Fisher Investments recaps the biggest market, political and economic news from last week, including a Brexit update, eurozone GDP data and US PMI numbers.
Global equities rose in a holiday-shortened week amid mixed economic data and Brexit developments in UK Parliament. In the US, data were mixed. The August Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 50.3, above estimates, while the Services PMI was reported at 50.7, slightly below estimates (readings above 50 indicate expansion). The August ISM Manufacturing PMI fell to 49.1, missing expectations. August ISM non-manufacturing PMI rose to 56.4, beating expectations.
In the eurozone, Q2 2019 GDP grew 1.2% y/y, slightly above the initial estimate. The August Markit Manufacturing and Services PMIs came in at 47.0 and 53.5, respectively—in line with initial estimates. July retail sales increased 2.2% y/y, more than expected. In the UK, August retail sales were flat y/y. The August Markit/CIPS Manufacturing PMI fell to 47.4, narrowly missing forecasts, while the Services PMI fell to 50.6—below the consensus estimate. Meanwhile, Brexit uncertainty continued as the House of Commons rejected Prime Minister Boris Johnson’s call for a general election and passed a bill requiring the government to request an extension to the October 31 deadline if no deal is reached by October 19. For more Brexit commentary, please see our 09/05/2019 article, “Today in Brexit, Day 1,168.”
In Asia, Japan’s Nikkei Manufacturing and Services PMIs were reported at 49.3 and 53.3, respectively. July core-core consumer prices, which exclude fresh food and energy, increased 0.6% y/y. China’s Markit/Caixin Manufacturing and Services PMIs, which capture smaller businesses in the Chinese economy, rose to 50.4 and 52.1, respectively. Both modestly beat expectations.
The Week Ahead:
The US releases August retail sales and inflation data. The eurozone and UK release July industrial production and trade numbers. The UK posts its July unemployment rate. Japan releases a second estimate of Q2 2019 GDP, July industrial production and July retail sales. China announces August trade data and loan 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 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.