Last Week In Markets: Jan 10 - Jan 14 2022

Global equites fell amid news US consumer prices rose 7.0% y/y (0.5% m/m) in December—the fastest year-over-year rate since 1982. While various supply shortages may keep inflation elevated a while longer, we believe inflation pressures should ease with time as suppliers increase output. In our view, as inflation continues topping the list of investors’ fears in 2022, investors should remember the power of global stocks—which outpaced consumer prices handily in 2021. For more, please see our 1/12/2022 commentary, “On Inflation, Trust the Market”

In the US, December industrial and manufacturing production decreased 0.1% m/m and 0.3% m/m, respectively, falling short of expectations. December retail sales rose 16.9% y/y but fell 1.9% m/m, below forecasts. December core consumer prices (excluding food and energy) rose 5.5% y/y and 0.6% m/m, slightly exceeding consensus estimates.

In the eurozone, November industrial production increased 2.3% m/m, exceeding expectations. The November unemployment rate ticked down to 7.2%, in line with estimates. In the UK, GDP expanded 0.9% m/m in November, above forecasts. November industrial production rose 1.0% m/m, while manufacturing production rose 1.1% m/m—both higher than forecast.

Japan’s preliminary December money supply (M2) rose 3.7% y/y, slightly lower than estimated. In China, December consumer prices increased 1.5% y/y, less than expected. December loan growth grew 11.6% y/y, slightly below the previous reading. December money supply (M2) rose 9.0% y/y, higher than consensus estimates.

The Week Ahead:

The US and UK release unemployment data. The UK, eurozone and Japan report December inflation data. The UK, China and Japan report November and December retail sales. Japan releases November industrial production and preliminary December trade data. China reports Q4 2021 GDP.

Tip of the Week:

Fisher Investments’ offices and US markets will be closed on Monday, January 17 in observance of Martin Luther King Jr. Day.

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. Any commentary regarding strategy or performance reflects our Global Total Return strategy benchmarked to the MSCI World Index. Some clients may have different benchmarks reflecting different objectives and circumstances, including permanent allocations to cash or fixed income. Please note that accounts may not contain all elements of the strategy discussed here. Additionally, individual client customizations and start dates may preclude certain elements of this strategy from being implemented. 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. The S&P 500 Composite Index is a capitalization-weighted, unmanaged index that measures 500 widely held US common stocks of leading companies in leading industries, representative of the broad US equity market. The MSCI Europe, Australasia and Far East (EAFE) Index is an unmanaged, capitalization-weighted stock index measuring the performance of selected stocks in 21 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. The MSCI World Small Cap Index is an unmanaged, capitalization-weighted stock index measuring the performance of investable securities with a market capitalization below that of the companies in the MSCI Standard Indexes, targeting approximately 14% of free-float adjusted market capitalization in 23 developed countries. It is presented here net of dividend withholding taxes and uses the maximum rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.

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.