Weekly Wrap-Up

Last Week In Markets: Sept 4 - Sept 8, 2017

Fisher Investments recaps the biggest market, political and economic news from last week, including US, European, Japanese and Emerging Market economic releases, as well as central bank activity.

Global stocks ended the week flat as economic data releases were light and natural disasters in North America continued to dominate headlines.

US data releases were light during the holiday shortened week. The August ISM non-manufacturing purchasing manager’s index (PMI) expanded to 55.3—slightly more than anticipated. July durable goods orders fell 6.8% m/m, in line with the consensus. July imports and exports dropped 0.2% m/m and 0.3% m/m, respectively. Congress passed a bill combining disaster aid for Hurricane Harvey with extending government funding and raising the debt ceiling for three months. The bill now awaits President Trump’s signature.

In Europe, the third estimate of Q2 2017 eurozone GDP showed the region grew 0.6% q/q—matching the second estimate. July eurozone retail sales grew 2.6% y/y. July industrial production rose 0.5% m/m in France and 0.0% m/m in Germany—both fell short of estimates. The European Central Bank (ECB) left interest rates and Quantitative Easing (QE) levels unchanged. ECB President Mario Draghi noted they are likely to announce details of unwinding QE at their October 26 meeting. July UK industrial production grew 0.2% y/y, matching forecasts. July UK imports and exports both fell 0.2% m/m. (For more on the UK economy, see our recent MarketMinder.com commentary, “UK OK.”) The Bank of Canada announced it will raise its benchmark short-term interest rate by 25 basis points to 1.0%.

Data releases in Asia were sparse. The August Caixin Services PMI rose to 52.7, exceeding expectations. August China trade data was mixed—imports rose 13.3% y/y, but exports fell 5.5% y/y. In Japan, Q2 2017 GDP was revised down to 0.6% q/q, lower than the preliminary 1.0% q/q growth estimate.

The Week Ahead:

Expect headlines to be dominated by the effects of Hurricane Irma. Natural disasters have tragic human costs but rarely have much, if any, lasting impact on stocks. (For more commentary on natural disasters, please see our MarketMinder.com article “We Need to Talk About Harvey”). The US and UK release August retail sales and inflation. The eurozone posts July trade and industrial production figures. China and Japan report August retail sales and industrial production.

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.