US economic data were mixed. Q1 GDP grew at a 0.7% seasonally-adjusted annualized rate, missing the 1.0% forecast. Lower utilities spending, slower auto sales and tepid government spending offset strength in housing, construction and exports. March durable goods orders missed expectations (0.7% m/m vs. 1.3%) as lower motor vehicle demand outweighed increases in commercial and military aircraft. Housing data were positive with March new home sales handily beating estimates. A partial US Federal government shutdown was averted as Congress approved a bill to fund operations through next week. President Trump introduced a framework for his long-awaited tax plan, leaving legislators to fill in the details.
The first round of the French presidential election concluded Sunday. Centrist newcomer Emmanuel Macron and conservative populist Marine Le Pen advance to the May 7 runoff vote. Markets responded positively to the additional clarity. Eurozone April core inflation rose 1.2% y/y—the fastest in almost four years and above the 1.0% estimate. The European Central Bank left monetary policy unchanged, though it noted growing economic momentum amid higher global trade activity. UK Q1 GDP grew 2.1% y/y as broad economic growth continues to defy Brexit concerns.
Japanese March industrial production increased a healthy 3.3% y/y, but missed forecasts for 3.9%. March inflation also fell short at 0.2% y/y. The Bank of Japan left monetary policy unchanged. However, the Bank cited improving longer-term industrial production trends and higher export activity in an upgraded economic outlook.
The US releases April auto sales, March trade data and factory orders. The eurozone posts April manufacturing and services purchasing manager indexes (PMIs) and March unemployment. The UK reports April manufacturing and services PMIs and March mortgage approvals.
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.