Last Week In Markets: Mar 20 - Mar 24 2023

Fisher Investments recaps the biggest market, political and economic news from last week, including US, UK, eurozone and Japanese March Purchasing Managers' Index (PMI) readings, UK and Japan February consumer prices and US Federal Reserve and Bank of England rate hikes.

In the US, the flash March S&P Global Manufacturing and Services Purchasing Managers’ Indexes (PMIs) were 49.3 and 53.8, respectively—both exceeding expectations (readings over 50 indicate expansion). February durable goods orders (excluding transportation) were flat month-over-month, below forecasts. On Wednesday, the Federal Reserve announced a 25 basis point rate hike, bringing the fed-funds target range to 4.75% - 5%. While many remain hyper-focused on Fed rate hikes, rate hikes alone have not had the power to slow growth or cause recession. Average savings account rates are just 0.37% now, up from 0.06% a year ago. With most of their funding base costing little, banks have been able to lend at higher profits. For more, please see our 3/23/2023 commentary, “Clouds and Silver Linings on Bank Fears and Inflation.” 

In the eurozone, the flash March S&P Global Manufacturing and Services PMIs were 47.1 and 55.6, respectively. In the UK, the flash March S&P Global/CIPS Manufacturing PMI was 48.0, while the flash Services PMI was 52.8—both lower than anticipated. February headline consumer prices rose 10.4% y/y while core consumer prices (excluding food and energy) rose 6.2% y/y. February retail sales increased 1.2% m/m but decreased 3.5% y/y. The Bank of England announced a 25 basis point rate hike, bringing its Bank Rate to 4.25%—in line with expectations.

In Japan, the flash March S&P Global/JMMA Manufacturing PMI was 48.6, while the flash Services PMI was 54.2. Core-core consumer prices (excluding food and energy) rose 3.5% in February.

The Week Ahead

The UK and US report their second and third estimates of Q4 2022 GDP, respectively. The eurozone and UK report February money supply. The eurozone releases flash March inflation data. The UK reports final Q4 2022 trade data. Japan reports final February trade data and preliminary February 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.