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Global Growth falling off a cliff? This week we get to peer into the global growth crystal ball and see

Mar 25, 2019

Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions
Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions

 

  • Fears over slowing global growth gripped markets last week and sent the S&P 500 Index down 1.90% on Friday, the US benchmark’s second-largest intraday decline in 2019. Should investors be concerned? Important economic metrics from major financial nations set to be released this week may shed light on whether the global economy is in the midst of a brief dip or at the beginning of a more severe trend downward.
     
  • The United States, United Kingdom, France, and Canada will all release gross domestic product (GDP) readings for 4Q2018 this week.
     
  • The United States will announce a revised 4Q2018 GDP estimate on Thursday. Economists at JPMorgan Chase estimate that the US will announce a revised 4Q2018 GDP estimate of 1.8%, notably below the 2.6% growth estimate provided by the Bureau of Economic Analysis one month prior.  
     
  • A significantly lower US GDP estimate provided on Thursday would suggest that the economic superpower is more vulnerable to slowed global growth than previously believed, harshening fears over a global slowdown, according to the Wall Street Journal.  
     
  • Canada will announce y/y January GDP growth on Tuesday. Economists expect y/y GDP growth of 1.4% in January for Canada, higher than the 1.1% in December.  
     
  • France will report its final readings for y/y GDP growth in 4Q2018 on Tuesday. Economists expect France to announce final y/y GDP growth of 0.9% in 4Q2018, matching the 0.9% estimate previously offered.
     
  • The United Kingdom will announce its final readings for y/y GDP growth in 4Q2018 on Friday. Economists expect the United Kingdom to report final y/y GDP growth of 1.3% in 4Q2018, matching the 1.3% estimate previously offered.
     
  • Global growth fears entered investors’ focus last week after the US Fed announced they would stand pat at current interest rate levels and signaled no more rate hikes to come in 2019 on Wednesday. Fears over slowing global growth were then magnified on Friday after new data signaled a worse-than-expected pullback in Eurozone manufacturing activity.  
     
  • Several signals across global financial markets indicate growing fears over slowing global growth.
     
  • The US Treasury yield curve inverted on Friday for the first time since 2007 after the yield on the US 10-Year Treasury Bond crept below that of the US 3-Month Treasury Bill.  
     
  • The yield on the German 10-Year Government Bond fell below 0% on Friday for the first time since 2016.  
     
  • Futures on US Federal-funds on Friday implied that the broad market is pricing in a 56% chance of at least one rate cut in 2019 by the US Fed, according to the Wall Street Journal. This is significantly higher than the 11% chance priced in a month ago.

 

 

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Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS