Weekly Wrap-Up

Last Week In Markets: Aug 14 - Aug 18, 2017

Fisher Investments recaps the biggest market, political and economic news from last week, including US/North Korea geopolitics, as well as US, European and Asian economic releases.

Global equities fell amid generally positive economic data.

The week ended tragically with terror attacks in Spain and Finland. While terrorism and senseless acts of violence carry significant human cost, history shows they have little market impact. Such events, though terrible, simply lack the surprise power to derail markets.

US economic data were relatively sparse. The Conference Board’s July Leading Economic Index (LEI) rose 0.3% m/m, in line with forecasts. Retail sales increased 0.6% m/m in July, above estimates—a counterpoint to fears of a consumer spending pullback. July industrial production rose 0.2% m/m, slightly missing expectations. The US, Canada and Mexico began renegotiating the North American Free Trade Agreement (NAFTA). While no one knows how the talks will progress or what a prospective new deal will look like, this will play out slowly and in the public eye—allowing markets ample time to adapt to potential changes.

Eurozone and UK data were largely positive. The second estimate of Q2 2017 eurozone GDP indicated 0.6% q/q growth— providing more evidence the eurozone economic expansion is broader and stronger than many appreciate. June eurozone industrial production rose 2.6% y/y, while key inflation metrics remained tame. In the UK, July retail sales increased 0.3% m/m, beating estimates while the Q2 unemployment rate fell to 4.4%, the lowest level in over 40 years. July core inflation remained modest at 2.4% y/y, matching forecasts.

Japanese Q2 2017 GDP grew at a 4.0% annualized rate, stronger than expected. July export values (13.4% y/y) matched estimates, while import values (16.3% y/y) fell short of forecasts. June industrial production increased 5.5% m/m and retail sales rose 2.2% y/y. July Chinese industrial production and retail sales increased 6.4% y/y and 10.4% y/y, respectively.

The Week Ahead:

The US releases July durable goods orders and the August Markit flash Purchasing Managers’ Indexes (PMI). The eurozone posts August Markit flash PMI. Germany and Spain report final Q2 2017 GDP.

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 a Luxembourg tax basis. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.