Fisher Investments recaps the biggest market, political and economic news from last week, including US retail sales, eurozone consumer prices and Japanese lending.
Global markets fell amid trade-focused headlines. US economic data were mixed. April retail sales declined 0.2% m/m, but increased 3.1% y/y. Industrial production declined 0.5% m/m, but grew 0.9% y/y. The Conference Board’s Leading Economic Index (LEI) increased 0.2% m/m in April. Headlines remained focused on US-China trade tensions, as Chinese officials announced Monday they would increase tariffs to 25% on $60 billion worth of US goods. While the announcement drove some market volatility, even accounting for recent tariff increases—and threats of future increases—the total impact still likely lacks the necessary scale to derail the current bull market. For more, please see our 5/13/2019 commentary, “The Tariff Tango’s Latest Moves.”
In the eurozone, March industrial production declined 0.6% y/y, beating expectations. Consumer prices increased to 1.7% y/y, while core consumer prices (excluding energy, food, alcohol and tobacco) increased to 1.3% y/y. The second estimate of Q1 2019 GDP remained unchanged at 1.2% y/y. In March, imports increased 6% y/y and exports increased 3.1% y/y. In the UK, the March unemployment rate dropped to 3.8%—the lowest level since 1974.
In Japan, bank lending increased 2.4% y/y in April, slightly ahead of expectations. Japan’s LEI decreased from 97.1 in February to 96.3 in March. In China, April retail sales grew 7.2% y/y, missing the consensus forecast. Meanwhile, industrial production expanded 5.4% y/y in April, also missing expectations.
The Week Ahead:
The US and eurozone report flash May Markit manufacturing and services Purchasing Managers’ Indexes (PMIs). The UK posts April inflation and retail sales figures. Japan announces March industrial production, April trade and inflation data, and preliminary Q1 2019 GDP.
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.