Global stocks ended the week 0.7% lower. The third estimate of Q1 2017 US GDP was revised upward to 1.4 % q/q annualized as personal consumption and exports were stronger than previously estimated. Preliminary May durable goods orders increased 2.7% y/y, though fell short of estimates. May personal income beat expectations, increasing 3.5% y/y. Pending home sales missed forecasts in May, declining 1.7% y/y. The Federal Reserve released its annual bank stress test results with most lenders surpassing expectations. On the political front, Senate Republicans postponed a vote on their version of the health care bill.
Europe provided the week’s biggest positive surprises. In Germany, preliminary June consumer prices jumped to 1.6% y/y versus the 1.4% y/y forecast. May retail sales beat estimates, surging 4.8% y/y. In France, June preliminary consumer prices increased 0.7% y/y, ahead of the 0.5% y/y forecast. May consumer spending grew 1.4% y/y, beating forecasts. The final revision to UK Q1 2017 GDP matched expectations for 2.0% y/y growth. Mid-week ECB commentary recognizing improvements in European economic data appeared to trigger a jump in global long-term interest rates, further diminishing deflationary fears.
In Japan, May retail sales grew 2.0% y/y and May consumer prices rose 0.4% y/y, both less than forecasted. Japan’s preliminary May industrial production increased 6.8% m/m, but also missed expectations.
The US reports May jobs and June ISM Purchasing Managers’ Index (PMI) surveys. The Federal Reserve releases minutes from their June meeting. In Europe, countries report May industrial production numbers.
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.