Delayed figures on US GDP growth for the fourth quarter of 2018, now scheduled for 28 February, could provide a jolt to financial markets.

Thanks to the shutdown in Washington a series of financial reports produced by federal agencies have been held up, including GDP estimates from the Bureau of Economic Analysis.

Ahead of the release economists at investment banks JPMorgan and Barclays cut their forecasts for annualised growth in the final three months of 2018 from 2.6% to 2%, and from 2.8% to 2.1% respectively.

The downgraded expectations followed an alarming set of US
retail sales figures (14 Feb). Sales fell 1.2% in December which represented the largest monthly decline in nine years. Consumer spending really matters as it accounts for the majority of overall economic activity in the US.

A weaker than expected performance from the US economy would almost certainly elevate fears over global growth and could wreck a decent start to the year for global equities.

How global markets have performed year-to-date

NASDAQ 100 (US) +11.5%

S&P 500 (US) +10.7%

Hang Seng (Hong Kong) +9.2%

DAX (Germany) +6.9%

FTSE 100 (UK) +6.7%

Nikkei 225 (Japan) +6.4%

Source: SharePad, 19 February 2019

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