Weekly Wrap-Up

Last Week In Markets: Jun 21 - Jun 25 2021

Fisher Investments recaps the biggest market, political and economic news from last week, including US, UK, eurozone and Japanese Manufacturing and Services PMIs, the third estimate of US Q1 2021 GDP and The Bank of England's monetary policy decision.

In the US, the third estimate of Q1 2021 GDP remained unchanged at 6.4% annualized and 0.4% y/y, as expected. The June Markit Flash Manufacturing Purchasing Managers’ Index (PMI) rose to 62.6, above expectations, while the June Market Flash Services PMI fell to 64.8, below estimates. Readings over 50 indicate expansion. Preliminary May durable goods orders increased 2.3% m/m, less than forecasted. May new home sales declined 5.9% m/m to an annualized rate of 769,000, missing expectations. After weeks of negotiations, centrist senators and President Biden reached a tentative infrastructure deal on Thursday. While this is a step in crafting legislation, whether it is a major step forward—and not simply sideways—remains to be seen. Regardless of whether this infrastructure proposal is eventually enacted or not, we don’t think it will be make or break for the economy or markets. For more, please see our 06/25/2021 article “About That Big Bipartisan Infrastructure Breakthrough ...

In the UK, the May Markit/CIPS Flash Manufacturing and Services PMIs fell slightly to 64.2 and 61.7, respectively, but remain near record highs. The Bank of England left monetary policy unchanged. In the eurozone, the June Markit Flash Manufacturing PMI held steady at 63.1 while the June Market Flash Services PMI rose to 58.0—both beating consensus estimates. May money supply (M3) increased 8.4% y/y, in line with expectations.

In Japan, the June Jibun Bank Flash Manufacturing and Services PMIs were 51.5 and 47.2, respectively.

The Week Ahead:

The US, UK, eurozone, Japan and China release final June manufacturing PMI readings. The US reports June employment figures. The eurozone posts June inflation and May unemployment data. The UK releases the second estimate of Q1 2021 GDP and Q1 trade data. Japan announces May industrial production, trade data and unemployment.