Weekly Wrap-Up

Last Week In Markets: Dec 06 - Dec 10 2021

Fisher Investments recaps the biggest market, political and economic news from last week, including US inflation data, UK industrial production and Chinese trade data.

In the US, November consumer prices rose 6.8% y/y, slightly higher than expectations. Similar to October’s CPI reading, gasoline, shelter, food, used cars and trucks, and new vehicles were among the largest contributors. Accordingly, this November inflation report appears to be a continuation of the supply bottleneck inflation pressures we’ve seen for much of this year. As we’ve noted for months, supply shortages may keep inflation elevated a while longer, but we believe these inflation pressures should ease with time as suppliers increase output and demand growth moderates. For more, please see our 12/10/2021 article, “Inflation’s Fix: Patience, Not Policy.”

In the eurozone, the third estimate of Q3 2021 GDP remained unchanged at 2.2% q/q—in line with estimates. In the UK, October industrial production declined 0.6% m/m but increased 1.4% y/y. This week, UK Prime Minister Boris Johnson announced tighter COVID restrictions. Echoing the trend in most of the developed world, the newest COVID restrictions are less severe than in the past. The restrictions will probably hurt leisure, hospitality and retail in city centers, which will once again lose foot traffic from office workers, but businesses aren’t forced to close for now. So overall, the economic impact appears likely to be relatively mild.

In Japan, the final estimate of Q3 2021 GDP showed that the economy contracted 0.9% q/q. November bank lending rose 0.6% y/y. In China, November consumer prices increased 2.3% y/y—lower than consensus estimates. November exports and imports rose 22.0% y/y and 31.7% y/y, respectively. November money supply (M2) and outstanding loans increased 8.5% y/y and 11.7% y/y, respectively.

The Week Ahead:

The US, eurozone, UK and Japan report December purchasing managers’ indexes (PMIs). The US also releases November retail sales and industrial production data. The eurozone and UK report November inflation. Japan announces October industrial production, retail sales and preliminary trade data. China posts November retail sales, industrial production and the unemployment rate. The Federal Reserve, Bank of England, European Central Bank and Bank of Japan meet to set their respective monetary policies.