RockCreek Daily Market Update

GLOBAL MARKET SNAPSHOT 

Equity Markets:
Sentiment continued to seesaw on Friday as pessimism around trade negotiations during the overnight session in Asia was short-lived as stocks rallied in Europe and the U.S. Gains across the Eurozone were fairly uniform with the exception of Greece +0.2%, which lagged. Spain’s IBEX +1.9% was the strongest performer despite the prime minister calling for a snap election in April after having his budget rejected earlier this week. Both Europe and the U.S. saw cyclicals and value names lead.

Bond Markets:
The Treasury curve saw a modest bear steeping with yields inside 5-years seeing the biggest rise. Spanish debt was effectively unchanged despite the political strife, although the snap election announcement was well flagged.

Currency Markets:
The U.S. dollar index dipped -0.1%. The greenback was stronger in early trading, but a weaker industrial production print and dovish comments from San Francisco Fed president Mary Daly (“case for a rate increase isn’t there”) sent it into retreat. British pound +0.7% led among G-10 following stronger than expected retail sales numbers (sales volume rose at the fastest pace in six months in January).

Commodity Markets:
The Bloomberg Commodity Index gained +1.2%, the strongest one-day rise of the year. Crude oil led the way with WTI and Brent +2.5% and +2.6%, respectively.

MACRO OVERVIEW

As referenced above, U.K. retail sales surprised to the upside in January, increasing 1.0% month-over-month and 4.2% from a year prior. Expectations were for increases of 0.2% and 3.4%, respectively. 

U.S. industrial production unexpectedly declined in January with the Fed’s measure falling -0.6% versus expectations for a 0.1% rise. According to the release, manufacturing production was -0.9% lower led by a large drop in motor vehicle assemblies. 

Consumer sentiment recovered from January’s weakness according to the University of Michigan’s Survey of Consumers. The headline index rebounded by 4.3 points to 95.5 but remained lower on a year-over-year basis. The current conditions and expectations components increased 1.2 and 6.3 points, respectively. The recovery was attributed to the “end of the partial government shutdown as well as a more fundamental shift in consumer expectations due to the Fed's pause in raising interest rates.” Notable was respondents expectations for inflation, which fell to the lowest level recorded in the past fifty years, reflecting expected gains in inflation-adjusted income.

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The information contained herein has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or to participate in any strategy. Nothing contained herein shall be relied upon as a promise or representation as to the past or future performance.   This material represents the views of RockCreek.  This information should not be construed as investment advice. Some of the information may be provided to discuss general market activity, industry or sector trends, or other broad-based economic, market, or political conditions.  Information and opinions are as of the date of this material only and are subject to change without notice.  RockCreek has no obligation to provide any updates or changes to such information. The opinions, forecasts, assumptions, estimates, and commentary contained in this material are based on information provided to RockCreek on both a formal and informal basis.  Further, any such opinions, forecasts, assumptions, estimates, and commentary are made only as of the date of this material, are subject to change at any time without prior notice and cannot be guaranteed as accurate.

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