Weekly Wrap-Up

Last Week In Markets: Oct 29 - Nov 2, 2018

Fisher Investments recaps the biggest market, political and economic news from last week, including US PMIs, eurozone GDP releases and Japanese trade data.

Global equities rose ahead of upcoming midterm elections. As we have mentioned before, while political rhetoric often heightens in the run up to election day, we believe the most likely outcome remains gridlock—bullish for stocks. In the US, economic data were mostly positive. Markit and ISM October manufacturing Purchasing Managers’ Indexes (PMIs) indicated expansion at 55.7 and 57.7, but missed expectations. September durable goods orders rose 0.7% m/m, below consensus estimates. Nonfarm payrolls grew in October, adding 250,000 jobs—more than forecast and a larger expansion than in September. The October unemployment rate remained steady at 3.7%.

In the eurozone, the first estimate of Q3 2018 GDP showed 1.7% y/y growth, slightly missing expectations. The final reading of the October Markit manufacturing PMI came in at 52.0, below estimates but still indicating growth. The September unemployment rate was unchanged at 8.1%. In the UK, October Markit/CIPS manufacturing and construction PMIs came in at 51.1 and 53.2, missing and beating expectations respectively. The Bank of England left interest rates unchanged.

In Japan, the final October Nikkei manufacturing PMI decreased to 52.9, less than expected. September preliminary retail sales rose higher than forecast, increasing 2.1% y/y, while the initial reading of September industrial production fell 2.9% y/y, more than consensus expectations. September imports increased 7.0% y/y and exports decreased 1.3% y/y. The September unemployment rate declined to 2.3%. The Bank of Japan left monetary policy unchanged. In China, the October Markit/Caixin manufacturing PMI rose to 50.1—slightly higher than estimates. Official manufacturing and non-manufacturing PMIs both fell slightly to 50.2 and 53.9, respectively—missing estimates.

The Week Ahead:

The US votes in midterm elections on Tuesday. We will have updated commentary on www.fisherinvestments.com/en-us/marketminder/ as news develops. In terms of economic data, the US reports October services PMIs and the Fed meets to determine monetary policy. The eurozone announces October services PMI and September retail sales. The UK posts the first estimate of Q3 2018 GDP, September industrial production and trade data. Japan releases the October services PMI, bank lending and September household spending. China reports the October services PMI, trade and inflation figures.

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.