Global stocks were modestly lower for the week.
Politics dominated headlines, particularly in France as Emmanuel Macron won the final round of presidential elections. Polls and odds-makers proved more accurate in France than elsewhere, as Macron’s victory was widely expected—markets shrugged. French legislative elections in mid-June will determine if Macron’s En Marche party secures a majority or must form a coalition. Regardless of the outcome, we expect falling uncertainty to continue bolstering markets, as investors begin to focus on the continent’s underappreciated economic strength.
In the US, media focused on President Trump’s firing of FBI Director James Comey. Despite rampant speculation about broader ramifications, our focus is solely on potential capital market impacts—and right now, we see few. If Comey’s firing results in temporarily sidelining President Trump’s legislative agenda, markets are unlikely to flinch. We continue to view this year’s market strength as less about Trump’s agenda and more about improving global economic fundamentals. For additional analysis on Comey’s dismissal, see our MarketMinder.com commentary here. US economic data updates were sparse, but mostly positive. April US consumer prices rose 0.2% m/m, rebounding from March and matching estimates. April producer prices accelerated to 0.5% m/m, ahead of expectations. April retail sales rebounded to 0.4% m/m, just shy of the 0.6% m/m expectation.
In Europe, preliminary German Q1 2017 GDP matched estimates for a 0.6% q/q gain. March German exports modestly beat analyst expectations, rising 0.4% m/m. March German industrial production grew 1.9% y/y. Eurozone industrial production also grew 1.9% y/y in March, though slightly missing forecasts.
April Chinese trade figures showed exports growing 8.0% y/y, short of the 12.0% forecast. Banking data showed April loan growth expanded 12.9% y/y, ahead of expectations. March Australian retail sales declined 0.1% m/m, missing expectations for 0.4% growth.
The US reports April industrial production and housing starts. Japan and Italy release preliminary Q1 2017 GDP figures. The UK posts April retail sales and inflation data. For more updates on market events, please visit www.MarketMinder.com.
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 a Luxembourg tax basis. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.