Fisher Investments recaps the biggest market, political and economic news from last week, including US LEI data, US and UK retail sales and Japanese GDP.
In the US, the Conference Board’s Leading Economic Index declined 0.3% m/m, missing estimates. April retail sales rose 8.2% y/y and 0.9% m/m, both beating expectations. April industrial and manufacturing production increased 1.1% m/m and 0.8% m/m, respectively—both more than expected. Overall, we think industrial production’s ongoing strength augurs well for inflation. That increased output may not show up immediately in prices, but as supply catches up with demand, it should help prices stabilize or rise more slowly—likely reducing the inflation rate to a more manageable pace. For more, please see our 5/17/2022 commentary, “A Loose CheckIn on Supply and Demand in the US Economy.”
In the eurozone, the second estimate of Q1 2022 GDP showed 5.1% y/y and 0.3% q/q growth, both higher than the consensus estimates. April core-consumer prices (excluding energy, food, alcohol and tobacco) rose 3.5% y/y, in line with expectations. In the UK, April retail sales decreased 4.9% y/y but increased 1.4% m/m, both beating expectations. April core-consumer prices (excluding energy and food) rose 6.2% y/y and 0.7% m/m.
In Japan, the first estimate of Q1 2022 GDP showed a 0.2% q/q contraction, slightly better than expected. April core-core consumer prices (excluding fresh food and energy) rose 0.8% m/m. Preliminary April imports and exports rose 28.2% y/y and 12.5% y/y, respectively—below consensus forecasts. April industrial production figures were in line with expectations at -1.7% y/y and 0.3% m/m. In China, April industrial production declined 2.9% y/y, below estimates, and April retail sales fell 11.1% y/y amid continued COVID-19 lockdowns.
The Week Ahead:
The US releases its second Q1 2022 GDP estimate, April durable goods orders and April new home sales figures. The US, UK, eurozone and Japan report initial May purchasing managers’ index readings. The eurozone releases M3 money supply. Japan announces final April trade 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.