Global stocks closed lower this week. A US House of Representatives vote on the American Health Care Act was cancelled twice, leaving the status quo intact—a shining example of just how gridlocked the beltway continues to be. US economic data remained broadly positive. Markit’s preliminary March Purchasing Manager’s Index (PMI) expanded in services and manufacturing, though at a slower rate compared to recent months and behind expectations. Existing home sales declined 3.7% m/m in February, while home prices were unchanged. February new home sales increased 6.1% m/m, trouncing expectations, as warmer weather likely allowed for more construction-site visits. February preliminary durable goods orders rose more than forecast, indicating broadening industrial production and capital spending—signs of an expanding economy.
Overseas, economic data were positive. Eurozone March Flash PMIs beat forecasts and accelerated across most major categories, with French and German Services PMIs at multi-year highs. The UK’s February Consumer Price Index (CPI) rose 2.3% y/y. Core CPI, excluding food and energy, rose 2.0% y/y, slightly higher than expected. UK February retail sales returned to growth rising 1.4% m/m—evidence that fears of rising inflation were likely overblown. January UK housing prices increased 6.2% y/y.
Economic data in Asia were light, though positive overall. In Japan, February trade data showed robust export volumes growth of 11.3% y/y. In China, the Conference Board’s Leading Economic Index increased 1.2% in February, following a 0.9% rise in January.
The first quarter of the year comes to an end. The US reports its final Q4 2016 GDP revision and February retail and wholesale inventories. The eurozone releases February money supply and March CPI. In the UK, Prime Minister Theresa May is expected to formally trigger the start of Brexit negotiations. Japan releases February retail sales, CPI, jobless rate, household spending and industrial output.
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.