Europe is taking center stage with surprisingly better than expected economic data that bodes well for global growth. We have seen of late better than expected GDP, manufacturing, services and retail sales across the Eurozone. In particular the ECB raised its growth rate for the Eurozone to 1.2% this year, its manufacturing PMI was revised up to 53.3 in February and its retail sales jumped 1.6% MoM in January. Commensurate with this the European Central Bank today left its main interest rate at the record low of 0.25% and did not introduce any new stimulus measures. This renewed sign of global growth along with the effective political “internationalization” of the Ukraine problem by the U.S. and Europe although not complete is being heralded by the markets. Please see Global Manufacturing with Eurozone PMI in Global Perspectives page 8.
The Latest Market Commentary From Our Strategists
Weekly Commentary & Statistics
Equity markets surged during the week. After posting its best monthly performance since October, the S&P 500 finished February at a record high, while the Nasdaq reclaimed the post-bubble apex lost during January. If some late-Friday volatility is any indication, however, heightened tensions in Ukraine may have investors on edge going forward.
Monthly Commentary & Outlook
- The Fed is handing the baton to back to the markets for pricing risk, sending volatility higher on its path back to normal.
- Emerging markets health is vital to global growth, as they have doubled their contribution to global GDP over the past decade to nearly 40%.
- S&P 500 corporations derive half of their revenue from overseas; global consumerism and manufacturing provide ongoing support.
- Broad global diversification across equity and fixed income markets is the best way to protect against volatility.