Fisher Investments recaps the biggest market, political and economic news from last week, including US trade data, eurozone inflation and Chinese GDP.
Global markets rose during a holiday-shortened week. US data were mixed. The April Markit manufacturing Flash Purchasing Managers’ Index (PMI) was unchanged from last month at 52.4, missing expectations. The April Markit services Flash PMI fell to 52.9, also below forecasts. However, both readings still indicate expansion. March industrial production fell 0.1% m/m but rose 2.8% y/y. March retail sales increased 3.6% y/y, above estimates. February exports and imports increased 1.1% m/m and 0.2% m/m, respectively.
European data were light. Eurozone April Markit manufacturing and services Flash PMIs came in below forecasts, at 47.8 and 52.5, respectively. We believe concerns over weak manufacturing data are overwrought as services, not heavy industry, represent the majority of eurozone economic activity. March core consumer prices (excluding food, energy, alcohol and tobacco) rose 0.8% y/y, in-line with estimates. February exports and imports increased 4.4% y/y and 4.0% y/y, respectively. In the UK, March core consumer prices (excluding food and energy) were slightly below expectations at 1.8% y/y. March retail sales climbed 6.7% y/y, handily beating estimates.
In Asia, Japan’s April Nikkei manufacturing Flash PMI rose to 49.5, in-line with forecasts. March exports declined 2.4% y/y while imports increased 1.1% y/y. In China, Q1 2019 GDP expanded 6.4% y/y, beating expectations and defying fears of a hard economic landing. March retail sales and industrial production grew 8.7% y/y and 8.5% y/y, respectively—both topping estimates. March’s data are early evidence the government’s stimulus efforts are beginning to bear fruit. For more, please read our 4/17/2019 commentary, “Finding the Green Shoots in China.”
The Week Ahead:
The US releases the first estimate of Q1 2019 GDP, March durable goods orders and new home sales. Japan publishes March retail sales, unemployment and the Bank of Japan meets to set monetary policy.
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.