Fisher Investments recaps the biggest market, political and economic news from last week, including US industrial and manufacturing production figures, eurozone inflation data and Japanese trade data.
In the US, February manufacturing and industrial production were lower than expected, declining 4.1% y/y and 4.2% y/y, respectively. February retail sales rose 6.3% y/y, more than forecast, but fell 3.0% m/m, missing expectations. The Conference Board’s February Leading Economic Index (LEI) increased 0.2% m/m, lower than consensus estimates. On Wednesday, The Federal Reserve raised its economic growth forecast for 2021 but left interest rates and its quantitative easing program unchanged, as expected.
In the UK, the Bank of England left interest rates unchanged, in line with expectations. In the eurozone, February core consumer prices (excluding energy, food, alcohol and tobacco) rose 1.1% y/y, in line with expectations. January imports and exports declined 14.1% y/y and 11.4% y/y, respectively. The 2021 general election for the Dutch House of Representatives wrapped up Wednesday, with results setting the stage for what is likely to be another multiparty coalition government unable to enact major legislation—a positive for stocks in our view. Additionally, Germany’s local elections concluded Sunday without any party emerging with a big majority—potentially foreshadowing another do-little coalition resulting from the upcoming fall federal elections. For more, please see our 3/19/2021 commentary, “This Week in European Politics.”
In Japan, January industrial production fell 5.2% y/y but increased 4.3% m/m—both modestly exceeding expectations. January retail sales fell 2.4% y/y, in line with forecasts. February imports rose 11.8% y/y while exports fell 4.5% y/y. February core-core consumer prices (excluding food and energy) rose 0.2% y/y. The Bank of Japan left short-term interest rates unchanged at -0.1%. In China, January-February retail sales and industrial production surged to 33.8% y/y and 35.1% y/y, respectively—both higher than consensus estimates. January-February unemployment rose to 5.5%.
The Week Ahead:
The US, UK, eurozone and Japan release March flash purchasing managers’ indexes (PMIs). The US reports its third estimate of Q4 2020 GDP. The UK announces January unemployment figures, February retail sales and February consumer price data. The eurozone reports February money supply (M3) growth. Japan releases January LEI data.
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.