Fisher Investments Reviews: Last Week in Markets—July 29 - Aug 2

In the US, the final July S&P Global Manufacturing Purchasing Managers’ Index (PMI) was revised up slightly from the flash estimate to 49.6. Readings above 50 indicate expansion. Nonfarm payrolls rose by 114,000 in July, falling short of expectations, while the unemployment rate ticked up to 4.3%. On Wednesday, the Fed kept its fed-funds target range at 5.25% - 5.50%.

In the UK, the final July S&P Global Manufacturing PMI was revised up to 52.1. June money supply (M4) rose 0.5% m/m. The Bank of England cut its Bank Rate by 0.25% to 5.0%. In the eurozone, the final July HCOB Manufacturing PMI was 45.8, slightly up from the flash reading. The final Services PMI remained at 51.9. June unemployment rose to 6.5%. The first estimate of Q2 2024 GDP report showed 0.3% q/q and 0.6% y/y growth, exceeding expectations. Despite the better-than-expected report, headline reactions remained skeptical. Stocks move most on surprise, and with expectations so meager, it shouldn’t take much for reality to keep surprising to the upside. For more, see our 7/30/2024 commentary, “Diving Into the Latest Eurozone GDPs.”

In China, the July Caixin Manufacturing and Services PMIs were 49.8 and 52.1, respectively. In Japan, the final July Jibun Bank Manufacturing and Services PMIs were revised down to 49.1 and 53.7, respectively. Imports and exports increased 3.2% y/y and 5.4% y/y in June, respectively—both in line with expectations. Preliminary June industrial production fell 3.6% m/m and 7.3% y/y. Preliminary June retail sales rose 0.6% m/m and 3.7% y/y, higher than forecast. The Bank of Japan increased its policy rate to 0.25%. This, along with the decision to taper Japan’s quantitative easing program, indicate that monetary policy there is slowly returning to normal, which we think is an incremental positive. For more, see our 8/1/2024 commentary, “The BoJ Inches Closer to Normal.”

The Week Ahead

The US, UK, eurozone, China release final July Services PMIs. The eurozone releases June retail sales. China reports July trade data, loan growth, money supply (M2) and 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.