Markets continued their poor start to 2016 with another down week. Technology and Biotech names were sold off especially hard due to a combination of poor earnings from some key names and regulatory scrutiny over drug prices.
The U.S. employment report came in far lower than expected for the month of January. The poor report sent stocks down on Friday and pushed funds toward bonds instead. Concern is growing that the U.S. may be succumbing to weakness overseas.
Poor economic data and the flight to safety in asset markets have futures rates projecting that the Fed will not raise rates at all in 2016. The dollar index has slipped over recent weeks and pushed the Euro to its highest point against the greenback in three months.
Data out of Europe was mixed this week. While unemployment is at its lowest point since 2009 the overall rate is still in the double digits. In addition, German factory orders missed expectations despite the recent fall in the Euro.
Citi released a bearish report this week, describing the global economy as in the midst of a “death spiral.” The strong dollar, glut of oil supply, weak commodities, and weak emerging market growth are in a dynamic feedback loop that could lead to a global recession according to the bank.
The Trans Pacific Partnership trade deal was signed this week during meetings in New Zealand. Ratification in the U.S. will prove to be a difficult process given concern from both parties and the 2016 election gaining attention each day.
Google briefly overtook Apple to become the world’s biggest company this week. A strong earnings report sent the internet firm higher while Apple’s worrisome guidance for future phone sales has sent the stock down in recent weeks.