Weekly Wrap-Up

Last Week In Markets: Sept 21 - Sept 25 2020

Fisher Investments recaps the biggest market, political and economic news from last week, including US, UK, Japanese and eurozone September Purchasing Managers’ Index (PMI) readings, US August durable goods orders and eurozone August loan growth.

Global equities fell amid fears over resurgent COVID-19 cases in Europe. A handful of French and Spanish cities announced new limits on activity over the past week, and UK Prime Minister Boris Johnson announced nationwide measures on Tuesday. However, these restrictions aren’t anywhere as severe as those implemented globally in March. Given how much second wave fears have been discussed, we think it would take much bigger restrictions than what is presently under discussion to constitute a material negative surprise for stocks. For more, please see our 9/22/2020 article “Avoid Leaping to Conclusions on Europe’s Renewed Restrictions.”

In the US, the September Markit Manufacturing and Services Flash Purchasing Managers’ Indexes (PMIs) came in at 53.5 and 54.6, respectively—beating expectations. Readings over 50 indicate expansion. August durable goods orders rose 0.4% m/m, missing forecasts. August new home sales jumped 4.8% m/m, garnering headlines for handily surpassing expectations. Initial jobless claims ticked up to 870,000 in the week ending September 19, above estimates.

The eurozone’s September Markit Manufacturing Flash PMI rose to 53.7, above expectations, while the Markit Flash Services PMI fell to 47.6, below estimates. August money supply (M3) rose 9.5% y/y, below forecasts. August lending to households and non-financial companies increased 3% y/y and 7.1% y/y, respectively. In the UK, the September Markit/CIPS Manufacturing Flash PMI fell to 54.3, in-line with expectations, while the Services Flash PMI fell to 55.1, more than expected.

In Japan, the Jibun Bank Manufacturing and Services Flash PMIs rose to 47.3 and 45.6 respectively, missing consensus estimates.

The Week Ahead

The US reports its third estimate of Q2 2020 GDP and September unemployment. The first US presidential debate is scheduled for Tuesday, 9/29. The eurozone releases September inflation and August unemployment figures. The UK announces Q2 trade data, August money supply and its second estimate of Q2 2020 GDP. China reports September PMIs while Japan releases August unemployment, trade data, retail sales and September inflation data.

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.