Economic and market updates

Economic Update for February 20, 2018

Highlights of news-making events of the past week, from the economy and profits to Europe and interest rates.

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economy

The BLS reported that the CPI increased 0.5% and core CPI rose 0.3% in January. The Producer Price Index advanced 0.4% in January. The Commerce Dept. reported that housing starts soared 9.7% and retail sales fell 0.3% in January. The BLS noted both import and export prices climbed in January. The Fed noted industrial production slipped 0.1% in January.

employment

Initial jobless claims rose by 7,000 to 230,000 in the week ended February 10, 2018, according to the Labor Department.

profits

As of February 9, 2018, with 68% of S&P 500 Index companies reporting fourth-quarter earnings, 74% reported positive EPS surprises and 79% posted positive sales surprises, according to FactSet.

emotion

The University of Michigan's index of consumer sentiment jumped to 99.9 in February from 95.7 in January. The NFIB Small Business Optimism Index improved in January. The Bloomberg Consumer Comfort Index rose to 57.0 in the week ended February 11, 2018, from 54.4 in the prior week.

europe

Eurostat reported that industrial production grew 0.4% and the euro area posted a trade surplus in December. Euro area GDP increased 0.6% in the fourth quarter. Germany's Federal Statistical Office noted that wholesale prices jumped 2.0% in January. The United Kingdom's Office for National Statistics stated that the CPI's annual rate was 2.7% in January, unchanged from December.

rates

The yield on the 10-year U.S. Treasury note rose.

risks

  • China's nominal GDP growth could begin to decline
  • There is a mismatch between low-volatility market environment and policy uncertainty
  • Fed tightening measures could potentially contribute to inverting the yield curve in 2018

All economic and performance information is historical and does not guarantee future results. The views and opinions expressed are those of Putnam Investments, are subject to change with market conditions, and are not meant as investment advice.

Your clients should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus containing this and other information for any Putnam fund or product, call Putnam at 1-800-354-4000. Your clients should read the prospectus carefully before investing.