In Observance of Presidents' Day, all Peapack-Gladstone Bank locations
will be closed on Monday, February 18, 2019.
IMPORTANT NOTICE :
NEVER trust wiring or ACH instructions sent via email. ALWAYS confirm with the sender by phone or in-person. Cyber criminals are hacking email accounts and sending emails with fake wiring instructions. These emails are convincing, sophisticated, and often appear to come from someone you know or work with. Always independently confirm wiring or ACH instructions in-person or via a telephone call to a trusted and verified phone number. NEVER wire or ACH money without double-checking that the wiring or ACH instructions are correct.
The Weekly Economic & Market Recap
February 15, 2019
Global growth deceleration was one of the triggers that caused risk assets to correct in the 4th quarter of 2018. China, the world’s second largest economy, recently released its 2018 GDP growth figure, which slowed to 6.4% on a yearly basis and was the slowest pace of growth since 2009. There are numerous headwinds facing China and one of which is the deleveraging campaign that is shrinking the shadow lending sector and making it more difficult for certain companies to refinance their debt. Moreover, the liquidity crunch that is taking place precipitated a record 119.6 billion yuan (approximately $17.7 billion) of defaults in 2018. Chinese officials are attempting to halt the credit cycle from deteriorating further by adding cash to the financial system by lowering banks’ required reserve ratios and introducing a new bank-perpetual-debt swap program. Although credit availability is still limited for certain borrowers, we feel that the steps taken thus far should help boost credit growth. Another headwind impacting China has to do with its demographic profile. There have been numerous studies about the relationship between age and productivity and the results have found that people aged 40 to 49 tend to add the most to productivity growth. China’s aging population will require increasing amounts of support and will weigh on longer-term economic growth. A final headwind for China pertains to the trade war with the United States. Both sides have been working feverishly to come to terms and progress is being made, however differences still remain. The current deadline of March 1st could be pushed back for 60 days, but if it is not then tariffs on $200 billion of Chinese goods will increase from 10% to 25% and it could negatively impact Chinese GDP by roughly 30 basis points. Due to the willingness of both sides to reach an agreement, we believe the trade war will be resolved, but given the complexity of certain issues a full resolution will take some more time.
Click below to listen to this week's Peapack-Gladstone Bank Market Report as heard on WCBS NewsRadio 880.
