Global growth and policy among the major economic trends in 2016
WEEKLY MARKET COMMENTARY |
Investors’ focus this week will likely remain squarely on movements in the price of global oil and junk bond markets around the long-awaited kick-off of the Fed’s rate normalization campaign. We believe the 2.3 percent decline in the Standard and Poor’s 500 last week was primarily driven by concerns over global growth and the possibility of further erosion in the price of oil, which stands in contrast with what appears to be another year of mild above-trend growth in the United States. That divergence in growth and policy between the U.S. and the rest figures to be one of the major narratives going forward in 2016.
This week beyond the Federal Open Market Committee rate decision will feature a spate of first-tier economic releases in industrial production, inflation, housing and the final estimate of third quarter growth. Richmond Fed President Jeffrey Lacker will present his 2016 economic outlook in Charlotte on Friday.