Fisher Investments Reviews: Last Week in Markets—January 29 - February 2

In the US, the final January S&P Global Manufacturing Purchasing Managers’ Index (PMI) was revised up to 50.7 (readings above 50 indicate expansion). January nonfarm payrolls increased by 353,000 and the unemployment rate remained at 3.7%. The Federal Reserve left monetary policy unchanged. While many speculate over when the Fed might start cutting rates, we believe rate cuts aren’t required for economic growth or the bull market to continue.

In the UK, the final January S&P Global Manufacturing PMI was revised lower to 47.0. December money supply (M4) rose 0.5% m/m but fell 0.9% y/y. The Bank of England left monetary policy unchanged. In the eurozone, the final January HCOB Manufacturing PMI rose to 46.6—the highest in ten months. Preliminary January headline and core consumer prices rose 2.8% y/y and 3.3% y/y, respectively. The December unemployment rate was 6.4%. The first estimate of Q4 2023 GDP was 0.0% q/q and 0.1% y/y—higher than Q3’s reading. Headlines claim the bloc is stagnating, the European Central Bank needs to loosen monetary policy, and manufacturers are too exposed to Red Sea shipping problems—all predictable pessimism. In our view, reality is more nuanced when evaluating the eurozone’s 20 member nations individually. For more, please see our 1/30/2024 commentary, “What the Eurozone’s ‘Flat’ Q4 Obscures.”

In Japan, the December unemployment rate was 2.4%—slightly below forecasts. The final January Jibun Bank Manufacturing PMI was 48.0, meeting expectations. Preliminary December industrial production rose 1.8% m/m and fell 0.7% y/y—both below expectations. December retail sales fell 2.9% m/m but rose 2.1% y/y. December imports fell 6.9% and exports rose 9.7% y/y. In China, the official January NBS Manufacturing and Services PMIs—focused on large, state-owned firms—came in at 49.2 and 50.7, respectively. The January Caixin Manufacturing PMI—which includes smaller businesses—was 50.8, slightly above expectations.

The Week Ahead

The US, UK, eurozone and China report final January services PMIs. The US releases December trade data. The eurozone posts December retail sales. Japan and China announce January money supply (M2) and bank lending. China releases January consumer prices.

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.