Weekly Wrap-Up

Last Week In Markets: Oct 21 - Oct 25, 2019

Fisher Investments recaps the biggest market, political and economic news from last week, including US, eurozone and Japanese October Flash PMIs, as well as Japanese trade data.

Global equities rose 1.3% amid sparse economic data releases and further Brexit developments. In the US, data were light. The October Markit Manufacturing and Services Flash Purchasing Managers’ Indexes (PMIs) rose to 51.5 and 51.0, respectively—with manufacturing slightly beating forecasts and services matching estimates. PMI readings above 50 indicate expansion. September durable goods orders fell 1.1% m/m, missing expectations.

In the eurozone, the October Markit Manufacturing Flash PMI remained unchanged at 45.7, below estimates, while the Services Flash PMI rose to 51.8, slightly missing the consensus. On Thursday, the European Central Bank decided to keep interest rates unchanged. In the UK, Parliament voted to support the Brexit withdrawal agreement negotiated by UK Prime Minister Boris Johnson and the EU, but rejected his proposal to expedite the approval process—putting the deal on pause for now. Once again, uncertainty prevails for the time being and multiple outcomes remain possible. For more, please see our 10/22/2019 commentary, “Today in Brexit, Day 1,215.”

In Asia, Japan’s September exports fell 5.2% y/y, missing expectations while imports fell 1.5% y/y, beating the consensus. The October Markit/Jibun Bank Manufacturing and Services Flash PMIs came in at 48.5 and 50.3, respectively. Meanwhile, the final reading of the Conference Board’s August Leading Economic Index fell to 91.9, less than originally expected.

The Week Ahead:

The US releases Q3 2019 GDP growth and October manufacturing PMIs. The eurozone announces preliminary Q3 2019 GDP growth. The UK posts its October manufacturing PMI. Expect more Brexit news as the UK Parliament likely votes on whether to schedule a general election in December. Additionally, the EU is expected to respond to the UK’s request for a Brexit deadline extension. Japan reports its final September retail sales, trade data and October consumer prices. China releases its October manufacturing and non-manufacturing PMIs. The Federal Reserve and Bank of Japan meet to set their respective monetary policies.

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.