Gerald Fitzgerald’s Market Review December 17th

LAST WEEK IN 30 SECONDS...

Political risk once again dominated headlines within markets last week. In the UK, Theresa May survived a leadership challenge following ongoing unrest surrounding the Brexit withdrawal treaty document. Meanwhile the ongoing fallout between China and the US over the arrest of Huawei’s Chief Financial Officer saw some easing with the CFO’s release on bail. Global equities finished the week -0.37%.

Within the Eurozone, market confidence improved with signs the Italian coalition would be open to concessions on certain aspects of the country’s budget proposal. Yields on 10-year Italian bonds fell 0.18% as a result.

THIS WEEK IN 30 SECONDS...

The US Federal Reserve takes centre stage this week with the widely anticipated final interest rate rise of 2018 due to be announced on Wednesday. Whilst the likelihood is that the US Fed will continue with this rate rise, there is growing uncertainty as to the path of rate movements for 2019 – markets will look carefully at commentary from the US Fed for guidance.

Elsewhere, a consumer confidence release is due for the Eurozone with inflation metrics due for release in the US, Japan and the UK.

S&P 500 RETURNS – JANUARY DECEMBER BLUES

Within the US S&P 500 stock market, December has never been the worst performing month in any calendar year. With only a number of days left to year-end, December’s return to date stands at a miserable -5.80%. Thus far, the worst calendar month performance for 2018 has been October during which the index has returned -6.94%. The question is will the US Fed release on Wednesday appease markets or make for a record breaking December?