Fisher Investments recaps the biggest market, political and economic news from last week, including US, UK, eurozone, Chinese and Japanese Manufacturing and Services Purchasing Managers' Indexes (PMIs), US trade data and eurozone retail sales.
In the US, the final July Markit Manufacturing and Services Purchasing Managers’ Indexes (PMIs) were revised slightly higher to 63.4 and 59.9, respectively. PMI readings above 50 indicate expansion. While PMIs continue to signal growth, the data also showed the strain of severe supply shortages, which some pundits argue could stall the ongoing economic recovery. However, we believe stock markets have likely already priced in well-known supply shortages. As we have noted before, stocks didn’t anticipate a perfectly smooth reopening—and this seems like just another facet of that. For more, please see our 8/2/2021 commentary, PMIs, Supply Hiccups and Stocks. June imports and exports rose 2.1% m/m and 0.6% m/m, respectively. The July unemployment rate fell to 5.4%, lower than expected, while nonfarm payrolls expanded by 943,000, ahead of consensus estimates.
In the UK, the final July Markit/CIPS Manufacturing PMI was 60.4—unchanged from the first estimate. The final July Markit/CIPS Services PMI was revised higher to 59.6. The Bank of England left interest rates unchanged. In the eurozone, the final July Markit Manufacturing PMI was revised up slightly to 62.8 while the final July Markit Services PMI was revised down to 59.8. June retail sales rose 5.0% y/y, beating consensus expectations.
In Japan, the final July Jibun Bank Manufacturing and Services PMIs were revised higher to 53.0 and 47.4, respectively. In China, the July Caixin Manufacturing and Services PMIs were 50.3 and 54.9, respectively.
The Week Ahead:
The US and China announce April consumer prices. The eurozone releases June industrial production. The UK reports the first estimate of Q2 2021 GDP, preliminary Q2 trade figures and June industrial production. Japan and China report July money supply (M2) growth.
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.