Highlights from February 2019

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

GDP Growth

U.S. Q4 2018 GDP estimated at 2.6%; 2018 GDP at 2.9%

UK Q4 2018 GDP estimated at 0.2% and 2018 GDP estimated at 1.4%; Business Investment continues to fall

Germany Q4 2018 GDP was 0%, narrowly avoids technical recession

Eurozone Q4 2018 GDP up by 0.2% and European Union Q4 2018 GDP up by 0.3%; 2018 annual GDP growth at 1.8% for the Eurozone and 1.9% for EU; Italy in Recession

European Commission (again) cuts GDP growth forecast for the European Union; Bank of England cuts UK GDP growth forecast; Germany forecast to grow slower than the UK despite Brexit

 

Economy

Is Household Debt in the U.S. really a bigger problem than before the financial crisis?

Here are Household Saving rates across the European Union

Government bond yields have been falling globally

The Baltic Dry Index is down 48% over the past month

Is the U.S. unemployment rate low due to increased hiring or an increasing number of people quitting the labour force?

Have banks in the U.S. started lending more money recently?

 

Trade

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

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