Weekly Wrap-Up

Last Week In Markets: May 25 - May 29, 2020

Fisher Investments recaps the biggest market, political and economic news from last week, including the second estimate of US Q1 2020 GDP, eurozone money supply growth and Japan’s April unemployment rate.

Global markets rose. Data releases were light but continue to reflect the economic contraction created by business lockdowns and restrictions. In our view, negative data reports may persist for some time, but stocks generally improve before economic data. For more, please see Ken Fisher’s 05/26/2020 article Clarity Is a Very Costly Word. Stocks Never Wait For It.

In the US, the second estimate of Q1 2020 GDP showed a 5.0% annualized contraction, revised down and slightly worse than forecasts. April durable goods orders fell 17.2% m/m, however, excluding transportation-related orders they fell 7.4% m/m, with both data releases beating estimates. April new home sales were better than expected at 623,000, a slight uptick from March. Preliminary estimates for April core capital goods orders showed a 5.8% m/m decline.

European data were light. Money supply (M3) grew 8.3% y/y in April, while core consumer prices (excluding food and energy) rose 0.9% y/y.

In Japan, April data continued to reflect weakness. Retail sales fell 13.7% y/y. Industrial production declined 9.1% m/m, worse than expected. Housing starts declined 12.9% y/y. Imports and exports fell 7.1% y/y and 21.9% y/y respectively, as imports beat expectations and exports missed. The unemployment rate rose slightly to 2.6%.

The Week Ahead:

The US, eurozone, UK, Japan and China all release revised May Purchasing Managers’ Indexes. The US releases revised April durable goods orders and May unemployment data. The UK releases May money supply data, while the eurozone announces April retail sales and unemployment data. Japan releases its preliminary estimate for April LEI.

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.