Summary for the 21st of February 2019


FOMC Minutes from the 29th-30th of January meeting shows that many of the FOMC members agreed about holding off the rate hikes, how long this would last was not certain. Many of the members argued that rate hikes might prove necessary only if inflation outcomes were higher than expected. This was in line with what Jerome Powell said at the press conference after the January meeting. The Minutes also shows that many of the members indicated that , if the economy evolved as they expected, they would view it as appropriate to raise the target rate later this year. Further, the Minutes points at uncertainty about slowing global economic growth, including China and Europe.

There has been uncertainty about the reduction of the size of the Fed’s balance sheet, the process that started in October 2017. The Minutes has reduced this uncertainty by showing that almost all the members wanted a plan to stop the reduction later this year.

Yesterday’s meeting between the British prime minister and the president of the European Commission, Jean-Claude Juncker didn’t show any new progression about Brexit. The EU is now supposedly to be more open about the discussion of the backstop solution, and changes of the solution might be settled soon. On next Wednesday, the British Parliament will be voting on a new Brexit deal. If the EU is willing to change the backstop solution with Ireland, the probability of Brexit supporters in the Parliament to agree on the Brexit deal will be higher.

3 conservative members of the parliament (MPs) have resigned from their party and joined the Independent Group together with the 8(formerly 7) MPs from Labour party who resigned from their party earlier this week.

The trade talks between the US and Chinas continues. There was news about how the two parties were discussing some central issues for an agreement. Some of the issues were intellectual property rights and cybertheft.

Indices on the 21st of February: The US stock market was unchanged yesterday. Stronger than expected released economic indicators in China have made the Chinese indices ended in a gain.
Dow: +0.2% (20th of February )
S&P 500: +0.2% (20th of February)
Nasdaq: +0.1% (20th of February)
Nikkei: +0.2%  (21st of February)
Chinese indices: +1.6% (21st of February)
STOXX Europe 600 Index: -0.28% (21st of February)

This post is sponsored by my video course in Portfolio Analysis, check it out if you are interested:
Quick and Easy Portfolio Analysis Video Course  (Skillshare)
Quick and Easy Portfolio AnalysisVideo Course  (Udemy)
and Facebook page for other information:
Quick&Easy Finance


Comments

Post a Comment

Popular posts from this blog

Summary for the 2nd of October -Weaker manufacturing outlook

Last week’s flash PMI estimates for the EU area and yesterday’ final PMI numbers are indicating that the weakening in the manufacturing sector isn’t country specific, but rather the weakening is across countries. The decline in Germany’s manufacturing sector is less than expected by the financial markets, while the decline in France is higher than expected. The same goes for Spain and Italy. The UK’s PMI index has increased by 0.9 to 48.3 and is more than expected, though 48.3 still indicates a weaker outlook. The US Manufacturing PMI has increased to 51.1 while the ISM index declines by 1.3 percent to 47.8, the lowest value since 2009. Despite weakening activities in the manufacturing sector for the developed countries, for the developing countries the outlook is still positive. The global PMI value in the manufacturing sector has risen from August to September. Past months’ decline has been due to weaker growth in the global trade. The WTO has updated its global trade forecast
Read more

Summary for the 15th of October

China’s balance of trade shows a fall in exports by 3.2 percent, comparing to a year ago and the imports fall by 8.5 percent, the first fall since May this year. China is the largest contributor to world economic growth, through the weaker imports, China’s economic decline is affecting the rest of the world economy, such as the Euro area. The Euro area’s industrial production for  August has risen by a little more than the markets have expected. The industrial production in the Euro area has been weakening since the start of 2018. Finland is currently holding the council of the EU presidency. At a press conference with the European Council President elect, Charles Michel, the Finnish prime minister, Antti Rinne, says that The EU needs more time to reach a Brexit agreement. Boris Johnson is hoping to seal a Brexit deal before the EU summit on Thursday, so that he will be able to present it to the British Parliament on Saturday for approval, in doing so, he won’t need to postpone B
Read more

Summary for the 21st of October Brexit drama

On Saturday, the British parliament is withholding the final decision of the revised Brexit deal and forcing Boris Johnson to ask the European Council for an extension to the 31 st of January. Instead the parliament has greed on Oliver Letwin’ amendment, which states that there wont be a no deal Brexit until the parliament has agreed on the revised Brexit deal this week. And on Saturday night, Boris Johnson has sent an unsigned letter to the European Council asking for a Brexit delay as well as a personal letter to the Council asking the EU leaders not to delay Brexit. The US stock exchange has closed in negative on Friday after Johnson & Johnson has to recall 33 000 bottles of baby powder in the US after health regulators found trace amounts of asbestos in a bottle purchased online. Boeing has admitted that two of its employers in 2016 misled the FAA about the 737 Max and its technical system. Weaker than expected Chinese economic indicators also contributes to the negative
Read more