Weekly Wrap-Up

Last Week In Markets: Oct 25 - Oct 29 2021

Fisher Investments recaps the biggest market, political and economic news from last week, including US and eurozone Q3 2021 GDP, US durable goods orders and Japanese industrial production and retail sales figures.

In the US, preliminary September durable goods orders fell 0.4% m/m, less than forecast. The first estimate of Q3 2021 GDP growth was 2.0% annualized, below consensus estimates. Many headlines blamed logistics problems and the Delta variant for slowing growth. While supply chain issues demonstrably knocked growth, we don’t see much evidence that Delta took a toll. Ultimately, stocks look forward, not backward—and GDP data is backward-looking. In our view, over the next 3 to 30 months, pre-pandemic growth rates will probably prevail once the supply chain wrinkles iron out. Slow but steady GDP growth was fine for stocks before the pandemic and we believe the same should be true ahead. For more, please see our 10/28/2021 commentary, “What Markets Are Eyeing Beyond Q3 GDP.”

In the eurozone, the first estimate of Q3 2021 GDP showed 3.7% y/y growth, better than expected. September money supply (M3) grew 7.4% y/y, slightly less than forecast. The European Central Bank left monetary policy unchanged.

In Japan, preliminary September retail sales fell 0.6% y/y, better than expected. Preliminary September industrial production fell 5.4% m/m and 2.3% y/y, respectively—both missing expectations. The September unemployment rate held steady at 2.8%, in line with forecasts. The Bank of Japan left monetary policy unchanged.

The Week Ahead:

The US, UK, eurozone, China and Japan announce October Purchasing Managers’ Index (PMI) readings. The US also releases October unemployment data and September durable goods orders. The eurozone reports September retail sales figures. The Federal Reserve and the Bank of England 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.