Gerald Fitzgerald’s Market Review January 21st

LAST WEEK IN 30 SECONDS...

Last week saw the partial US Government shutdown continue as the impasse between Donald Trump and the US Democrats showed no sign of ending. Aside from the political turmoil, the start of the earnings season saw generally positive results being posted.

With the sell-off in Q4 2018 being viewed as a market correction moreover anything more fundamental, global equities added further gains ending the week +3.2% in Euro terms. The reduction in perceived market risk contributed to yields on high quality government bonds rising with the US 10-year Treasury bond and German 10-year bund both rising +0.08%.

LAST WEEK IN 30 SECONDS...

Whilst US markets are closed today to celebrate Martin Luther King Jr. Day, earnings season continues this week with over 760 companies including Johnson & Johnson and Proctor & Gamble due to disclose results from Q4 2018. Markets will look closely for clues as to whether the ongoing trade war between the US and China is having material impacts on company forecasts.

Elsewhere, PMI manufacturing data is due for release from the Eurozone, Japan and the US this week with Euro Consumer Confidence data due for release on Wednesday.

CHINESE GROWTH JUGGERNAUT CONTINUES

China’s Gross Domestic Product (GDP) growth rate stood at 6.6% for 2018, the lowest growth rate since 1990. Whilst concerns of a slowdown are aplenty with Chinese growth anticipated at 6.2% for 2019, many countries can only dream of this growth rate. Italy for instance is anticipating a mere 0.6% growth in GDP for 2019.