Fisher Investments recaps the biggest market, political and economic news from last week, including US, UK, eurozone, Japanese and Chinese Manufacturing and Services PMIs, the US May unemployment rate and eurozone April retail sales.
In the US, the final May S&P Global Manufacturing and Services Purchasing Managers’ Indexes (PMIs) came in at 57.0 and 53.4, respectively. PMI readings over 50 indicate expansion. The May unemployment rate held steady at 3.6%. May nonfarm payrolls grew by 390,000, surpassing estimates but decreasing from April’s 436,000.
In the eurozone, May flash core consumer prices (excluding energy, food, alcohol and tobacco) rose 3.8% y/y. The final May S&P Global Eurozone Manufacturing and Services PMIs were 54.6 and 56.1, respectively. April unemployment remained unchanged at a record low of 6.8%. April retail sales fell 1.3% m/m but rose 3.9% y/y. In the UK, data were light. The final May S&P Global/CIPS UK Manufacturing PMI was 54.6—meeting expectations.
In Japan, the final May Jibun Bank Manufacturing and Services PMIs came in at 53.3 and 52.6, respectively. Preliminary April industrial production fell 1.3% m/m and 4.8% y/y. April retail sales grew 0.8% m/m and 2.9% y/y. The April unemployment rate fell slightly to 2.5%. In China, the May Caixin Manufacturing PMI came in at 48.1. The rates of decline in Chinese PMIs have eased significantly from April, but they still don’t point to growth. In our view, China starting to lift COVID lockdowns, coupled with modest fiscal and monetary support, should sufficiently prime the pump for a decent rebound and full-year economic growth. For more, please see our 5/31/2022 commentary, “China Resumes Reopening.”
The Week Ahead:
The US and China report May inflation. The US and China also announce April and May trade data, respectively. The UK releases April industrial and manufacturing production figures. The eurozone posts its third estimate of Q1 2022 GDP and the European Central Bank (ECB) meets to set monetary policy. Japan announces its second estimate of Q1 2022 GDP, May bank lending and its preliminary April Leading Economic Index (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.