Weekly Wrap-Up

Last Week In Markets: Dec 24 - Dec 28, 2018

Fisher Investments recaps the biggest market, political and economic news from last week, including US political updates and Japanese inflation data.

Global stocks rose amid continued volatility in a holiday-shortened week. While it’s impossible to know exactly what drives short-term market volatility, many of the topics garnering headlines recently—tightening monetary policy, tariffs, Brexit, recession fears and others—seem well contained in our view. Additionally, positive progress on many of these fronts seems largely ignored. This illustrates our belief recent sentiment-driven volatility overlooks many positive economic and market fundamentals. During market volatility, investors’ best course of action is to remain patient and disciplined—two keys to a successful long-term investment strategy. US economic data were light. Initial jobless claims decreased 0.4% for the week ending December 22. Over the weekend, the US government entered a partial shutdown. While government shutdowns make for great media headlines, they historically have had a negligible effect on markets or the economy. For more commentary on government shutdowns, please see our 12/17/2018 MarketMinder article, “Sorting Through the Potential Shutdown Noise.”

In Asia, economic reports were also sparse. Japan’s November preliminary industrial production rose 1.4% y/y, beating expectations. Retail sales increased 1.4% y/y, below estimates. December consumer prices rose 0.3% y/y while the November unemployment rate increased slightly to 2.5%.

The Week Ahead:

The US releases December manufacturing and services Purchasing Managers’ Indexes (PMIs), nonfarm payrolls and unemployment data. The eurozone, UK and China report December manufacturing and services PMIs. The eurozone also announces November loan growth. Japan reports December manufacturing PMI.

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.