Global Markets Rally as US GDP Surges, Recession for the UK
The FTSE 100 and European stocks saw gains on Thursday, with Wall Street also advancing, as the U.S. economy demonstrated stronger-than-expected growth in the final quarter of last year.
According to the Bureau of Economic Analysis (BEA), U.S. gross domestic product (GDP) increased by 3.4% in the last quarter of 2023 compared to the same period the previous year. This final estimate marks an improvement from the 3.2% growth reported in the second estimate. The BEA attributed the faster growth to upward revisions in consumer spending and non-residential fixed investment.
Meanwhile, in the UK, official data confirmed that the country entered a recession in the second half of 2023. The Office for National Statistics (ONS) reported a 0.3% decline in GDP during the final three months of the year, following a 0.1% decrease in the previous quarter. This downturn was sharper than economists had anticipated.
Pierre Veyret, a technical analyst at ActivTrades, commented on the positive market sentiment in Europe: “Equities traded slightly higher in Europe on Thursday. Benchmarks are still hovering around record levels, and market optimism remains high. Investors continue to bet on upcoming rate cuts from central banks around the world, and this confidence is clearly reflected in the market at the moment.”
He added that recent dovish signals from officials at the European Central Bank (ECB) and the Federal Reserve (FED), along with encouraging inflation trends, are bolstering market sentiment. “Even with some indices trading in uncharted territory, it seems that no one wants to miss out on the ongoing rally, driven by a fear of missing out,” Veyret noted.
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