Weekly Wrap-Up

Last Week In Markets: July 24 - 28, 2017

Fisher Investments recaps the biggest market, political and economic news from last week, including US and UK Q2 2017 GDP, the Fed monetary policy announcement and Japanese economic data.

Global equities rose 0.1% amid mixed economic data and central bank announcements.

US economic reports were mostly positive. Q2 2017 GDP rose 2.6% q/q annualized, slightly below expectations. Strength in personal consumption, business investment and exports offset residential fixed investment weakness. June durable goods orders grew 6.5% m/m, led by aircraft orders, and ahead of the 3.0% forecast. Initial jobless claims rose to 244,000, slightly higher than the 240,000 consensus forecast. June new home sales rose to 610,000, slightly lower than expectations. The Fed kept interest rates unchanged, noting inflation is still running below target despite job gains, generally strong household spending and business investment. On the political front, Senate legislation to repeal and replace the Affordable Care Act stalled after a series of votes.

UK economic data were generally positive. Q2 2017 GDP expanded 1.7% y/y, meeting expectations. Although manufacturing and construction components fell, services—80% of UK GDP—powered ahead. The UK Financial Conduct Authority announced it will phase out the London Interbank Offered Rate (Libor), a common interest rate benchmark, by the end of 2021. In the meantime, regulators and banks are working to replace Libor with more reliable reference rates. June eurozone household loan growth accelerated to 2.6% y/y, slightly below expectations. June eurozone money supply (M3) increased 5.0% y/y, in line with forecasts.

Japanese economic data were mixed. The unemployment rate decreased to 2.8% in June, lower than the 3.0% forecast. June retail sales grew 2.1% y/y, missing expectations. June inflation, excluding food and energy, remained at -0.2% y/y.

Week Ahead:

The US releases purchasing managers’ indexes, personal consumption, manufacturing, trade and unemployment data. Japan reports purchasing managers’ indexes and industrial production. The eurozone releases GDP, inflation, retail sales and unemployment data.

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.