Weekly Wrap-Up

Last Week In Markets: Sep 27 - Oct 01 2021

Fisher Investments recaps the biggest market, political and economic news from last week, including US, eurozone, Chinese and Japanese manufacturing PMIs, US and UK Q2 2021 GDP readings and Japanese LEI data.

In the US, the third estimate of Q2 2021 GDP was revised up slightly to 6.7% annualized and 12.2% y/y, as expected. The final September Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 60.7 from August’s reading of 61.1—beating expectations and still strongly expansionary (readings over 50 indicate expansion). August durable goods orders rose 1.8% m/m, surpassing expectations for a 0.7% m/m rise. In political news, Congress passed a spending bill extending federal funding through early December—avoiding a government shutdown which would have occurred Friday.

In the eurozone, the final September Markit Manufacturing PMI modestly missed expectations, coming in at 58.6. August money supply (M3) increased 7.9% y/y, higher than forecast. September core consumer prices (excluding energy, food, alcohol and tobacco) rose 3.4% y/y, slightly higher than expected. In politics, Germany held its federal election where results showed no party earned enough votes for a majority, ensuring another coalition government—a fine backdrop for German stocks. For more please see our 9/28/2021 commentary, “Germany Gets Gridlock Again.” In the UK, the third estimate of Q2 2021 GDP rose to 23.6% y/y and 5.5% q/q, higher than estimated. The September Markit/CIPS Manufacturing PMI exceeded expectations at 57.1.

In Japan, the final September Jibun Bank Manufacturing PMI was revised up to 51.5, but fell compared to August’s reading of 52.7. August industrial production figures decreased 3.2% y/y—lower than consensus estimates. The Conference Board’s July Leading Economic Index (LEI) decreased 1.5% from the prior month, in line with expectations. In more election news, Fumio Kishida was elected as the new Liberal Democratic Party leader and likely next Prime Minister. For more, please see our 9/29/2021 commentary, “Sunset on Reform Hopes in Japan.” In China, the final September Markit/Caixin Manufacturing PMI was 50.0, higher than the consensus forecast.

The Week Ahead:

The US, UK, eurozone, Japan and China release final September services PMI figures. The eurozone also reports August retail sales figures, while the US reports the September unemployment rate. Japan also releases preliminary August LEI data.