Weekly Wrap-Up

Last Week In Markets: July 08 - July 12, 2019

Fisher Investments recaps the biggest market, political and economic news from last week, including US consumer prices, European industrial production and Japanese bank lending.

In the US, data were light. June consumer prices rose 1.6% y/y and core consumer prices (excluding food and energy) climbed 2.1% y/y. Wholesale inventories grew 0.4% m/m, in line with forecasts. In his testimony to Congress on Wednesday, Fed Chair Jerome Powell alluded to an uncertain US economic outlook tied to continued trade tensions and concerns about the strength of the global economy. Pundits extrapolated Powell’s comments as a strong indicator the Fed will cut rates at the end of July, but we advise investors not read too far into Fed statements. Words don’t guarantee action—the Fed can always change its mind—and we don’t believe a rate cut is necessary for this economic expansion or bull market to continue. For more, please see our 06/05/2019 commentary, “No, the Fed Doesn’t Need to Cut Rates but …

European data were mixed. May eurozone industrial production contracted 0.5% y/y, less than expected, but grew 0.9% m/m. In the UK, May industrial production grew 0.9% y/y. Manufacturing production remained flat year-over-year but grew 1.4% m/m. May construction output increased 1.7% y/y. May exports surged 2.4% m/m following a 4.6% m/m drop in April, while May imports dipped 0.2% m/m. GDP rose 1.5% y/y in May.

In Japan, May industrial production decreased 2.1% y/y but grew 2.0% m/m. Bank lending grew 2.3% y/y in June, trailing expectations. In China, consumer prices grew 2.7% y/y in June, unchanged from May’s 15-month high, while core consumer prices (excluding food and energy) grew 1.6% y/y. June outstanding loan growth came in at 13% y/y. June exports and imports contracted 1.3% y/y and 7.3% y/y, respectively, while the June money supply (M2) grew 8.5% y/y. 

The Week Ahead:

The US reports June retail sales and industrial production figures. The eurozone releases May trade and consumer price data, and the UK reports May unemployment, June consumer prices and June retail sales. Japan announces June inflation and trade figures, and China reports June industrial production, retail sales and Q2 2019 GDP figures.

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.