Market Update

Examining market reactions to economic data always provides interesting insights. Last week's PMI data from Germany and France, coupled with the inversion of the US yield curve (where short-term US debt yields more than long-term debt, a situation not seen since 2007), raised concerns about global growth, contributing to mixed performances in global equity markets this week.
While recent economic data has been somewhat underwhelming, it's premature to sound the recession alarm bells. The data hasn't drastically changed; it's the market's response that has shifted.
Despite a light week in terms of significant economic data, the released readings were far from gloomy. For instance, the Chicago Fed National Activity index for February came in slightly better than expected, with a revision up in January's reading as well.
Since the global financial crisis in 2008/09, we've contended that global economic growth has been relatively steady (albeit at times weak) and non-inflationary, which we believe is the new norm.
There's an adage: 'when the US sneezes, the world catches a cold.' Even though US economic growth is expected to slow from 2.9% in 2018 to around 2% in 2019, 2018's numbers were buoyed by Donald Trump's tax reforms. A 2% growth rate in the US, alongside continued job creation, doesn't signal a looming recession.
In the UK, Brexit drama continued, yet little changed. It's astounding that today (Friday, March 29, 2019) was supposed to be Brexit Day, yet the uncertainty prevails. Despite Theresa May's deal being defeated again, Brexit clarity might emerge due to the European elections in May 2019. Most MPs oppose a no-deal Brexit, making a further Brexit delay the likely option (though businesses don't favor this, as it prolongs existing uncertainties affecting investments).
Looking ahead, we have elections in Ukraine and Turkey, US and eurozone retail sales, Chinese PMI data, US employment figures (non-farm payrolls, unemployment rate, participation rate, and average earnings), eurozone unemployment data, and eurozone CPI readings in the coming week.