Feb 1, 2019

Markets yawn as Italy enters technical recession

Italian Prime Minister Giuseppe Conte. Photo: Michele Spatari/NurPhoto via Getty Images

Italy fell into a technical recession in 2018, with quarter-over-quarter growth declining in both the third and fourth quarters of the year, national statistics bureau ISTAT reported on Thursday.

Of note: The country's GDP fell 0.2% in the fourth quarter, following a 0.1% decline in the third. However, Italian GDP rose 0.1% on an annual basis in Q4 and 0.7% in Q3. (The definition of recession is quite nuanced and hotly debated.)

Recession of any kind is generally worrisome, but markets were little moved by the news because Italy's stalled growth has been known for some time.

  • The spread between Italian 10-year bond yields and similarly dated German bonds remained near 240 basis points, and the country’s benchmark FTSE MIB closed just 0.21% lower on the day.

What they're saying: Italian Prime Minister Giuseppe Conte was also undisturbed by the (technical) recession announcement.

  • "I'm not at all worried ... Even the most naive analysts know that at this moment there is a trade war going on between the United States and China," he told reporters.
  • "Above all, Germany is holding us back ... it's a transitional phase, which depends on external factors."
  • "We are interested in focusing on the relaunch of our economy, which will certainly take place in 2019 ... This relaunch will hit full capacity in the second half."

More bad news for the EU: German retail sales fell by 4.3% in December, the biggest monthly drop in 11 years.

Go deeper

In photos: India welcomes president with massive "Namaste Trump" rally

First Lady Melania Trump, President Trump and India's Prime Minister Narendra Modi attend the "Namaste Trump" rally at Sardar Patel Stadium in Motera, on the outskirts of Ahmedabad, on Monday. Photo: Mandel Ngan/AFP via Getty Images

President Trump told a massive crowd at a rally in Ahmedabad, northwest India, Monday he hopes to reach a trade deal with his ""true friend" Prime Minister Narendra Modi during his two-day visit to the country "except he's a very tough negotiator."

Why it matters: The countries are forging deeper ties, particularly in the military dimension, as India’s location, size and economic growth making it the "obvious counterweight to China" for American policymakers, per Axios' Dave Lawler and Zachary Basu. Prime Minister Narendra Modi demonstrated the importance of the visit with a "Namaste Trump Rally" at a packed 110,000-capacity Sardar Patel Stadium in Ahmedabad — the world's largest cricket venue.

Go deeperArrowUpdated 15 mins ago - World

Coronavirus spreads to more countries as cases in South Korea surge

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

Afghanistan, Kuwait and Bahrain each reported their first cases of the novel coronavirus, Al Jazeera first reported, as infections in South Korea, Italy and mainland China continued to increase on Monday.

The big picture: As South Korea and Italy stepped up emergency measures in efforts to thwart the spread of the virus, World Health Organization officials expressed concern about infections with no clear link to China. COVID-19 has killed at least 2,619 people and infected almost 80,000 others, with all but 27 deaths occurring in mainland China.

Go deeperArrowUpdated 28 mins ago - Health

Sanders reveals free childcare plan for preschoolers

Democratic presidential candidate Sen. Bernie Sanders speaks during a campaign rally on Saturday in El Paso, Texas. Photo: Cengiz Yar/Getty Images

Democratic presidential candidate Sen. Bernie Sanders announced on CBS' "60 Minutes" Sunday a new plan to guarantee free child care and pre-kindergarten to all American children from infancy to age four.

Details: In the wide-ranging interview, Sanders told Anderson Cooper he planned to pay for universal childcare with a wealth tax. "It's taxes on billionaires," he said.

Go deeperArrowUpdated 6 hours ago - Politics & Policy