Weekly Wrap-Up

Last Week In Markets: Dec 20 - Dec 23 2021

Fisher Investments recaps the biggest market, political and economic news from last week, including US Q3 GDP, the Conference Board’s November Leading Economic Index for the US and UK Q3 GDP.

In the US, the third estimate of Q3 2021 GDP was revised up to 2.3% annualized. The Conference Board’s November Leading Economic Index (LEI) increased 1.1% m/m—better than expected. November durable goods orders rose 2.5% m/m, beating expectations for a 1.6% m/m rise. November new home sales rose 12.4% m/m, following an 8.4% m/m decline in October. On Sunday, the $1.75 trillion US budget bill known as Build Back Better reached an apparent impasse in the Senate. While political spectators got a heavy dose of theatrics, we don’t think the absence of additional “stimulus” will dent US economic growth. Love or loathe the proposal, we think these things rarely (if ever) have the economic impact advertised, and pundits regularly overstate their benefits for the economy and stocks. For more, please see our 12/23/2021 commentary: “Stimulus … or Stimu-Less?

In the UK, data were light. The third estimate of Q3 2021 UK GDP was 1.1% q/q and 6.8% y/y. While the recent surge in Omicron cases and the UK government re-implementing restrictions likely dampens some activity, we don’t think this should threaten the economy. For example, despite restrictions and partial lockdowns’ returning in late-2020 and lingering into the spring and summer, November retail sales volumes were 7.2% higher than February 2020, the last month of pre-pandemic data.

The Week Ahead:

Japan releases November inflation, retail sales, industrial production, trade and unemployment data. China reports December purchasing managers’ index (PMI) readings. The eurozone releases November money supply (M3) growth.