Economic and market updates

Economic Update for February 19, 2019

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 CPI remained unchanged and the core CPI increased 0.2% in January, the Bureau of Labor Statistics stated.
  • The Producer Price Index for final demand slipped 0.1% in January, the Bureau of Labor Statistics noted.
  • The Census reported that retail sales fell 1.2% in December.

employment

  • Initial jobless claims rose by 4,000 to 239,000 in the week ended February 9, 2019, according to the Labor Department.

profits

  • As of February 8, 2019, with 66% of the S&P 500 Index companies reporting fourth-quarter earnings, 71% have reported a positive EPS surprise and 62% reported a positive revenue surprise, according to FactSet.

emotion

  • The NFIB Small Business Optimism Index slipped in January.
  • The University of Michigan’s preliminary index of consumer sentiment rose to 95.5 in February from 91.2 in January.

europe

  • Eurostat reported that industrial production fell by 0.9% in the euro area in December.
  • Germany’s Federal Statistical Office reported that fourth quarter GDP remained flat from the third quarter and rose 0.9% year over year.
  • The Office for National Statistics for the United Kingdom found the GDP grew 0.2% in the fourth quarter.

rates

  • The yield on the 10-year U.S. Treasury note traded in a narrow range.

risks

  • The Fed risks a policy error if they do not re-evaluate the interest-rate path and terminal size of the balance sheet.
  • Brexit, Italian debt dynamics, and the re-emergence of populism risk tipping Europe back into recession.
  • Weak stimulus in China thus far is showing little sign of slowing the pace of deceleration.

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.