Fisher Investments recaps the biggest market, political and economic news from last week, including US economic releases, UK retail sales and Japanese inflation.
Global markets fell .4% amid mixed economic data. In the US, the Conference Board’s August Leading Economic Index (LEI) was flat m/m, following July’s 0.4% m/m increase. August industrial production rose 0.4% y/y, ahead of consensus estimates. On Monday, oil prices jumped following attacks on one of Saudi Arabia’s largest oil fields and a crude processing facility. The attacks resulted in Saudi Arabia losing 5.7 million barrels per day (bpd) of output—roughly 5% of global oil production. On Tuesday, Saudi Arabia announced half of the lost capacity from the attacks was restored and full output should be back by the end of September—reversing much of the earlier spike in oil prices. For more information, please see our 09/16/2019 commentary “Oil’s Big Jump in Perspective.” On Wednesday, the Fed lowered its federal-funds rate by 25 basis points to a target range of 1.75% - 2.0%. This cut was largely expected.
Eurozone data releases were light. Final August core consumer prices (excluding energy, food, alcohol and tobacco) rose 0.9% y/y, in line with expectation. In the UK, August retail sales grew 2.7% y/y, matching forecasts. August core consumer prices (excluding energy, food, alcohol and tobacco) rose 1.5% y/y, less than expected. The Bank of England left its monetary policy unchanged.
In Asia, Japan’s August core-core consumer prices (excluding food and energy) rose 0.6%. August trade data were negative as both exports and imports fell by 8.2% y/y and 12% y/y respectively. The Bank of Japan made no changes to its monetary policy. In China, August retail sales and industrial production rose 7.5% y/y and 4.4% y/y, respectively, both below expectations.
The Week Ahead:
The US and eurozone report preliminary September manufacturing and services Purchasing Managers’ Indexes. The US also releases preliminary August durable goods orders and the third estimate of Q2 2019 GDP. The eurozone also posts August 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.