At the end of last year, retail sales in the US were up +0.3% compared to the previous month, thus meeting economists' forecasts. In addition, the November sales increase was revised upwards from +0.2% to +0.3%. Disregarding the often volatile automobile sales, retail sales in December even rose by +0.7%. Despite the solid year-end, however, sales in 2019 as a whole rose less strongly than in the previous year. In 2019, sales rose by +3.6% year-on-year. In 2018, retail sales for the year as a whole still rose by almost +5%, the strongest growth in six years. The latest survey results from the Federal Reserve in Philadelphia also provided grounds for optimism. According to these, the Philly-Fed Business Climate Index rose more strongly than analysts had expected at the beginning of the year, from +0.3 to +17.0 points (consensus +3.8, the highest level since last May). A value above zero points indicates an expansion of economic activity, while a value below zero signals a contraction of the regional sector. The economic barometer thus signals an improved state of the regional industry.
In 2019, against the backdrop of the trade conflict with the US, the Chinese economy expanded more slowly than at any time in almost 30 years. Last year, gross domestic product (GDP) still grew by +6.1%, after having recorded an expansion rate of +6.6% in 2018. However, this growth was in line with market expectations. The simultaneously published data on industrial production and retail trade indicate that the economic bottom may have been reached.
In Asia, share prices rose moderately for the most part at the end of the week and the Japanese Nikkei Index reached its highest level since October 2018.
Shares of Wall Street house Morgan Stanley rose at times by more than +8% after the investment house exceeded profit expectations. Thanks to strong results in investment banking, Morgan Stanley reported a jump in profits to USD 2.1bn in the final quarter of 2019, up +53% from the same period of the previous year. For the full year, net income was USD 8.5bn (+4%). Similar to competitors such as JPMorgan and Goldman Sachs, bond trading was particularly strong, while M&A activity was weaker.
US President Donald Trump wants to fill the two vacant positions on the Board of Directors of the US Federal Reserve (Fed) with economists Judy Shelton and Christopher Waller, the White House announced. Trump had already brought the two economists into play in the summer. The government will now propose Shelton and Waller to the US Senate for confirmation. It is interesting to note that Shelton in particular, like Trump himself, is a critic of the current US Federal Reserve policy and has publicly called for a further easing of monetary policy. Former economics professor Christopher Waller is currently head of the research department of the regional Federal Reserve of St. Louis.
The upward trend in consumer prices in Germany has weakened in 2019. At +1.4%, the rate of cost-of-living inflation last year was the lowest in three years (2018: +1.8%). The background for this development was in particular the falling prices for heating oil and fuels, as reported by the Federal Statistical Office. Energy prices also rose by +1.4% last year compared with a price increase of +4.6% in 2018. Economists are forecasting moderate inflation in Germany for 2020 as well.
|10:30||UK||Retail Sales (y/y)||+1.0%|
|11:00||EZ||Consumer Prices (y/y)||+1.3%|
|11:00||EZ||Core Consumer Prices (y/y)||+1.3%|
|14:30||US||Housing Starts (m/m)||+3.2%|
|14:30||US||Building Permits (m/m)||+1.4%|
|15:15||US||Industrial Production (m/m)||+1.1%|
|16:00||US||Uni Michigan Consumer Confidence||99.3|
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Source: LGT Bank (Switzerland) Ltd.
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