Fisher Investments recaps the biggest market, political and economic news from last week, including US Q4 2019 GDP, a Brexit update, and Japanese industrial production data.
Global equities fell as US impeachment trial proceedings continued and the Wuhan coronavirus dominated headlines. In the US, the first preliminary reading of Q4 2019 GDP growth showed the economy grew at 2.1% q/q, beating forecasts for 1.9% q/q growth. December new home sales were little changed from November, although missed expectations at 694,000. The Fed left short-term interest rates unchanged at their policy meeting. For more, please see our 01/31/2020 commentary, “As January Ends, Global Economy Still Looks Healthy.”
In the United Kingdom (UK), Parliament passed their Brexit bill and the European Union (EU) ratified the agreement, meaning the UK will leave the EU at midnight today. However, the relationship between the EU and UK will largely remain practically unchanged as they negotiate a trade deal during the transition period ending on December 31, 2020. In economic news, UK money supply (M4), rose 0.1% m/m in December. In Europe, the first estimate of Q4 2019 GDP showed 1.0% y/y growth, missing expectations. Money supply (M3) rose 5.0% y/y in December, slowing from November and rising less than consensus estimates.
Early readings of Japanese industrial production showed an increase of 1.3% m/m in December after falling 1.0% m/m in November. December retail sales fell 2.6% y/y according to initial estimates. Housing starts declined 7.9% y/y in December. The December imports and exports were revised to -4.9% y/y and -6.3% y/y respectively. The unemployment rate in December was unchanged from November at 2.2%. In China, the January official manufacturing and non-manufacturing Purchasing Managers Indexes (PMIs) were released at 50.0 and 54.1, respectively (readings above 50 indicate expansion.)
The Week Ahead:
The US releases revised readings of December durable goods orders and January Markit PMIs. Similarly, the eurozone, Japan and the UK post final January PMIs.
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.