Weekly Wrap-Up

Last Week In Markets: Oct 8 - Oct 12, 2018

Fisher Investments recaps the biggest market, political and economic news from last week, including US inflation, eurozone industrial production and Chinese PMI releases.

Global equities fell as volatility resurfaced. Many attribute recent market action to rehashed concerns over US-China trade relations or rising interest rates. As we have said before, we believe these fears are overblown. In our view, the best prescription during volatile times is to stay patient and avoid making knee-jerk decisions that often lead to investment mistakes. For additional commentary, please see our 10/10/2018 MarketMinder column, “A Time to Reflect, Not a Time to Run.” US economic data were sparse. September core consumer prices (excluding food and energy) rose 0.1% m/m and 2.2% y/y—both slightly lower than estimates. August wholesale inventories increased 1.0% m/m, higher than the 0.8% m/m forecast.

In the eurozone, industrial production rose 0.9% y/y in August—beating estimates. In the UK, August industrial and manufacturing production both rose 1.3% y/y—both more than expected. August export and import values increased 1.1% m/m and 2.4% m/m, respectively. August construction output grew 0.3% y/y, well below the market estimate for 1.4% y/y growth.

In Asia, economic releases were mostly positive. In Japan, September bank lending increased 2.3% y/y, higher than the 2.1% y/y forecast. In China, the September Markit/Caixin services PMI, which captures smaller businesses in the Chinese economy, rose to 53.1—beating estimates. September export and import values rose 14.5% y/y and 14.3% y/y, respectively.

The Week Ahead:

The US releases September retail sales, industrial and manufacturing production and the Conference Board’s September Leading Economic Index. The UK reports September retail sales, inflation and August unemployment figures. The eurozone posts September inflation and August trade data. Japan announces September inflation and trade data as well as August industrial production. China releases September retail sales, industrial production and inflation and Q3 2018 GDP growth.

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.