Market Update: Thurs, Feb 28, 2019 | LPL Financial Research

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Daily Insights

China, Japan feeling the effects of U.S.-imposed tariffs. In China, official Purchasing Managers’ Index (PMI) data showed manufacturing factory activity hit a three-year low as new export orders shrank for a ninth straight month. However, total new orders moved back into expansionary territory, suggesting future activity may rebound. Japan, meanwhile, saw its factory output drop by the most in a year thanks in large part to a decline in Chinese demand. Adding to the country’s woes was a report that showed retail sales in January slowed sharply from the previous month, dashing hopes that domestic demand would help to offset weaker external demand in Japan’s export-oriented economy. Still, though aggregate economic data are coming down from last year’s highs, clarity on the U.S.-China trade situation and Brexit (hopefully in the near term), and a more patient Federal Reserve (Fed), should help to sustain healthy levels of global economic growth over the next 12-18 months, if not longer.

Fourth-quarter GDP beats estimates. After a month-long delay, investors finally have more context on the level of economic growth last quarter. Gross domestic product (GDP) rose 2.6% in the fourth quarter, above consensus estimates for a 2.2% gain. Consumer spending contributed 1.9% to the growth rate, while business spending added 0.8%. Net exports were a 0.2% drag on growth, the biggest detractor from an otherwise solid quarter. We’ll dive into details of the report later today on the LPL Research blog.

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Thursday

  • GDP Report (QoQ, Q4 2018, Initial and First Revision)
  • Germany CPI Report (Preliminary, Feb)
  • Japan Jobless Rate (Jan)
  • Japan Tokyo CPI Report (Feb)
  • Caixin China Manufacturing PMI (Feb)

Friday

  • Core PCE (MoM, Dec)
  • Markit US Manufacturing PMI (Feb)
  • ISM Manufacturing PMI (Feb)
  • University of Michigan Sentiment Index (Feb)
  • Japan Consumer Confidence Index (Feb)
  • Germany Unemployment Claims Rate (Feb)
  • Eurozone Unemployment Rate (Jan)
  • Eurozone CPI Report (Feb)

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Index data obtained via FactSet

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