The S&P 500 rose 2.97% percent February following a 7.87% gain in January setting the start of 2019 its best start to a year since 1991.
The markets plummeted in December mainly due fears of slowing economic growth, worries about rising interest rates and global trade issues. What has changed since December?
For starters, corporate earnings for the fourth quarter grew by 13.08% according to FactSet data which shows the U.S. economy is doing relatively well.
Fourth quarter GDP growth numbers are in – the U.S. grew 2.9% in 2018 and fourth quarter growth was 2.6%.
Europe is slowing though. UK Q4 GDP growth was 0.2%, Eurozone Q4 GDP growth was 0.2% and Germany grew just 0% but avoided a recession. Italy entered a recession.
The Federal Reserve said it would be “patient” in raising rates and bond yields seem to signal slowing interest rate rises or possibly even interest rates heading downwards.
Trade worries remain but China and the U.S. appear to be nearing a trade deal
Due to a medical emergency during February we didn’t write much during the month, here are our posts from the month
European Union and Eurozone trade statistics for 2018 – EU swings to a trade deficit; EU – record trade surplus with the U.S. and record trade deficit with Russia; UK had largest intra-EU trade deficit