The equity markets have performed well in 2019. Essentially the story is one of less bad news than feared. The worries that concerned the markets in late 2018, have not vanished, but are less of a concern currently.
For example, the U.S. and China may be on course for a potential trade agreement next month and trade tensions were a fundamental concern for markets. Plus, while not fully resolved, the extension to the Brexit negotiations have apparently reduced shorter term risks in the U.K., even if uncertainty concerning the overall Brexit process remains.
Data on the U.S. economy has been broadly reassuring. There were some early warning signs that in the U.S. people were starting to spend less and the rate of job growth was slowing. Yet, more recent signs have been a little more promising. Data on U.S. housing has been a little better too, though still mixed. That said, U.S. manufacturing data seems soft and there are concerns that business are spending less. U.S. businesses appear to be using up supplies they already have rather than placing new orders, which is a concern. However the Federal Reserve’s softer stance on interest rates has helped to ease fears and provided a welcome boost to equity markets.
In Europe, things appear relatively flat, Germany a source of concern in recent months and a major driver of the European economy, does not appear to be getting worse, but isn't clearly improving either. In addition, Italian growth remains weak. However, other major European economies, including the U.K. along with France and Spain appear to be holding up better.
Slower Growth Expected For 2019
With the exception of just a few countries such as India and Brazil, it seems probable that economic growth for 2019 will come in lower than 2018 for many countries, but this seems a gentler slowdown, rather than something more abrupt. Markets had been nervous and have reacted positively for much of 2019 not because things are growing especially well, but because a feared sharp slowdown suggested by some data earlier in the year, has apparently not occurred.