Last Week in Markets Weekly Wrap-Up

Last Week In Markets: Sep 19 - Sep 23 2022

Fisher Investments recaps the biggest market, political and economic news from last week, including August US LEI data, September US, eurozone and UK Manufacturing and Services PMIs and US Federal Reserve and Bank of England rate hike news.

In the US, the September S&P Global Flash Manufacturing and Services Purchasing Managers’ Indexes (PMIs) were 51.8 and 49.2, respectively—both beating expectations (readings above 50 indicate expansion). In August, the Conference Board Leading Economic Index (LEI) fell 0.3% from the prior month—more than expected. New housing starts increased 12.2% m/m in August, well above expectations for a 1.8% decline. On Wednesday, The US Federal reserve announced a 0.75% interest rate hike to the Federal Funds Rate, bringing the new target range to 3.0% – 3.25%. While worth watching closely, we believe the economic impact from Fed rate hikes is likely overstated. In a private sector-driven economy and global credit system, policymakers can influence the cost of credit, but businesses and households consider other factors, too. For more on interest rates’ impact, please see our 09/20/2022 commentary “The Relationship Between Rates and Stocks Isn’t as Straightforward as Many Think.”

In the eurozone, the September S&P Global Flash Manufacturing and Services PMIs were 48.5 and 48.9, respectively—both below estimates. In the UK, the September S&P Global/CIPS Flash Manufacturing PMI was higher than expected, coming in at 48.5. The September S&P Global/CIPS Flash Services PMI was 49.2—lower than expected. The Bank of England raised its key interest rate by 0.50% bringing its Bank Rate to 2.25%, lower than the 75 basis point hike some expected.

In Japan, August core-core consumer prices (excluding food and energy) rose 1.6% y/y. The Bank of Japan left monetary policy unchanged, maintaining their key short-term interest rate at -0.1%.

The Week Ahead:

The US and UK announce next estimates of Q2 2022 GDP. The eurozone and Japan report August unemployment figures. The US reports August durable goods orders. The eurozone reports September money supply (M3). Japan releases August trade data, retail sales and industrial production figures. China and Japan release September manufacturing purchasing managers’ indexes (PMI).

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.