Weekly economic update

Economic Update for February 11, 2019

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

economy

  • The U.S. Composite PMI Output Index remained unchanged at 54.4 in January.
  • The Census reported that the trade deficit narrowed in November.
  • Factory orders decreased 0.6% in November, the Census noted.
  • Durable goods orders increased 0.7% in November, according to the Census.

employment

  • Initial jobless claims fell by 19,000 to 234,000 in the week ended February 2, 2019, according to the Labor Department.

profits

  • As of January 31, 2019, of the 216 S&P 500 Index companies reporting fourth-quarter earnings, 154 — or 71.3% — beat analysts’ estimates, according to S&P Dow Jones Indices.

emotion

  • Eurozone investor confidence declined in February, recording its lowest level in four years, according to the Sentix index.

europe

  • Retail trade fell 1.6% in December, according to Eurostat.
  • Eurostat reported that industrial producer prices declined 0.8% in December.
  • The Markit Eurozone Composite PMI Output Index slipped to 51.0 in January from 51.1 in December.
  • Germany’s Federal Statistical Office stated that industrial production decreased 0.4% in December.

rates

  • The yield on the 10-year U.S. Treasury note declined.
  • The Bank of England’s monetary policy committee voted to maintain the bank rate at 0.75%.

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.