Last Week in Markets Weekly Wrap-Up

Last Week In Markets: Aug 15 - Aug 19 2022

Fisher Investments recaps the biggest market, political and economic news from last week, including July eurozone and UK inflation data, July US LEI data, and US, UK, Japan and China retail sales.

In the US, the Conference Board’s July Leading Economic Index (LEI) declined 0.4% m/m, slightly less than expected. July manufacturing and industrial production expanded 0.7% m/m and 0.6% m/m, respectively—both beating expectations. July retail sales rose 10.3% y/y, but were flat m/m. Retail sales excluding gas stations increased 0.2% m/m. The national average price of gas is down from its mid-June high, which appears to have freed up some money for more discretionary spending last month. For more, please see our 8/18/2022 article, “Retail Sentiment and Gas Prices.”

In the eurozone, July core consumer prices (excluding energy, food, alcohol and tobacco) rose 4.0% y/y, in line with expectations. The second estimate of Q2 2022 GDP was revised lower to 0.6% q/q and 3.9% y/y. In the UK, July retail sales fell 3.8% y/y but rose 0.1% m/m. July core consumer prices (excluding food and energy) increased 6.2% y/y, higher than expected. The UK became the first major country to record double-digit headline inflation with the Consumer Price Index’s 10.1% y/y rate. In our view, a UK recession is possible and could already be underway, but we believe reality is likely better than feared. For more, please see our 8/17/2022 commentary, “Britain’s Sky-High Inflation Fosters Low Expectations.”

In Japan, the first estimate of Q2 2022 GDP was 0.5% q/q, missing expectations. July core-core consumer prices (excluding food and energy) rose 2.4% y/y, in line with expectations. July imports increased 47.2% y/y while exports increased 19.0% y/y, both higher than expected. Final June industrial production expanded 9.2% m/m but fell 2.8% y/y. June retail sales decreased 1.3% m/m but increased 1.5% y/y. In China, July retail sales and industrial production rose 2.7% y/y and 3.8% y/y, respectively—both falling short of estimates.

The Week Ahead:

The US, UK, eurozone and Japan release August purchasing managers’ indexes (PMIs). The US releases the second estimate of Q2 2022 GDP, along with July new home sales and durable goods orders. The eurozone reports July money supply.

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.