Fisher Investments recaps the biggest market, political and economic news from last week, including US, UK, eurozone and Chinese Services Purchasing Managers’ Index (PMI) readings, eurozone retail sales figures and Japanese money supply data.
In the US, data were light. The final June Markit Services Purchasing Managers’ Index (PMI) was revised down to 64.6 from the preliminary reading of 64.8. PMI readings above 50 indicate expansion. The US Bureau of Labor Statistics released its June Employment Situation Report last Friday, with headline figures showing employment has a ways to go before regaining pre-pandemic levels. Although speculation abounds about what the report’s findings might mean for the economy, monetary policy and markets, we caution investors from extrapolating too much from this report. Jobs data are inherently backwards-looking and have little significance for forward-looking markets, in our view. For more, please see our 7/7/2021 commentary, “Why Jobs Don’t Sway Stocks.”
In the eurozone, the final June Markit Services PMI was revised up to 58.3, reaching an over 10-year high. May retail sales rose 4.6% m/m, slightly higher than consensus estimates, and 9.0% y/y. In the UK, the final June Markit/CIPS Services PMI was revised up to 62.4, improving upon preliminary estimates and remaining near record highs. May industrial and manufacturing production rose 20.6% y/y and 27.7% y/y, respectively, both lower than expected.
In Japan, the final June Markit/Jibun Bank Services PMI was 48.0, marking 17 consecutive months of contraction. Preliminary June money supply (M2) rose 5.9% y/y. In China, the June Markit/Caixin Services PMI was 50.3, lower than the consensus forecast. June money supply (M2) rose 8.6% y/y, higher than the previous month and narrowly beating expectations.
The Week Ahead:
The US announces June industrial and manufacturing production. The US and China release June retail sales figures. The eurozone and Japan announce May industrial production and May retail sales figures. The US, eurozone and UK release June core consumer prices. China reports June trade data. The Bank of Japan meets to set monetary policy.
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.