An optimistic track

The February stock markets continued on the same optimistic track as in January. At the same time, global macro figures are continuing to weaken.

For the month as a whole, the US S&P 500 Index rose by 3.2 per cent measured in USD, while the European Stoxx 600 Index climbed 4.2 per cent measured in EUR and the Nordic VINX Index did the same measured in NOK. In Norway, the Oslo Stock Exchange (OSEBX) rose by 3.6 per cent. 

Weaker macro figures 

The growth outlook measured by the consensus for the G7 countries has been lowered for the third month in a row. At the same time, both US consumption figures and the manufacturing barometers in the USA and eurozone are declining. A weakening of the growth picture without any sign of stabilisation should give cause for concern. The fact that investors are nevertheless investing more in the stock markets is explained by the fact that, among other things, there is less fear of a recession in the USA, that an interest-rate pause has been priced in, and that the trade war seems about to be resolved. In addition, some Chinese activity figures are better than expected and there is greater faith in the economy improving through stimulus measures that have been implemented. 

Can see a solution to the trade war 

The USA and China did not manage to agree on a trade agreement by the self-imposed deadline of 1 March. Nevertheless, a solution to the trade war between the USA and China is now expected. China has apparently promised to buy more goods from the USA to reduce the trade deficit. This will probably be at the expense of other import countries that China trades with. There have also been some indications that the imposed tariffs will be partly or completely removed. Final clarification will be positive for the stock markets, although these superpowers' rivalry and technology war will probably continue. 

Waiting for Brexit 

Brexit continues to dominate the news picture. Two interesting factors have popped up lately. Firstly, it appears that the Brexit deadline will probably be postponed, mainly due to the lack of political ability to support the agreement that is on the table. Secondly, more and more people are now starting to talk about a new referendum on the whole Brexit issue. The head of the Labour Party, Corbyn, even backed this recently. That makes it more likely that Brexit will be terminated. This would undoubtedly be positive for the UK and probably also for the rest of the EU. However, Brexit is still the most likely outcome. 

The road ahead …

Rarely has there been such a rapid and strong recovery after a significant fall in the market like the one in the first two months of the year. The road ahead will probably not be as straightforward, but so far the optimists appear to be clearly in the majority. 

"I'm an optimist, but an optimist who carries a raincoat" 
Harold Wilson