Weekly Wrap-Up

Last Week In Markets: Nov 09 - Nov 13 2020

Fisher Investments recaps the biggest market, political and economic news from last week, including eurozone and UK Q3 GDP figures, Chinese and Japanese money supply (M2) and Japan’s September retail sales.

Global equities rose amid increased clarity on the US election results. On Saturday, the Associated Press and most other media outlets called the presidential race for former Vice President Joe Biden. More drama likely awaits between Senate runoff elections, state recounts, court challenges and the Electoral College process. However, what is clear is there was no landslide either way and it looks like gridlock will ultimately win the day. We believe this increasing clarity is a bullish relief for markets. For more election-related commentary, please see our 11/09/2020 article, “Biden Gets the Call, Investors Get Falling Uncertainty.”

In the US, data were sparse. October core consumer prices (excluding food and energy) rose 1.6% y/y, decelerating from September’s 1.7% y/y increase. Initial jobless claims declined to 709,000 in the week ending November 7, lower than expected. Some fret over slowing improvements in weekly jobless claims and rising long-term unemployment. However, jobs data are backward-looking and recent trends appear in-line with other historical recoveries. For more, please see our 11/13/2020 commentary, “Slowing Jobs Growth Won’t Derail a Recovery.” 

In the eurozone, the second estimate of Q3 2020 GDP showed 12.6% q/q growth, slightly below expectations but still rebounding significantly from Q2’s -11.8% q/q contraction. September industrial production declined 0.4% m/m and 6.8% y/y, both missing estimates. September exports and imports fell 3.1% y/y and 7.1% y/y, respectively. In the UK, preliminary Q3 2020 GDP rose 15.5% q/q, closely in line with forecasts. September industrial production increased 0.5% m/m but fell 6.3% y/y. The September unemployment rate increased to 4.8%, in line with estimates.

In China, October consumer prices increased 0.5% y/y, below the consensus forecast. October outstanding loans grew 12.9% y/y while money supply (M2) increased 10.5% y/y. October imports and exports rose 4.7% y/y and 11.4% y/y, respectively. In Japan, final September retail sales declined 8.7% y/y, matching expectations. Preliminary October money supply (M2) increased 9.0% y/y, slightly below consensus estimates. October total bank lending rose 6.2% y/y, above market expectations.

The Week Ahead

US releases include the Conference Board’s October Leading Economic Index, October retail sales and October industrial production data. The eurozone reports October core consumer prices. The UK posts October core consumer prices and retail sales figures. Japan releases preliminary Q3 2020 GDP, October core consumer prices, October trade data and preliminary November purchasing mangers’ indexes. China reports October retail sales, industrial production and unemployment 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.