Weekly Wrap-Up

Last Week In Markets: Mar 26 - 30, 2018

Fisher Investments recaps the biggest market, political and economic news from last week, including US economic data releases, eurozone lending and Japanese retail sales.

In another volatile week, global equities rose 1.5%. Trade war fears continued, and Technology companies dominated headlines with the media speculating over possible increased regulation. In our view, this all closely resembles the traits of a typical bull market correction rather than the onset of a new bear. The impact and timing of potential new regulations on Tech companies—if any materialize at all—is guesswork at this point. In our view, big growth oriented Technology firms should soon resume their upward climb as this bull market continues and the noise clears—benefiting from powerful global trends of rising demand for online products, cloud-computing services, growing enterprise spending and mobile usage.

In the US, the third estimate of Q4 2017 GDP was revised up from 2.5% to 2.9% annualized, beating expectations. Personal consumption expenditures and private investment contributed to the upward revision. Earnings season concluded as all S&P 500 firms have now reported Q4 2017 results—earnings and revenues grew 15.0% y/y and 8.2% y/y, respectively. Additionally, 74% of companies beat earnings targets and 77% beat revenue estimates. The latter is the highest percentage of companies reporting positive revenue surprises since tracking the figure began in 2008.

Eurozone and UK data were mixed. In the eurozone, lending to non-financial corporations grew 3.1% y/y in February—slower than January’s 3.4% rate but still indicating expanding access to capital. February household lending grew 2.9% y/y, slightly below forecasts. In the UK, the third estimate of Q4 2017 GDP confirmed 1.4% y/y growth. Despite Brexit hand-wringing, the UK economy has expanded every quarter since the June 2016 Brexit vote. In Asia, Japan’s February retail sales rose 0.4% m/m and 1.6% y/y.

The Week Ahead:

The US releases March manufacturing and services Purchasing Managers’ Indexes (PMIs), non-farm payrolls, the unemployment rate and February trade data. The eurozone reports March manufacturing and services PMIs and inflation data as well as the February unemployment rate and retail sales. The UK and China announce March manufacturing and non-manufacturing PMIs. Japan releases the March Nikkei services PMI.

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.