025 (3 min read)
What do you need to know?
Retail investors appear to be using US volatility as a buying opportunity. According to a Financial Times report, citing VandaTrack data, individual investors have put $67bn into US stocks and exchange traded funds so far in 2025, versus $71bn in the fourth quarter (Q4) of 2024. At the same time, institutional investors are cutting their exposure chiefly due to concerns over President Donald Trump’s policies. Year to date, the S&P 500 has fallen by 3%, while in contrast the Euro Stoxx 600 is up 13%1 . Elsewhere, US corporate profits rose to a record high in Q4 while US Q4 GDP growth was revised up to 2.4% from 2.3%, compared to Q3’s 3.1%.
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Around the world
Eurozone business activity expanded for the third consecutive month in March, according to survey evidence, as manufacturing output increased for the first time in two years. The bloc’s services activity shrank, although it remained above the 50 mark indicating expansion, according to the flash Purchasing Managers’ Index (PMI). The composite reading, including both manufacturing and services data, edged up marginally to a seven-month high of 50.4 from 50.2 in February. In contrast, Japan’s composite PMI fell to 48.5 from 52.0, reflecting a contraction in services and the fastest decline in manufacturing output in a year.
Figure in focus: 2.2%
Global energy demand rose by 2.2% last year, almost twice the 1.3% average annual increase seen over the previous decade, according to a new report from the International Energy Agency. Growth was driven by increased electricity consumption due to record global temperatures - which boosted demand for cooling in many countries - as well as higher usage from industry, electric vehicles, data centres and artificial intelligence. Some 80% of the increase in global electricity generation came from renewable sources and nuclear power, while new renewable energy capacity installed worldwide rose to a record level for the 22nd consecutive year.
Words of wisdom
China Development Forum: China’s annual forum to engage with the rest of the world, which brings together global organisations, business leaders and government representatives. Held in Beijing in March, this year’s conference - under the theme of “Unleashing Development Momentum for Stable Growth of the Global Economy” - addressed key topics including macroeconomic policies and economic growth. Participants discussed strategies to boost China’s domestic consumption by tackling structural challenges and increasing household income. Additionally, Chinese Premier Li Qiang assured foreign business leaders that Beijing would continue to expand market access and facilitate the deeper integration of overseas enterprises into the Chinese market.
What's coming up?
The Eurozone releases flash inflation data on Tuesday, while manufacturing PMIs are reported for Japan, the US, the UK, Eurozone and China. The same day, the Reserve Bank of Australia meets to decide on interest rates – at its last meeting policymakers lowered rates by 25 basis points, bringing borrowing costs to 4.1%. Services and composite PMIs are issued on Thursday, for Japan, China, the Eurozone, US and UK. The US reports employment data on Friday.
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