Weekly Wrap-Up

Last Week In Markets: May 09 - May 13 2022

Fisher Investments recaps the biggest market, political and economic news from last week, including April US inflation data, eurozone March industrial production and the first estimate of UK Q1 2022 GDP.

In the US, April consumer prices rose 8.3% y/y and 0.3% m/m, higher than expected but decelerating from March. April core consumer prices (excluding food and energy) rose 6.2% y/y and 0.6% m/m, also exceeding estimates. Month over month inflation data may still bounce around as Russia’s war in Ukraine continues to disrupt commodity markets and China’s COVID lockdowns exacerbate supply chain pains. Given these factors, we think it is impossible to know when and how high the inflation rate will peak, but we continue to expect inflation will eventually decelerate as the economy normalizes away from COVID-driven consumption patterns and supply-chain bottlenecks ease. For more, please see our 5/11/2022 commentary, “Our Counsel After April's CPI Slowdown.”

In the eurozone, data were light. March industrial production fell 0.8% y/y, less than expected. In the UK, the first estimate of Q1 2022 GDP showed 8.7% y/y and 0.8% q/q expansion. March industrial and manufacturing production rose 0.7% y/y and 1.9% y/y, respectively.

In Japan, the April Jibun Bank Services Purchasing Managers’ Index was revised higher to 50.7 (readings over 50 indicate expansion). April bank lending increased 0.9% y/y. The Conference Board’s Leading Economic Index (LEI) decreased 0.6% in March relative to the prior month. Money supply (M2) grew 3.6% y/y in April. In China, consumer prices increased 2.1% y/y in April, above estimates. April exports increased 3.9% y/y while imports remained unchanged relative to the prior year. April outstanding loan growth and money supply (M2) increased 10.6% y/y and 10.5% y/y, respectively.

The Week Ahead:

The US reports April industrial and manufacturing production. The US, UK and China release April retail sales while Japan reports March retail sales. The UK, eurozone and Japan announce April inflation data. The eurozone posts its second estimate of Q1 2022 GDP and March employment figures. Japan releases its first estimate of Q1 2022 GDP, March industrial production and April trade data.