Fisher Investments recaps the biggest market, political and economic news from last week, including US inflation data, UK Q4 2020 GDP figures and Chinese and Japanese money supply (M2).
In the US, initial jobless claims fell to 793,000 during the week ending February 6—higher than consensus estimates but still far below the record weekly job losses during the height of the spring 2020 lockdowns. Common measures of inflation remained benign in January—with core consumer prices (excluding food and energy) unchanged from the previous month at 0.0% m/m, and rising 1.4% y/y. Many pundits appear increasingly worried that higher inflation may derail a rebounding economy and stock market. While we are monitoring inflation closely, we believe the more and more pundits watch and warn of inflation means it is less likely to sneak up on stocks. For more, please see our 2/11/2021 commentary, “Good News! More Pundits Are Worried About Inflation.”
In the UK, the first estimate of Q4 2020 GDP reported an increase of 1.0% q/q (-7.8% y/y)—better than expected. December industrial production rose 0.2% m/m, but fell 3.3% y/y. December manufacturing production increased 0.3% m/m, but fell 2.5% y/y.
In Japan, preliminary January money supply (M2) expanded 9.4% y/y, ahead of consensus estimates. January bank lending rose 6.1% y/y. In China, January consumer prices fell 0.3% y/y but rose 1.0% m/m. January loan growth increased 12.7% y/y, in line with forecasts, while money supply (M2) rose 9.4% y/y, less than estimates.
The Week Ahead
The US, UK, eurozone and Japan post February Flash Purchasing Managers’ Indexes (PMIs). The US releases January retail sales and trade data. The eurozone releases its second estimate of Q4 2020 GDP. Japan reports its first estimate of Q4 2020 GDP, January trade figures and January core consumer prices.
Tip of the Week
Fisher Investments’ offices and US markets will be closed on Monday, February 15 in observance of Presidents’ Day.
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 the maximum rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.