Market Watch – March 1, 2019
Big Picture
N.A. Markets Struggle for Direction; No-Deal Brexit Looking Less Likely
U.S. stocks slumped for a third straight session Thursday as investors considered slowing U.S. GDP growth for Q4 and an early, somewhat abrupt, end to the U.S.-North Korea summit. GDP rose at a 2.6% annual rate in the last three months of 2018; while that beat many analysts’ estimates, it fell short of the 3.4% growth rate in Q3 and 4.2% in Q2. On the diplomacy front, Trump on Thursday cut short his summit with North Korea’s Kim Jong Un after failing to make any progress on limiting North Korea’s nuclear-weapons program. Although Trump on Monday delayed raising tariffs on Chinese imports, optimism over U.S.-China trade talks is fading a bit as it’s becoming clearer that Beijing is still unwilling to make the large structural changes to its economy that Washington is seeking. Adding to the negative sentiment was news that Chinese factory activity shrunk to a three-year low and that China’s export orders declined at their fastest pace since the global financial crisis.
British Prime Minister Theresa May agreed Tuesday to allow Parliament to delay the U.K.’s exit from the EU if lawmakers again reject her divorce agreement with the bloc, making a no-deal Brexit extremely unlikely. The news sent the British pound up to its highest level against the greenback since October. Additionally, the opposition Labour Party on Wednesday night confirmed it would file a parliamentary motion calling for a new referendum by March 12, the date by which Ms. May has promised to hold a second vote on her withdrawal agreement.