Weekly Wrap-Up

Last Week In Markets: July 9 - July 13, 2018

Fisher Investments recaps the biggest market, political and economic news from last week, including US consumer and producer prices, UK Brexit negotiations, Japanese industrial production and Chinese trade data.

Global equities rose 1.0% amid generally positive economic reports.

In the US, May wholesale inventories beat expectations, rising 0.6% m/m compared with a 0.1% m/m gain in April. June core consumer prices, which exclude volatile items such as food and energy, rose 2.3% y/y. The Producer Price Index (PPI), which measures the prices businesses pay for inputs used to make final goods and services, rose 3.4% y/y—the highest rate since November 2011. For more on why rising producer prices are mostly noise, please see our 06/15/2018 commentary, “Why Inflation Doesn’t Seem Set to Zoom.”

In the eurozone, industrial production rose 2.4% y/y in May, ahead of expectations. In the UK, May industrial and manufacturing production rose 0.8% y/y and 1.1% y/y, respectively—both missing expectations. May’s exports and imports values rose 2.8% m/m and 2.1% m/m, respectively. In politics, Prime Minister Theresa May published the UK’s promised White Paper, which details the government’s official Brexit proposal. In our view, it’s still too soon to predict what kind of agreement the UK and EU will reach, since the proposal is simply a starting point for negotiations. However, this is a shining example of how widely publicized and transparent the negotiations are—which decreases the likelihood of major negative surprises for markets. For more, see our 06/28/2018 analysis, “Keep Calm as We Brexit On.”

Shifting to Asia, May Japanese industrial production grew 4.2% y/y, missing expectations. In China, June inflation rose 1.9% y/y, as expected. June money supply and loan growth increased 8.0% y/y and 12.7% y/y, respectively. Exports and imports rose 11.3% y/y and 14.1% y/y, respectively.

The Week Ahead:

US data releases include June industrial and manufacturing production figures. The eurozone and UK report June inflation data. Japan releases trade and inflation data while China reports second quarter 2018 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 a Luxembourg tax basis. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.