Global equities fell with politics dominating headlines during the US holiday-shortened week. US economic data were largely positive. The August Markit manufacturing and services Purchasing Managers’ Indexes (PMIs) were revised up to 54.7 and down to 54.8, respectively, from initial estimates. The August ISM manufacturing and non-manufacturing PMI surveys rose to 61.3 and 58.5, respectively—both beating expectations. All four PMI readings indicate expansion with readings well above 50. July exports fell 1.0% m/m while imports rose 0.9% m/m. August nonfarm payrolls increased by 201,000, ahead of forecasts. The August unemployment rate remained unchanged from the previous month at 3.9%.
In the eurozone, the third estimate of Q2 2018 GDP showed growth of 2.1% y/y, slightly below expectations. The August Markit manufacturing and services PMIs were confirmed at 54.6 and 54.4, respectively—both in line with initial estimates. July retail sales increased 1.1% y/y, less than expected. In the UK, the August Markit/CIPS manufacturing and construction PMIs fell to 52.8 and 52.9, respectively—both missing forecasts but still showing expansion. The Markit/CIPS services PMI—which represents around 80% of the UK economy—rose to 54.4.
In Asia, Japan’s Nikkei manufacturing and services PMIs were reported at 52.5 and 51.5, respectively. July household spending increased 0.1% y/y, more than expected. China’s Markit/Caixin manufacturing and services PMIs, which capture smaller businesses in the Chinese economy, fell to 50.6 and 51.5, respectively.
The US releases August retail sales, industrial production and inflation data. The eurozone and UK release industrial production and trade numbers. The UK also posts its July unemployment rate. Japan releases its second estimate of Q2 2018 GDP and reports August bank lending data. China announces August industrial production, retail sales, outstanding loan growth and inflation figures. The Bank of England and European Central Bank meet to set their respective monetary policies.
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 a Luxembourg tax basis. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.