Fisher Investments recaps the biggest market, political and economic news from last week, including June US inflation data, May eurozone, UK and Japan industrial production, and Chinese Q2 GDP.
In the US, June industrial and manufacturing production fell 0.2% m/m and 0.5% m/m, respectively—both below estimates. June retail sales rose 1.0% m/m and 8.4% y/y. June consumer prices increased 1.3% m/m and 9.1% y/y—both higher than expected. Core consumer prices—which exclude food and energy—also exceeded expectations, rising 0.7% m/m and 5.9% y/y. While higher prices are certainly painful, from an investing standpoint, we believe as investors continue to gain clarity on inflation and other related fears—such as interest rates, supply chains and China’s intermittent lockdowns—it should help stocks move on from today’s concerns and price in the brighter future ahead. For more, please see our 7/14/2022 MarketMinder article “Another Multi-Decade Inflation High”
In the eurozone, May industrial production rose 0.8% m/m and 1.6% y/y—both higher than expected. In the UK, May industrial production increased 0.9% m/m and 1.4% y/y—both above estimates. May manufacturing production grew 1.4% m/m and 2.3% y/y—both exceeding forecasts.
In Japan, final May industrial production contracted 7.5% m/m and 3.1% y/y. June money supply (M2) grew 3.3%, above expectations. In politics, the late Shinzo Abe’s Liberal Democratic Party (LDP) and its coalition partner, Komeito, took the vast majority of seats up for election—giving them a super majority in both houses of the Diet. For more, please see our 7/11/2022 MarketMinder article “Political Update: Tragedy in Japan, Tumult in Britain.” In China, Q2 2022 GDP rose 0.4% y/y, missing expectations. June industrial production expanded 3.9% y/y, slightly lower than expected. Retail sales increased 3.1% in June, beating forecasts. June exports rose 17.9% y/y while imports rose 1.0% y/y. Money supply (M2) increased 11.4% in June,
The Week Ahead:
The US, eurozone and UK report flash July manufacturing and services Purchasing Managers’ Indexes (PMIs). Japan releases flash July manufacturing PMI and preliminary June trade data. The US reports June leading economic indicators. The eurozone, UK and Japan report June inflation data. The UK announces June retail sales figures. The Bank of Japan and European Central Bank meet 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.