Fisher Investments recaps the biggest market, political and economic news from last week, including US and eurozone GDP estimates, Chinese and Japanese PMI figures and US personal income data
In the US, the first estimate of Q1 2021 GDP growth was 6.4% annualized, or 0.4% y/y. March durable goods orders rose 0.5% m/m, missing expectations. Personal income in March grew by a record 21.1% m/m. The Fed left monetary policy unchanged. On Monday, House of Representatives redistricting officially began after the US Census Bureau announced the final tally of which states will gain and lose seats. The results flip a handful of seats from traditionally Democratic states to traditionally Republican states. Redistricting should contribute to gridlock, as representatives unsure of their redrawn district’s electorate likely avoid rocking the boat by watering down or scrapping legislative proposals. Since the Democratic House majority is the party’s slimmest in over a 100 years, only a handful of more cautious Democratic representatives could jettison big legislation. For more, please see our April 27 commentary, “Redistricting Congress: Gridlock’s Underappreciated Boost.”
In the eurozone, data were light. The first estimate of Q1 2021 GDP showed contraction of -0.6% q/q, or -1.8% y/y. March unemployment fell to 8.1%, beating expectations for a rise. March money supply (M3) rose 10.1% y/y.
In Japan, the April Jibun Bank Manufacturing Purchasing Managers’ Index (PMI) was revised higher to 53.6 (readings over 50 indicate expansion). March exports rose 16.1% y/y and imports rose 5.8% y/y. March preliminary retail sales rose 5.2% y/y, beating estimates. March preliminary industrial production increased 2.2% m/m, exceeding expectations for a decline. The unemployment rate fell to 2.6% in March. The Bank of Japan left monetary policy unchanged. In China, the official April NBS Manufacturing and Non-Manufacturing PMIs—focused on large, state-owned firms—came in at 51.1 and 54.9, respectively. The April Markit/Caixin Manufacturing PMI—which includes smaller businesses—was 51.9.
The Week Ahead:
The US, eurozone and UK revise April manufacturing and service PMIs. The US reports April unemployment. The eurozone releases March retail sales. The UK reports March money supply and the Bank of England meets to set monetary policy. China releases April trade data.
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.