- 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.
- 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.