The $10-trillion stock rally gets a reality check from slow growth
economictimes | March 11, 2019
A $10 trillion global stock rally is showing signs of fragility, and you can blame the economy.
Both the American and European benchmarks posted their biggest weekly losses since the darkest days of December’s sell-off, with the S&P 500 dropping 2.2 per cent. While the week ended with the European Central Bank’s dovish turn and President Donald Trump predicting a “very big spike” in US markets once a trade deal with China is reached, stock declines were a sign that after a sharp two .. Blame macro. It’s nothing new to bond traders, but as positive catalysts from a pause in US tightening to trade optimism look increasingly priced in, the deteriorating economic picture has become harder to ignore. US jobs data missed consensus estimates by a wide mark on Friday, plunging to the weakest in more than a year. “A kind of trade deal will support the market, but once the deal has been announced with all details, market participants will re-focus on PMIs and corporate earnings again,” said Petra Pflaum, co-head of EMEA equities at DWS Group GmbH, which oversees the equivalent of about $744 billion. “Global indicators have been weaker than expected, and that’s raising alarm bells.”