Weekly Wrap-Up

Last Week In Markets: Sept 23 - Sept 27, 2019

Fisher Investments recaps the biggest market, political and economic news from last week, including US and eurozone Markit Purchasing Manager’s Indexes and Japan’s Leading Economic Index.

Global equities fell 0.9% amid headlines dominated by US and UK politics. In the US, economic data were largely positive. The third estimate of Q2 2019 GDP posted 2.3% y/y, meeting consensus. The September Markit Manufacturing and Services Purchasing Managers’ Indexes (PMIs) were 51.0 and 50.9, respectively—with manufacturing missing and services surpassing expectations. August durable goods orders rose 0.2% m/m, beating forecasts. On Tuesday, Democratic leaders in the House of Representatives announced an official impeachment inquiry into President Trump following allegations he pressured Ukraine’s president to investigate potential corrupt dealings involving Hunter Biden—the son of former Vice President and current presidential candidate, Joe Biden. Predictably, headlines are jam-packed with reporting, speculation and opinions. While the drama may spur short-term market jitters, history shows impeachment isn’t necessarily negative for stocks. Furthermore, any surprise power will likely be sapped as this process plays out in public. For more, please see our 09/25/2019 commentary, “A Word on Impeachment and Stocks.”

In the eurozone, September Markit Manufacturing and Services Flash PMIs came in at 45.6 and 52.0, respectively—both missing expectations. August household lending grew 3.4% y/y, matching consensus. In the UK, the Supreme Court ruled on Monday that Prime Minister Boris Johnson’s suspension of Parliament was unlawful and Parliament reconvened on Tuesday. However, this ruling likely does not change much for markets in our view. It’s not clear Parliament has substantive Brexit-related legislation to consider before the EU summit on October 17-18. The most likely result is more dramatic rhetoric until either a deal is reached or an extension has been granted by the EU. In our view, the most beneficial Brexit outcome for markets would be one that ends the uncertainty sooner rather than later. For more, please see our 09/24/2019 commentary, “Today in Brexit: Day 1,187.”

In Asia, economic data were light. Japan’s Leading Economic Index (LEI) rose slightly to 93.7. August trade data were negative as exports and imports fell by 8.2% y/y and 11.9% y/y, respectively. Japan’s manufacturing and services PMIs fell to 48.9 and 52.8, respectively.

The Week Ahead:

The US reports final August durable goods orders and final September services and manufacturing PMIs. The eurozone releases August retail sales, while the UK posts the third estimate of Q2 2019 GDP and final Q2 2019 trade data. China reports September manufacturing and services PMIs. Japan announces August industrial production and retail sales.

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.