Fisher Investments recaps the biggest market, political and economic news from last week, including eurozone retail sales for September, UK October Markit/CIPS Manufacturing and Services PMIs, and the US beginning to taper its quantitative easing (QE) bond purchases later this month.
In the US, the final October Markit Manufacturing Purchasing Managers’ Index (PMI) was revised lower to 58.4 while the final October Markit Services PMI was revised higher to 58.7. Readings above 50 indicate expansion. September final durable goods orders fell 0.3% m/m, less than the preliminary reading showing a 0.4% m/m decline. October nonfarm payrolls increased by 531,000, more than the 450,000 consensus estimate. The October unemployment rate fell to 4.6%, slightly better than expected. On Wednesday, the US Federal Reserve announced it will begin tapering its quantitative easing (QE) bond purchases later this month. We believe the markets’ non-reaction to the Fed announcement is a lesson in how markets pre-price widely expected events, including monetary policy decisions. Ultimately, we view this well-telegraphed Fed move as an incremental positive for the economy. For more, please see our 11/03/2021 commentary, “The Decidedly Non-Tantrum-Inducing Fed Taper Is Here.”
In the eurozone, the final October Markit Manufacturing and Services PMIs were 58.3 and 54.6, respectively. September retail sales rose 2.5% y/y, exceeding expectations. In the UK, the final October Markit/CIPS Manufacturing and Services PMIs were 57.8 and 59.1, respectively, modestly ahead of estimates.
In Japan, the final October Jibun Bank Manufacturing PMI was revised slightly higher to 53.2 from the preliminary reading of 53.0. In China, the October Caixin Manufacturing and Services PMIs were 50.6 and 53.8, respectively.
The Week Ahead:
The US and China releases October inflation data. The UK and eurozone post September industrial production activity. The UK reports its first estimate of Q3 2021 GDP. China and Japan release October bank lending and money supply figures. China also reports October 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.