Weekly Wrap-Up

Last Week In Markets: Mar 14 - Mar 18 2022

Fisher Investments recaps the biggest market, political and economic news from last week, including industrial production figures for the US, Eurozone & Japan, retail sales numbers for the US & China, and the Bank of England’s latest rate hike.

In the US, February retail sales rose 0.3% m/m, slightly below estimates. February industrial production expanded 0.5% m/m, in line with expectations, while manufacturing production increased 1.2% m/m, above the consensus forecast. The Conference Board’s Leading Economic Index rose 0.3% m/m in February. The Fed raised its fed funds rate by 25 basis points to a target range of 0.25 – 0.50%, its first rate increase since 2018. While the announcement garnered many headlines, the Fed had been telegraphing this move for months and markets appeared unfazed by the announcement. As we’ve detailed before, historical evidence shows global stocks usually perform well during the early stages of rate hikes. For more commentary, please see our 3/16/2022 article, “The Big Fed News That Surprised Next to No One.”

In the eurozone, January industrial production was flat m/m but fell 1.3% y/y—both below expectations. February core consumer prices (excluding food and energy) rose 5.9% y/y, slightly above estimates. In the UK, the unemployment rate dropped to 3.9% for the three months ending in January. The Bank of England (BOE) raised its main Bank Rate 25 basis points to 0.75% amid continued inflation concerns. This marks the third BoE rate hike since December 2021.

In Japan, February core-core consumer prices (excluding fresh food and energy) fell 1.0% y/y. Final January industrial production declined 0.8% m/m and 0.5% y/y, less than expected. Preliminary February exports and imports rose 19.1% y/y and 34.0% y/y. The Bank of Japan left monetary policy unchanged. In China, January-February retail sales rose 6.7% y/y, well ahead of expectations. January-February industrial production increased to 7.5% y/y, above the consensus forecast. The February unemployment rate rose to 5.5%, slightly higher than expected.

The Week Ahead:

The US, UK, eurozone and Japan report preliminary March purchasing managers’ indexes (PMIs). The US releases February new home sales, durable goods orders and unemployment data. The UK posts February retail sales and inflation data. The eurozone announces February lending and money supply (M3) 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 the maximum rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.

iSources: Eagle PACE, FactSet, Bloomberg. Fisher Global Total Return results are preliminary and unaudited. They approximate our Private Client Group’s 100% global equity composite for the week ending 3/18/2022. Returns are calculated using representative portfolio performance. This representative portfolio information is derived from actual client portfolio returns net of fees. Fees are approximated by applying a 1% annual fee rate weekly. Individual account returns will vary. Specifically, other clients’ portfolio performance may differ given the various investment restrictions, cash requirements and other circumstances that can apply to particular clients. You can request returns for your specific account from your Investment Counselor.