Weekly Wrap-Up

Last Week In Markets: Jan 1 - Jan 5, 2018

Fisher Investments recaps the biggest market, political and economic news from last week, including global Purchasing Managers’ Index (PMI) reports and US and German employment data.

Global equities rose, welcoming the New Year. In the US, economic data were mostly positive. The December ISM manufacturing Purchasing Managers’ Index (PMI) rose to 59.7, while the non-manufacturing PMI—representing a larger portion of the economy—remained well in expansionary territory at 55.9. (Readings above 50 indicate expansion.) December nonfarm payrolls increased by 148,000, less than expected, but the unemployment rate remained unchanged at 4.1%. November exports and imports increased 2.3% m/m and 2.5% m/m, respectively. The S&P 500 Q4 2017 earnings season kicked off with a dozen companies reporting results. We’ll report final data once all companies have reported.

European data were positive. The eurozone December Markit manufacturing and services PMIs rose to 60.6 and 56.6, respectively. The German December unemployment rate held steady at 5.5% and November retail sales rose 4.4% y/y. In the UK, the December Markit/CIPS services PMI, which represents about 80% of the UK economy, accelerated to 54.2. The December Markit/CIPS manufacturing and construction PMIs fell to 56.3 and 52.2, respectively—lower than forecasts, but still indicating expansion.

In Asia, data were light. China’s official PMI survey of manufacturers, including large, state-owned firms, slowed to 51.6 in December from November’s 51.8. The official December non-manufacturing PMI rose to 55.0. The December Markit/Caixin manufacturing and services PMIs, which capture smaller businesses in the Chinese economy, were positive—rising to 51.5 and 53.9, respectively. In Japan, the December Nikkei manufacturing PMI rose to 54.0 while the services PMI fell to 51.1.

The Week Ahead:

The US releases December retail sales, inflation data and the Q4 2017 earnings season picks up with a number of large banks reporting results. The eurozone posts November retail sales, industrial production and unemployment. The UK reports November industrial production and trade data. China posts December inflation and trade 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 a Luxembourg tax basis. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.