Fisher Investments recaps the biggest market, political and economic news from last week, including US inflation data, UK and eurozone GDP and Japanese lending data.
Global equities rose 1.2% in the week. In the US, January core consumer prices (excluding food and energy) remained unchanged at 2.3% y/y, from the prior reading. January industrial production fell 0.8% y/y—beating expectations. January manufacturing production also remained negative, but improved to -0.8% y/y—ahead of forecasts. January retail sales increased 4.4% y/y, lower than expected.
In the UK, the first estimate of Q4 2019 GDP was flat, in line with estimates. December industrial production ticked up 0.1% m/m, but fell 1.8% y/y. December manufacturing declined 2.5% y/y—missing expectations, but slightly improved from November. In our view, December’s figure is the result of continued Brexit-related uncertainty weighing on business activity and sentiment. However, now that the UK has officially left the European Union we expect the UK economy to benefit from falling uncertainty—especially as businesses begin to gain clarity on trade. For more, please see our 1/31/20 commentary, “Today in Brexit, Day 1,316.” In the eurozone, the second estimate of Q4 2019 GDP growth was revised down slightly to 0.1% q/q. December 2019 industrial production decreased to 4.1% y/y, worse than expected. December exports and imports rose 4.8% y/y and 1.1% y/y, respectively.
Asian Data from Asia were light. In Japan, December retail sales continued to fall at -2.6 % y/y. January bank lending grew 1.9% y/y—in line with expectations. In China, the January inflation rate accelerated to 5.4% y/y, increasing from the prior reading and exceeding analyst estimates.
The Week Ahead:
The US releases January Leading Economic Index data and February Markit flash manufacturing and services Purchasing Managers’ Indexes (PMIs). The UK and eurozone post February flash PMIs. Japan reports preliminary Q4 2019 GDP, January trade figures and February Markit/JMMA Manufacturing PMIs. China releases January loan growth figures.
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.