Global equities moved higher amid political chatter and central bank announcements.
As expected, the Fed raised its benchmark fed-funds target rate 25 basis points, noting the US economy’s continued strength. February housing construction accelerated, with new home starts and completions approaching their fastest growth rates in nine years. February’s retail sales and consumer prices met expectations at 0.1% m/m and 2.7% y/y respectively, while manufacturing production beat expectations at 0.5% m/m. Overall industrial production grew but missed expectations, tied to unseasonably warm weather and reduced heating demand. Political gridlock over the American Health Care Act deepened following the Congressional Budget Office’s assessment.
In the Netherlands, incumbent Prime Minister Mark Rutte’s party won a plurality of votes, while populist Geert Wilders’ party claimed fewer parliamentary seats than expected. The results relieved markets, which eyed the Dutch election as a harbinger for France’s and Germany’s upcoming elections. Eurozone February consumer prices grew 2.0% y/y, while January industrial production was lighter than expected, rising 0.6% y/y. The UK economy added 90,000 jobs in January, and its unemployment rate decreased to 4.7%. The Bank of England left interest rates unchanged.
Economic data in Asia were mixed. The Bank of Japan left monetary policy unchanged. Japan’s January industrial production figures were slightly better than expectations, but declined -0.4% m/m. Machinery orders registered a large miss at -8.2% y/y, and retail sales matched 1.0% y/y estimates. In China, February fixed asset investment and industrial output topped estimates at 8.9% y/y and 6.3% y/y.
Europe and the US report March Purchasing Managers’ Indexes. The US releases February durable goods and existing home sales data, and the UK releases retail sales, consumer and home prices. Japan reports trade data.
Sources for data cited are FactSet, Eagle PACE, Bloomberg. 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.