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In today’s edition,
- Klarna’s IPO
- Perplexity’s valuation leap
- Swiss watches slow down
- Fed faces a tightrope
- Institutions bet on crypto
Market Snapshot
Markets ended the week in positive territory, with the Dow Jones rising 1.27% to 41,985.35, the S&P 500 up 0.57% to 5,667.56, and the Nasdaq gaining 0.35% to 17,784.05.
The Fed held rates steady at 4.25%–4.5% and maintained its forecast for two cuts in 2025. However, it revised inflation higher and GDP lower, citing increased uncertainty. Still, markets welcomed Powell’s view that tariff-related inflation may be transitory.
Economic data was mixed. Retail sales rose just 0.2%, missing expectations, while January was revised down sharply. However, core control group sales rose 1%, pointing to some underlying strength. On the bright side, housing data improved, with existing home sales up 4.2% and housing starts rising 11.2% month-over-month.
Stock market closing data for the week of Mar 17th to Mar 21st, 2025
News Summaries
Klarna’s US IPO filing targets over $1 billion in proceeds at a valuation above $15 billion—more than double its 2022 low but far from the $45.6 billion peak during the fintech boom. In 2024, it swung to a $21 million profit on $2.81 billion in revenue, a stark shift from its $244 million loss the year before. The turnaround follows Klarna’s cleanup act—selling its Checkout unit, acquiring Laybuy assets, and doubling down on payment partnerships with Apple, Google, and JPMorgan to lock in relevance. With 93 million users and 675,000 merchants, Klarna is banking on scale and stability. Yet, lingering issues like internal control weaknesses and a Swedish regulatory probe could keep investor enthusiasm measured. Still, turning profitable ahead of an IPO sends a message: Klarna is done chasing hype and ready to be judged on earnings, not just potential.
AI search startup Perplexity is in early talks to raise $500 million to $1 billion. This comes with a potential valuation of $18 billion, up from $3 billion just months ago. The increase shows strong investor interest in generative AI. Founded in 2022, Perplexity has grown quickly. It reached nearly $100 million in annual recurring revenue and 15 million active users by March. The company is also expanding into tools for enterprise document search and financial data lookup. Backed by SoftBank’s Vision Fund 2, Nvidia, and Jeff Bezos, Perplexity faces tough competition from Google and OpenAI, which have launched competing AI search tools. The rapid valuation increases show confidence. However, maintaining this momentum will depend on how well Perplexity can create unique value in a crowded AI search market. If it sticks to its product roadmap and keeps growing its user base, this next phase could be about proving its long-term viability rather than just hype.
Swiss watch exports fell 8.2% in February to 1.98 billion francs ($2.26 billion), reversing January’s growth. This decline brings the year-to-date drop to 2.4% as demand cools in key markets. Exports to China dropped by 25%, continuing a slump due to economic worries. U.S. exports, which were expected to offset the dip in China, fell by 6.7%. Analysts cite one-off Q4 factors and trade friction as reasons for this decline. Only lower-end watches priced below 200 francs posted growth. Mid-to-premium segments saw broad declines, despite being resilient before. Long-term optimism still focuses on the high-end category, which usually performs better in luxury cycles. However, with macro and trade headwinds affecting the market, even well-established segments like Swiss watches may need to reset expectations before the next upswing.
The Fed’s latest projections show a change in expectations: slower growth, higher inflation, and more joblessness than expected just three months ago. This shift stems from the inflation caused by new tariffs and weaker business sentiment. Policymakers now see two rate cuts in 2025, but the outlook is clouded by mild stagflation—rising prices without strong economic growth. Chair Jerome Powell noted that tariff-driven inflation might be temporary. Still, the Fed won’t rush to change its approach. They want to avoid repeating their 2021 mistake on inflation persistence. Officials are cautious, considering past errors and waiting for clearer data before acting, even if it means facing short-term weakness. The Fed seems focused on keeping inflation expectations stable rather than boosting growth too quickly. For investors and consumers, this means a holding pattern—rate relief may come, but patience will be needed.
From the World of Crypto
More than 75% of institutional investors are planning to increase their crypto exposure in 2025, according to a January survey by Coinbase and EY-Parthenon. Over half of them—about 59%—say they’ll put more than 5% of their total assets under management into digital assets or related products.
The timing of the survey matters too: it was done just as Bitcoin was breaking through the $100,000 mark, hitting a high of $108,000. Naturally, rising prices tend to bring rising interest.
One big reason behind this shift?
Regulatory clarity. Around 60% of the investors surveyed said they prefer getting crypto exposure through registered vehicles like ETFs. With BlackRock’s spot Bitcoin ETF pulling in billions, traditional investors are clearly warming up to crypto—just in a more familiar, regulated format. Also worth noting: 74% of the institutions already hold altcoins beyond Bitcoin and Ether, showing that this isn’t just a Bitcoin-only play anymore.
That said, a lot has changed since the survey.
Bitcoin’s price has dipped below $80,000, and volatility is creeping back in. But EY’s Paul Brody believes that if interest rates come down, we could see even more momentum—especially in DeFi. Institutions may start using crypto more actively, adding it to liquidity pools or borrowing against assets to squeeze out extra yield.
The takeaway?
Institutional interest in crypto is getting more serious—and more structured. This year might be less about hype and more about building real, long-term strategies in the space. If the macro setup cooperates, crypto could finally start acting like a mainstream asset class, not just a speculative trade.
Community Insights: What Investors Are Discussing
The Vested Community is actively discussing key investment trends, including big tech. Here’s what members are focusing on:
Portfolio Strategies & Market Trends
Investor Ansh_Orbit_448 shared thoughts on diversification, highlighting ETFs like LIT (Lithium Battery & Tech ETF) and CQQQ (focused on top Chinese tech stocks). He cautioned about U.S.-China relations and advised a balanced approach to investing in international markets.
Gold as a Safe Haven
Investor Aryan highlighted gold-backed ETFs as a way to hedge against market uncertainty:
- SPDR Gold Shares (GLD): The largest and most liquid gold ETF, tracking physical gold.
- iShares Gold Trust (IAU): A cost-effective option for gold exposure, backed by physical bullion.
Have an opinion on these investment plays? Drop a comment and let the community know!
