Weekly Wrap-Up

Last Week In Markets: July 05 - July 08 2022

Fisher Investments recaps the biggest market, political and economic news from last week, including US, eurozone, UK, China and Japan June Purchasing Manager Indexes (PMIs), US unemployment rate and Japanese bank lending data.

In the US, the final June S&P Global US Services Purchasing Managers’ Index (PMI) was revised down to 52.7 from the preliminary reading of 53.4 (PMI readings above 50 indicate expansion). May exports and imports rose by 1.2% m/m and 0.6% m/m, respectively. June nonfarm payrolls rose by 372,000, higher than forecasts, while the unemployment rate remained at 3.6%. For more analysis on recent labor market data, please see our 7/7/2022 MarketMinder article “Why JOLTS Shouldnt Jolt Your Economic Outlook.”

In the eurozone, the final June S&P Global Eurozone Services PMI was revised higher to 53.0, above the preliminary estimate of 52.8 and signaling expansion. May retail sales rose 0.2% m/m and 0.2% y/y. In the UK, the final June S&P Global/CIPS UK Services PMI was revised higher to 54.3, above the initial estimate of 53.4. In politics, Boris Johnson’s resignation now kick starts the process to find a successor within the Conservative Party. While there is uncertainty surrounding how these events will play out, as clarity arrives gradually, we believe falling uncertainty likely provides a modest tailwind to UK stocks.

In Japan, the final June Jibun Bank Services PMI was 54.0, marking the third straight month of expansion. Bank lending rose 1.3% y/y in June. In China, the June Caixin Services PMI was 54.5, above estimates.