Market Review – January/February 2019 (Part 2)

Europe

  • The large sell-off seen in December was largely reversed as 2019 got off to a flying start with European equity markets rallying.
  • All areas of the market, apart from Communication Services, posted positive returns in January – with the best performing sectors being Real Estate, Consumer Discretionary, and Information Technology.
  • In the latest European Central Bank press conference, the bank maintained its
  • commitment to leave interest rates unchanged “at least through the summer of 2019, and in any case for as long as necessary” – we think that they will change their forward guidance in March to explicitly state that interest rates will not change until 2020.
  • Italy fell into a technical recession after the economy shrank by 0.2% in the fourth quarter of 2018, following a 0.1% decline in the third quarter. The recession appears to have been due to a combination of some temporary issues and other potentially longer lasting issues.

US

  • The US equity market posted its best month in three years in January and its best January since 1987.
  • The US Federal Reserve (Fed) said it would put further interest rate increases on hold.
  • There was optimism over US-China trade negotiations.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s