Weekly Wrap-Up

Last Week In Markets: Dec 10 - Dec 14, 2018

Fisher Investments recaps the biggest market, political and economic news from last week, including US industrial production, preliminary eurozone Purchasing Managers’ Indexes and Japanese retail sales.

In the US, economic data were mixed. November industrial production rose 0.6% m/m, beating expectations, while manufacturing production was flat m/m, missing the consensus. The December Markit manufacturing and services Purchasing Managers’ Indexes (PMIs) preliminary readings came in at 53.9 and 53.4—down from the prior month—but still in expansion. November retail sales rose 4.2% y/y. November core consumer prices (excluding food and energy) rose 2.2% y/y, in line with expectations. October business inventories rose 0.6% m/m, following an upwardly revised 0.5% m/m rise in September.

In the eurozone, October industrial production rose 1.2% y/y, beating expectations. The preliminary December Markit manufacturing and services PMIs both fell to 51.4—missing expectations, but still indicating expansion. In the UK, Brexit continued to dominate headlines. On Wednesday, Prime Minister Theresa May survived a no-confidence vote called by fellow Conservatives in Parliament. While this eliminates one Brexit uncertainty, others remain. As we have said in the past, a resolution—whatever it looks like—should reduce uncertainty and bring markets relief. UK economic reports were light, but mixed this week. October imports rose 2.8% m/m, while exports increased 1.0% m/m to an all-time high of £53.4 billion. Conversely, October manufacturing and industrial production disappointed expectations by falling 1.0% y/y and 0.8% y/y, respectively. On Thursday, the ECB formally ended its four-year quantitative easing program, as was widely expected.

In Asia, November Chinese industrial production rose 5.4% y/y, easing from a 5.9% y/y reading in October. November retail sales rose 8.1% y/y, missing expectations. In Japan, Q3 2018 GDP stayed flat y/y, missing market expectations of 0.3% y/y growth. October industrial production rose 4.2% y/y, more than expected, while October retail sales rose 3.6% y/y. The December Markit manufacturing PMI came in at 52.4.

The Week Ahead:

The Fed, Bank of England and Bank of Japan meet to set their respective monetary policies. The US releases the final reading of Q3 2018 GDP, preliminary November durable orders and housing start figures. The eurozone reports October trade and November inflation data. The UK announces November inflation and retail sales numbers, along with Q3 2018 GDP and trade data. Japan announces November inflation and trade figures.

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.