Fisher Investments recaps the biggest market, political and economic news from last week, including US, UK, eurozone, Chinese and Japanese September Purchasing Managers’ Index (PMI) readings, UK August industrial production figures and US August trade data.
Global equities rose amid ongoing US government stimulus negotiations and the US vice presidential debate.
In the US, data were mostly positive. The September Markit Services Purchasing Managers’ Index (PMI) decreased slightly to 54.6 (readings over 50 indicate expansion). The September ISM Non-Manufacturing PMI rose to 57.8, beating expectations. Initial jobless claims rose by 840,000 in the week ending October 3, more than forecast. August exports and imports rose 2.2% m/m and 3.2% m/m, respectively. On Monday evening, President Trump returned to the White House after receiving medical care for COVID-19 at Walter Reed Medical Center since Friday. On Wednesday, Vice President Mike Pence and Senator Kamala Harris participated in their only debate before the election. Unsurprisingly, the debate provided little additional insight into the potential winner of the upcoming election as both candidates mostly appealed to their existing bases. We caution investors against reading too much into political debates to predict the election’s outcome or how it might impact markets. For more, please see our 10/8/2020 commentary, “Our Notes on the Vice Presidential Debate.”
In the eurozone, August retail sales rose 4.4% m/m and 3.7% y/y, both exceeding expectations. The September Markit Services PMI came in at 48.0, slightly better than consensus forecasts but still indicating contraction. In the UK, August industrial production decreased 6.4% y/y, missing consensus estimates. August manufacturing production contracted 8.4% y/y. The Markit/CIPS Services PMI was revised up to 56.1 from the initial estimate of 55.1.
In Japan, the preliminary reading of the August Leading Economic Index increased 2.4% m/m. The September Jibun Bank Services PMI modestly increased to 46.9. In China, the September Caixin Services PMI rose more than expected to 54.8.
The Week Ahead:
The US releases September industrial production and retail sales figures. The eurozone reports August industrial production and trade data, as well as September consumer prices. The UK announces August unemployment data. China posts September loan growth, inflation and trade data. Japan reports August industrial production and September money supply (M2).
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.