US stock markets continued to forge ahead during February: the Dow Jones Industrial Average Index reached a new closing high, while the S&P 500 Index breached 5,000 points for the first time. Over February as a whole, the Dow rose by 2.2%, the S&P 500 Index increased by 5.2%, and the Nasdaq Index climbed by 6.1%.
- US inflation eased to 3.1% YoY in January
- Germany is expected to slip into recession
- The Nikkei 225 Index reached its highest level since December 1989
A record month: US stock markets continued to forge ahead during February: the Dow Jones Industrial Average Index reached a new closing high, while the S&P 500 Index breached 5,000 points for the first time. Over February as a whole, the Dow rose by 2.2%, the S&P 500 Index increased by 5.2%, and the Nasdaq Index climbed by 6.1%. The ‘Magnificent Seven’ continued to make a splash: in particular, Nvidia rose by 28.6% over the month.
“Over 2024 as a whole, the Bundesbank expects the German economy to ‘tread water’”
FOMC remains circumspect: the annualised rate of consumer price inflation in the US eased from 3.4% in December to 3.1% in January; however, the rate of core inflation remained unchanged at 3.9%. Minutes from the January meeting of the Federal Open Market Committee suggested that policymakers remained cautious about the risks of “moving too quickly” to cut rates, preferring to wait until they have “greater confidence that inflation is moving sustainably toward 2%”. The US labour market remained strong in January: the economy added 353,000 new jobs during the month, compared with a monthly average of 255,000 during 2023. The rate of unemployment remained at 3.7%; meanwhile, average hourly earnings rose at an annualised rate of 4.5% during January, stoking some concerns about lingering inflationary pressures.
Germany set to “tread water”: the rate of inflation in the eurozone crept lower during January, falling from 2.9% year on year in December to 2.8%. Elsewhere, Germany’s central bank, the Bundesbank, warned that the country’s economic recovery is likely to begin slightly later than previously expected. Economic output could once again decline during the first quarter, which would push Germany into a technical recession. Over 2024 as a whole, the Bundesbank expects the German economy to “tread water”. Nevertheless, according to the Ifo Institute , business sentiment amongst German companies picked up during February, and the Dax Index rose by 4.6% over the month.
Nikkei reaches highest level for 34 years: Japan’s economy entered recession following the news that it had contracted for two consecutive quarters. The economy shrank by 0.4% between October and December, undermined by a decline in private demand. Nevertheless, the Nikkei 225 Index rose by 7.9% during February, and also reached a new closing high during the month, finally surpassing its previous peak set on 29 December 1989.
To view the series of market updates through February, click here
