How Much Did the Weather Really Impact the Economy?

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Feb. 28 (Bloomberg) –- Bloomberg’s Michael Regan and Alix Steel discuss the factors that influenced the markets this month in “On The Markets” on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Snowy february.

Was there a theme that happened in the markets?

For the first time since july, we had global stocks, global bonds, and the entire commodity complex rises simultaneously.

Not something that's a big we happens.

If investors are going into bonds they are rotating out of stocks, and vice versa.

It was unusual.

The weather was very much in focus.

What does that tell you?

A lot of it is chalked up to the weather wreaking havoc on models.

In the stock market, we had data point after data point that was weaker than expected.

If you look at the bloomberg economics surprise index, which takes the data as it comes in and compares it to economists' estimates, that index fell to the lowest since 2011 in february, which gives you a sense of how much havoc this weather played on a economists' models.

The weather -- it is like you gave a mulligan.

Weather was a big impact.

If it gets colder or if there is a drought you see commodities react.

A big story.

While we were freezing here, in brazil they had one of the worst drought in a century.

Sugar prices when skyrocketing, copy prices went up.

That was a big part of the commodities rally.

Does that mean we see all the trolleys -- assets trading on fundamentals now?

If you look at earnings, it was a pretty good earnings season.

Earnings per share grew about 8.5%, compared to a 5% growth analysts expected.

Better than expected across the board.

Takeovers in the stock market were a big deal.

Activist, and buybacks.

In that sense, fundamentals did play a role for sure this month.

Also, the market looked like it was in a nosedive at the end of january.

All the emerging market concern in relation to the fed tapering.

Argentina devaluing their currency.

Those concerns kind of went away.

Now you can say the s&p is sitting at a record.

Headlines are coming out about russian soldiers and ukraine, and -- but still buy the dip, that theme regardless of downward revisions we saw.

Very fascinating month.

Thank you so much, michael, for helping us break it down.

I am alix steel.

This text has been automatically generated. It may not be 100% accurate.

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