Weekly Wrap-Up

Last Week In Markets: Apr 01 - Apr 05, 2019

Fisher Investments recaps the biggest market, political and economic news from last week, including US GDP unemployment and eurozone manufacturing.

Global markets rose as headlines continued focusing on US-China trade talks and Brexit. US data were mostly positive. The final estimates of March Purchasing Managers’ Indexes (PMIs)—forward looking economic growth indicators —slowed, but continued to signal expansion. March ISM manufacturing and non-manufacturing PMIs came in at 55.3 and 56.1, respectively, both beating estimates. March Markit manufacturing and services PMIs were reported at 52.4 and 55.3, respectively. February retail sales declined 0.2% m/m, missing expectations, but grew 2.2% y/y. February durable goods orders fell 1.6% m/m, driven by lower transportation equipment demand. March nonfarm payrolls expanded by 196,000, more than expected, while the March unemployment rate was unchanged at 3.8%.

European data were mixed. The eurozone reported the final March Markit services PMI at 53.3—beating estimates and indicating growth. In contrast, the final March Markit manufacturing PMI came in at 47.5, slightly missing expectations. The weak manufacturing data has garnered some headlines, however, we don’t believe it indicates the eurozone expansion is faltering. Importantly, the services sector, not manufacturing, comprises the majority of eurozone GDP—and services growth continues at a healthy clip. For more, please see our 3/26/2019 commentary, Flashing Perspective on Eurozone Manufacturing. February retail sales grew 2.8% y/y, exceeding expectations. February unemployment held steady at 7.8%. In the UK, the March Markit / CIPS manufacturing PMI rose to 55.1, well ahead of the consensus forecast. The March Markit / CIPS services PMI fell to 48.9, missing expectations.

In Asia, Japan’s March Nikkei manufacturing PMI rose to 49.2, ahead of estimates, while the services PMI came in at 52.0, slightly below expectations. February household spending rose 1.7% y/y. China’s Caixin services and manufacturing PMIs came in at 54.4 and 50.8, respectively. The official March manufacturing and non-manufacturing PMIs rose unexpectedly from the previous month, reflecting expansion at 50.5 and 54.8, respectively.

The Week Ahead:

The US releases March inflation and February factory orders. The eurozone and UK post February industrial production. The UK also releases February trade figures. The European Central Bank meets to set monetary policy. Japan publishes March bank lending, while China reports March inflation and trade figures.

Source for all data cited is FactSet. This update constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. No assurances are made we will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. In addition, no assurances are made regarding the accuracy of any forecast made herein. Global equities are represented by the MSCI World Index. The MSCI World Index measures the performance of selected stocks in 23 developed countries and is presented net of dividend withholding taxes and uses the maximum rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.