Fisher Investments recaps the biggest market, political and economic news from last week, including the US & eurozone’s first estimates of Q1 2022 GDP, the eurozone’s March money supply (M3) and Japan’s March unemployment rate.
In the US, preliminary March durable goods orders rose 0.8% m/m, below expectations. New home sales fell 8.6% m/m in March, well below consensus estimates. Initial jobless claims dropped to 180,000 for the week ending April 23. The first estimate of Q1 2022 GDP was -1.4% annualized, widely missing forecasts for 1.1% growth. While this disappointing GDP report likely adds to recession fears, we believe the details suggest Q1 GDP’s small contraction isn’t a harbinger of bigger trouble ahead. While the headline rate was skewed down by factors including decelerating inventory growth and rising imports, the pure private-sector GDP components—consumer spending and investment in non-residential structures, equipment, intellectual property and housing—actually rose and accelerated from Q4 2021. For more, see our 4/28/2022 commentary, “The Low-Down on Q1’s US GDP Downtick.”
In the eurozone, the first estimate of Q1 2022 GDP showed 0.2% q/q, or 5.0% y/y growth. March money supply (M3) rose 6.3% y/y, in line with expectations. On Sunday, April 24, French President Emmanuel Macron cruised to re-election over challenger Marine Le Pen, becoming the first French incumbent president to win re-election in 20 years. Macron’s re-election likely reduces political uncertainty and extends the status quo that French stocks have been fine with for years. For more, see our 4/25/2022 commentary, “Political Uncertainty Falls in France.”
In Japan, March preliminary retail sales rose 0.9% y/y, beating estimates. March preliminary industrial production increased 0.3% m/m, missing expectations. The unemployment rate fell to 2.6% in March. The Bank of Japan left monetary policy unchanged.
The Week Ahead:
The US, eurozone, UK and China report April manufacturing and services Purchasing Managers’ Indexes (PMIs). The US announces April employment figures. The eurozone releases March retail sales. The UK reports March money supply. The US Federal Reserve and Bank of England meet to set their respective monetary policies.
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.