Weekly Wrap-Up

Last Week In Markets: July 23 - July 27, 2018

Fisher Investments recaps the biggest market, political and economic news from last week, including US GDP growth and eurozone money supply growth.

Global equities rose 0.8% amid mixed economic reports. US economic data were mixed. The first estimate of Q2 2018 GDP growth was reported up 4.1% q/q annualized, in line with expectations. Markit’s July Flash Manufacturing Purchasing Managers’ Index (PMI) beat expectations at 55.5, while the Flash Services PMI narrowly missed expectations at 56.2 (readings above 50 indicate expansion). Preliminary June durable goods orders grew 1.0% m/m, falling short of the consensus forecast. New home sales totaled 631,000 in June, also missing the consensus estimate. In geopolitics, President Trump and European Commission President Jean-Claude Juncker tentatively agreed to resolve the current US-EU trade dispute, with the US suspending tariffs on steel and aluminum imports and the EU agreeing to not add new tariffs. For more on these developments, see our 07/25/2018 commentary, “Trade Truce Take Two?

In Europe, June eurozone broad money supply (M3) surged 4.4% y/y, ahead of expectations for 4.0% y/y and potentially foreshadowing future economic growth. Markit’s July eurozone Flash Manufacturing PMI also beat expectations at 55.1, while the Services PMI lagged at 54.4. As expected, the European Central Bank (ECB) left interest rates and its quantitative easing program unchanged. However, the ECB did affirm they intend to end the program at the end of 2018.

In Asia, economic data were light. Markit’s July Japanese Manufacturing PMI reading missed expectations at 51.6. The Conference Board released its third reading for Japan’s May Leading Economic Index (LEI) at 106.9. In China, the People’s Bank of China (PBOC) reported it will ease a specific capital requirement on Chinese banks to support lending and meet the demand for credit.

The Week Ahead:

Markit releases final July Services and Manufacturing PMIs for the US and eurozone. The eurozone data reports include the first reading of Q2 GDP. The Fed meets to set monetary policy in the US. China releases July Manufacturing and Services PMIs, while Japan releases June unemployment.

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.