Summary for the 15th of February 2019


Yesterday the stock markets in Europe started the day in positive, but once the US stock exchanges opened, the market sentiments started to decline. All three major US exchanges opened yesterday with a decline. The US retail sales for December 2018 showed a decline of 1.2% from November, the market was expecting a small increase. Excluding the volatile components (automobiles, gasoline, building materials and food services), the retails declined by 1.7% in December. Quarter to quarter, the growth was 0.5% for the fourth quarter. On average, the quarterly growth has been just above 1% for the past years. The numbers show that the consumer spending has been weak at the end of 2018.

How strong the macroeconomic indicators affecting the stock market varies from day to day, but lately, the surprises, both positive and negative, have been giving highly volatile effect in the financial market. This shows that there is uncertainty among the investors regarding the global economic growth. The fear in December 2018 was certainly exaggerated, but we haven’t received enough confirmations that the global economy is still growing. This is especially clear in the Eurozone, where the slowdown in growth is due to temporarily factors, but the investors are still not certain if that is the case. The market sentiments have been improving from 2018, but this might be due to positive signals from the central banks. In other words, the investors need more assurance that the global economy is still growing, especially from the Eurozone and the US.

In London, the British prime minister, Theresa May is working on changing the Brexit deal with the EU, and get the changes approved by the British Parliament on the 27th of February. May still hasn’t been able to unite her own political party around and agree on what they wish to change in the Brexit deal. The MPs have voted down her EU strategy yesterday by 303 vs 258, a majority of 45 against the strategy.

Indices on the 15th of February: Due to weak retail sales in the US, the US stock exchanges ended in red. Weaker than expected inflation rate from China has contributed to the Asian stock markets ended in red.
Dow: -0.4% (14th of February )
S&P 500: -0.3% (14th of February)
Nasdaq: +0.1% (14th of February)
Nikkei: -1.2%  (15th of February)
Chinese indices: -1.9% (15th of February)
STOXX Europe 600 Index: +1.41% (15th of February)

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Next update will be on Monday the 18th of February

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