USA

Year to Date (YTD)

Commentary: The U.S. economy has shown a mix of resilience and cooling signals in recent weeks. The labour market regained some momentum, with employers adding 64,000 jobs in November, outperforming expectations. Yet, the unemployment rate edged up to 4.6%, the highest level since 2021. Inflation readings remain partially delayed due to the shutdown, but the FED December projections point towards a slow return to target levels. Monetary policy has shifted further toward accommodation, with the FED cutting interest rates by 25 basis points. Financial markets have been volatile ahead of the delayed jobs and inflation releases, though overall sentiment remains cautiously constructive as investors assess the evolving economic landscape. YTD the S&P500 is up 15.6% whilst the tech-focused NASDAQ is 19.7%.

Europe & UK

Year to Date (YTD)

Commentary: The euro area economy has remained resilient into mid December, though growth momentum continues to moderate amid global headwinds. Recent indicators suggest activity held up in the fourth quarter following a 0.3% expansion in the third quarter, with surveys showing services maintaining steady growth while manufacturing softened again. Inflation edged slightly higher to 2.2% in November, remaining close to the European Central Bank’s medium term target. The ECB kept the deposit facility rate at 2%, maintaining a steady policy stance while emphasising data dependence as price pressures ease unevenly across sectors. Labour market conditions remain broadly stable with financial markets staying supportive, the Eurostoxx is up by almost 17% YTD.

Malta

Year to Date (YTD)

Commentary: In the latest report by S&P Global, Malta’s sovereign credit ratings have been affirmed at A /A 2 with a stable outlook, reflecting improving public finances alongside expectations of slower economic growth. The country is set to exit the EU’s excessive deficit procedure as strong revenue performance supports fiscal consolidation, despite several years of high deficits linked to fixed price energy subsidies. Government debt remains just below 40% of GDP, thanks to the economic expansion which the country witnessed post-COVID. Real GDP growth is projected to ease towards 3.5% in 2025 and average around 3.7% through 2028. Even so, momentum remains solid, supported by strong employment, exceptional tourism growth, and rising goods exports, particularly in semiconductor related products. Notwithstanding such economic sentiment, the MALTEX is down by 1.5% YTD.