Last week’s article was littered with Negative Nancy’s. This week, many of them have become the life of the party. At least for now…

Government Shutdown

A shutdown was averted last week as barriers funding was added to the bill to keep the government opened. While funding was well below the President’s expectations, it was enough to appease markets that another shutdown would be avoided.

US/China Trade Talks

Last week, President Trump made indication that he would consider putting a 60-day moratorium on increases expected March 1^st. That is, assuming trade talks are going well. Regardless of the disclaimer, markets favored the chance of status quo.

Brexit

Fooled you, this one is still terrible!

EU Growth

German GDP was flat quarter over quarter. While not great news, the German economy avoided a technical recession (two consecutive quarters of negative GDP growth).

Conclusion

The S&P 500 grew by 2.5% last week, but truly not much has changed.

• The government is open, but emergency powers are causing more friction.
• US/China trade issues are still not resolved.
• Brexit is a mess.
• The EU is still decelerating.

Avoiding the trade discussion, the US seems poised to decouple from the global economy in the short run. Meager inflation, strong consumer sentiment, and flat interest rate expectations give us hope. In the long-term, however, it may inevitably rejoin the global slowdown.

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