US economic data were relatively light and generally positive. Housing data remained positive in March as existing home sales grew 4.4% m/m, beating forecasts and rising to the highest levels in a decade. Building permits also beat forecasts. The Leading Economic Index rose 0.4% in March, bolstered by a positive interest rate spread and improving new manufacturing orders. March industrial production grew 0.5%, an acceleration from February. Weekly jobless claims ticked slightly higher to 244,000, but remain near multi-decade lows.
Overseas, headlines focused on non-market events. In the UK, Prime Minister Theresa May surprised many by calling for a snap election on June 8. If the current conservative-majority government successfully gains more seats in Parliament, the UK will strengthen its bargaining power in Brexit negotiations. However, the two-year Brexit timeline remains unchanged. Across the Channel, a Paris terror attack halted campaigning for the preliminary round of French presidential elections. The attack appeared to have little impact on candidate polling or the broader markets ahead of this Sunday’s first round election.
Global economic data were sparse, but generally positive. UK March core retail sales grew 2.6% y/y, but missed estimates. Preliminary eurozone manufacturing and services Purchasing Managers Indexes rose to cycle highs in April, beating estimates and reaffirming our belief European economic activity remains far stronger than appreciated. In Japan, trade data beat expectations—exports grew by 12% y/y and imports by 16% y/y.
Over the weekend, France votes in the first round of presidential elections. If no candidate wins a majority, the top two vote-getters will meet in a final election on May 7.
US Congress returns from spring recess and will debate a funding bill to avoid a partial government shutdown. The US reports Q1 2017 GDP, personal consumption, March durable goods orders and April manufacturing data. The UK also reports Q1 GDP and the eurozone releases preliminary April inflation data. The European Central Bank and the Bank of Japan announce rate decisions. Japan releases industrial production, employment and inflation data.
Sources for all data cited are FactSet and Bloomberg. 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 a Luxembourg tax basis. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.