Weekly Wrap-Up

Last Week In Markets: Nov 13 - Nov 17, 2017

Fisher Investments recaps the biggest market, political and economic news from last week, including US tax reform, eurozone economic releases, Japanese GDP data and Chinese industrial production.

Global stocks fell -0.1% amid generally positive economic data.

US economic data were generally positive. October industrial production accelerated to 0.9% m/m, better than expected, and September’s report was revised upward to 0.4% m/m. October retail sales increased 0.2% m/m, slightly ahead of forecasts. October core consumer prices (excluding energy and food) rose 1.8% y/y. On Thursday, the Republican-controlled US House of Representatives passed its tax reform bill, the Tax Cuts and Jobs Act. Meanwhile, the Senate Finance Committee approved a version of the Senate’s tax reform bill. The full Senate is expected to vote on its version after Thanksgiving week. A final bill, if the legislative process makes it that far, could be significantly altered during the full Senate debate or the reconciliation process between the Senate and House versions.

Eurozone data was likewise positive. The second estimate of Q3 2017 GDP confirmed a 2.5% annualized growth rate—the 18th consecutive quarter of growth. September industrial production fell 0.6% m/m but increased 3.3% y/y. October core consumer prices (excluding energy, food, alcohol and tobacco) rose 0.9% y/y. September export and import values rose 5.6% y/y and 5.1% y/y, respectively. In the UK, October core consumer prices (excluding energy and food) rose 2.7% y/y. October retail sales fell 0.3% y/y, the first year-over-year contraction in four years. The September unemployment rate held steady at 4.3%. For additional commentary on the UK economy, please see our 11/17/2017 MarketMinder.com article “How to Break the Brexit Blues.”

In Japan, preliminary estimates indicate Q3 2017 GDP grew at a 1.4% annualized rate. Domestic factors such as consumption and government spending contracted, but were offset by strong export growth. September industrial production fell 1.0% m/m but increased 2.6% y/y—both slightly beating estimates. In China, October industrial production and retail sales rose 6.2% y/y and 10.0% y/y, respectively—both slightly below forecasts.

The Week Ahead:

Economic data reports will be light in the US holiday-shortened week. The US reports October durable goods orders. The eurozone posts November Markit Flash Purchasing Managers’ Indexes (PMIs). Japan releases the second estimate of September’s Leading Economic Index (LEI) and 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 a Luxembourg tax basis. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.