Weekly Wrap-Up

Last Week In Markets: Nov 18 - Nov 22, 2019

Fisher Investments recaps the biggest market, political and economic news from last week, including US LEI data, eurozone PMI releases and Japanese inflation numbers.

Global equities fell amid mixed economic reports. In the US, economic data were light. The Conference Board’s Leading Economic Index (LEI) declined 0.1% m/m in October, in line with consensus. While US LEI has been roughly flat over the last year, we believe this reflects a mid-cycle slowdown similar to 2015-2016. The preliminary November Markit Manufacturing and Services Purchasing Managers’ Indexes (PMIs) rose to 52.2 and 51.6, respectively. Meanwhile, the preliminary Markit Composite PMI for November came in at 51.9, beating expectations. PMIs are monthly business surveys that track economic activity across various sectors. Responding firms report whether their activity rose or fell that month. PMI readings above 50 mean a majority of those surveyed reported higher activity while readings under 50 mean more firms saw activity fall. Similar to LEI, while PMIs are useful snapshots of how the economy is doing, it’s important to focus on broader trends and not any single month’s reading. For example, the JP Morgan Global Composite PMI has remained indicating expansion over the last couple years.

In the eurozone, November’s preliminary Markit Manufacturing PMI rose to 46.6, higher than expected, while the preliminary Markit Services PMI fell to 51.5, lower than forecasted. The eurozone preliminary Markit Composite PMI came in at 50.3 in November, below forecasts. In the UK, the November Markit/CIPS Manufacturing and Services PMIs fell to 48.3 and 48.6, respectively—both missing estimates. Similarly, the UK’s preliminary Composite PMI fell to 48.5 in November.

In Asia, Japan’s preliminary November Markit/Jibun Bank Services and Manufacturing PMIs rose to 50.4 and 48.6, respectively. The preliminary November Composite PMI came in at 49.9, beating expectations. October core-core consumer prices (excluding energy and food) rose 0.7% y/y, more than expected. October imports and exports fell 14.8% y/y and 9.2% y/y respectively, with imports falling less than forecasted while exports fell more than consensus estimates.

The Week Ahead:

The US releases the second estimate of Q3 2019 GDP growth and October preliminary durable orders. In the eurozone, data reports include November core consumer prices and October unemployment rate while the UK releases October money supply figures. Japanese releases include the September Leading Economic Index (LEI), trade data, unemployment rate, retail sales and industrial production 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.