Last Week In Markets: May 22 - May 26 2023

In the US, the second estimate of Q1 2023 GDP was revised upwards to 1.3% annualized. April new home sales rose 4.1% m/m—well above forecast. April durable goods orders increased by 1.1% m/m, beating expectations. The May Flash S&P Global Manufacturing and Services Purchasing Managers’ Indexes (PMIs) were 48.5 and 55.1, respectively (PMI readings above 50 indicate expansion).

In the eurozone, data were light. The May HCOB Flash Manufacturing and Services PMIs were 44.6 and 55.9, respectively. In the UK, the May S&P Global/CIPS Flash Manufacturing and Services PMIs were 46.9 and 55.1, respectively—both below expectations. April retail sales decreased 3.0% y/y. April consumer prices eased to 8.7% y/y, while core consumer prices (excluding food, energy, alcohol and tobacco) rose to 6.8% y/y. The latest inflation data led to many forecasts of higher interest rates, calls for more government action to rein prices in—and a general deepening in malaise. Although these data might not be pretty, in our view, there is ample room for positive surprise on UK prices from here. For more, please see our 5/25/2023 commentary, “UK Inflation Slowed, Sped and Disappointed.”

In Japan, the May Jibun Bank Flash Manufacturing and Services PMIs were 50.8 and 56.3, respectively—both above expectations.

The Week Ahead:

The US, eurozone, UK, Japan and China release final May Manufacturing and Services Purchasing Manager Indexes (PMIs). The US releases May nonfarm payroll figures and unemployment data. The eurozone reports May consumer prices, April money supply (M3) and unemployment numbers. The UK releases April money supply (M4) data. Japan reports April industrial production, retail sales and unemployment 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.