US economic data were mixed. The third estimate of Q3 2018 GDP was revised down to 3.4% q/q annualized from the 3.5% pace estimated in October. November’s Leading Economic Index (LEI) rose 0.2% m/m, slightly exceeding expectations. Initial readings for November durable goods orders missed expectations, rising 0.8% y/y. Housing starts increased 3.2% m/m in November after falling in October. As expected, the Fed increased the fed-funds target rate by 0.25% to 2.25% - 2.50%. For additional analysis, please see our 12/20/2018 MarketMinder column, “Is the Fed Inviting Recession?”
In Europe, November eurozone core consumer prices (excluding food and energy) increased 1.0% y/y. In the UK, the third estimate of Q3 2018 GDP showed a 0.6% q/q increase—unrevised from preliminary estimates. November core consumer prices (excluding food and energy) increased 1.8%—slightly decelerating from October. November retail sales rose 3.6% y/y, beating expectations of 1.9% y/y. As expected, the Bank of England left interest rates unchanged at 0.75%.
Asian economic reports were light, and mostly from Japan. There, November core-core consumer prices (excluding food and energy) rose 0.1% y/y. November trade data were mixed as exports grew 0.1% y/y, missing expectations, while imports rose 12.5% y/y and beat expectations. The Bank of Japan announced also it will leave interest rates unchanged at -0.1%.
Data releases are expected to be light in the holiday-shortened week. The US releases November new home sales. Japan reports October LEI numbers, November preliminary industrial production and unemployment 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 a Luxembourg tax basis. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.