Market Review – February 2019
ECONOMY: The synchronized global expansion which was widely cheered heading into 2018 has instead been less consistent and more moderate than expected. Global economic metrics weakened during the fourth quarter contributing to increased volatility in financial markets. The Citi Economic Surprise Index, which measures actual published data versus expectations, closed the year in negative territory or below consensus expectations for several economic regions in the world. The less than robust economic data together with ongoing trade conflicts prompted the International Monetary Fund (IMF) to downgrade its global GDP growth forecast for 2019 from 3.9% to 3.7%, which is comparable to levels achieved in 2017 and 2018.
As the US economy approaches the tenth year of the current expansion, investors are increasingly focused on the possibility of a slowdown. After largely decoupling from the rest of the world with strong growth in the second and third quarters, US growth is projected to moderate in coming years.