Lofty Trump promises

For the month as a whole, the US S&P 500 Index rose 2.0 per cent measured in USD while the European Stoxx 600 Index fell 1.0 per cent measured in EUR and the Nordic VINX Index climbed 0.8 per cent measured in NOK. In Norway, the Oslo Stock Exchange (OSEBX) continued to develop poorly and dropped 3.2 per cent, weighed down by the oil price. 

A truce in the trade war? 

The much talked-about dinner in Argentina on Saturday 1 December between presidents Trump and Xi led to positive signals and allegedly an agreement not to increase the tariffs on goods traded between these two countries for the next 90 days. So a kind of truce. The stock markets reacted with jubilation and a sharp rise on Monday. The optimism lasted until Trump announced in a tweet on Tuesday that he was a "tariff man" and that the goal was "a real deal with China or no deal at all". In total, enough to send the markets downhill again. The signals from China relating to the information issued by the Trump administration seem to show some irritation. It remains to be seen whether there will be any real negotiations over the next 90 days. 

Mixed signals from the Fed 

The US central bank (Fed) has led the way in normalising the monetary policy. Since 2015, the Fed has raised the interest rate all of eight times and has announced that more are in the pipeline. Investors have been worried that the interest rate is being raised too quickly. The latest signals, according to which Fed chairman Powell first said that the interest rate was "far away from" the so-called neutral level and then said it was "just below", has made many people believe the interest-hike rate may be reduced. Weaker growth expectations reinforce this belief. 

Oil and inflation 

November was otherwise characterised by increasing unrest in both the oil and credit markets. In addition, technology shares fell a lot, while the noise surrounding Brexit and Italy continued. Although a falling oil price is negative for oil producers, it makes a positive contribution to households' buying power and helps to lower the inflation outlook. 

The road ahead ... 

The fundamental picture of the global economy has been weakened slightly but is still positive and global earnings are predicted to grow a lot in 2019 too. With this as the starting point, we believe the economic cycle is still expanding but that we should expect further volatility. 

"My big focus is China and OPEC and all of these countries that are just absolutely destroying the United States" 
Donald Trump