February 2015 – Economic Review
Foreign and domestic stocks rebounded as European leaders granted Greece a four-month bailout extension.
Depositors moved over €25 billion out of Greek banks in 2015, according to JP Morgan. The substantial loss of collateral and reserves hampers Greek banks’ ability to originate loans and borrow to maintain capital ratios.
In this issue:
- Several European sovereign bond yields reached negative territory, with Swiss 10-year bonds yielding -0.045%.
- The NASDAQ Index approached 5000, a level last seen in March 2000.
- Growth of the NASDAQ Index, driven largely by consumer and ad-based companies, reflects the resurgence of consumer spending, even as corporate budgets focus on cost cutting and productivity enhancement.
- The return of a strong dollar received criticism from analysts who believe that weaker export demand will cripple growth prospects.
- Gasoline prices reversed their rapid descent as crude oil prices rebounded from multi-year lows.