Summary for the 22nd of February 2019


The EU Area Composite PMI increased in February from previous month after it has been on a downward trend through 2018, though the PMI index for the manufacturing sector fell for the first time since 2013, to the value of under 50. The PMI index for the services sector increased by 1.1 to the value of 52.2.

For the manufacturing sector, the fall was strongest in Germany, which fell by 2 points, but the services sector in Germany also increased by as much. The French manufacturing sector was unchanged.

Even though the EU Area Composite PMI rose in February, it is still early to tell if the downward trend for the economic activity in the EU is over.

The US president, Donald Trump, is meeting with Vice Premier of China, Liu He, today for trade talk. From the survey conducted by Bloomberg, none of the 29 China-watching analysts believes that the US will increase tariffs on Chinese goods on 1st of March. 18 of the 29 analysts believe the tariff will increase ultimately.

The ECB Monetary Policy Meeting Accounts from the meeting held in Frankfurt on 23rd-24th of January shows that there were concerns among the ECB members about increasing impact of the trade conflicts on the global outlook over time. The ECB had adjusted the risks assessment from balanced to a downside. The chief economist of the European central bank, Peter Praet, was signaling that, the ECB would be considering another round of TLTRO at the next ECB meeting on the 7th of March. The Accounts also perceived the risks surrounding the Brexit as acute.

The US durable goods orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dropped 0.7 percent in December. New orders for US manufactured durable goods excluding transportation increased by 0.1% in December from November. The Philadelphia Fed Manufacturing Index declined to -4.1 in February from the value of 17 in January. The existing home sales fell by -1.2% in January, but the -6.4% in December got revised up to -4%, giving the total of December and January a better number than expected. The only positive number is the initial jobless claims that declined to 216 000, after it has been around 240 000 for three weeks.

Indices on the 22nd of February: Weaker than expected economics indicators from Asia, Europe and the US and together with no news from the trade talks have led to the stock markets closed in negative.
Dow: -0.4% (21st of February )
S&P 500: -0.4% (21st of February)
Nasdaq: -0.4% (21st of February)
Nikkei: -0.2%  (22nd of February)
Chinese indices: +1.4% (22nd  of February)
STOXX Europe 600 Index: +0.22% (22nd of February)

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