Fisher Investments recaps the biggest market, political and economic news from last week, including US-China trade negotiations, eurozone retail sales and UK GDP.
Global markets fell amid renewed US-China trade concerns. US economic data releases were light. In April, consumer prices increased 2.0% y/y, just shy of expectations, while core consumer prices (excluding food and energy) rose 2.1% y/y—in line with estimates. On Friday, the US increased the tariff rate from 10% to 25% on $200 billion worth of Chinese imports. While trade fears likely weighed on markets, current tariff levels—even including this week’s increase—are simply too small to render material harm to the global, US or Chinese economies. For more, please see our 5/6/2019 commentary, "Some Perspective on Trump’s Trade Tweeting."
In the eurozone, the final April Markit services Purchasing Managers’ Index (PMI) ticked down to 52.8 (readings over 50 indicate expansion). March retail sales grew 1.9% y/y, in-line with the consensus forecast. In the UK, the first estimate of Q1 2019 GDP showed 1.8% y/y growth, matching expectations. March industrial and manufacturing production increased 1.3% y/y and 2.6% y/y, respectively—both ahead of forecasts. March export and import values rose 2.7% m/m and 1.1% m/m, respectively.
In Asia, Japan’s Nikkei manufacturing and services PMIs came in at 50.2 and 51.8, respectively—both beating estimates. In China, April consumer prices rose 2.5% y/y. April import values increased 4.0% y/y and export values fell 2.7% y/y. The April Caixin services PMI rose to 54.5, higher than forecast.
The Week Ahead:
The US reports April retail sales, industrial production and the Conference Board’s Leading Economic Index. The eurozone posts March industrial production, April inflation and the second estimate of Q1 2019 GDP. Japan releases April bank lending and March retail sales. China announces April retail sales and industrial production.
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.