Last Week In Markets: May 29 - June 2 2023

In the US, the final May S&P Global Manufacturing Purchasing Managers’ Index (PMI) was revised lower to 48.4 (readings below 50 indicate contraction). May nonfarm payrolls increased by 339,000, handily exceeding expectations. Meanwhile, the May unemployment rate rose to 3.7%, higher than forecast. On Saturday, President Biden signed into law legislation that suspends the government’s debt ceiling until 2025.

In the eurozone, the final May HCOB Manufacturing PMI was 44.8. May flash headline consumer prices rose 6.1% y/y while flash core consumer prices (excluding food, energy, alcohol and tobacco) rose 5.3% y/y—both lower than consensus forecasts. April money supply (M3) rose 1.9% y/y, less than expected. The April unemployment rate ticked down slightly to 6.5%. In the UK, the final May S&P Global/CIPS Manufacturing PMI was 47.1. April money supply (M4) increased 0.3% y/y, slightly less than in March.

In Japan, the final May Jibun Bank Manufacturing PMI was 50.6. Preliminary April industrial production fell 0.4% m/m and 0.3% y/y. Preliminary April retail sales fell 1.2% m/m and rose 5.0% y/y—missing estimates. April exports grew 2.6% y/y but imports fell 2.3% y/y. The April unemployment rate declined to 2.6%. In China, the official May NBS Manufacturing and Non-Manufacturing PMIs—focused on large, state-owned firms—fell to 48.8 and 54.5, respectively. Meanwhile, the Caixin General Manufacturing PMI—which includes smaller businesses—rose to 50.9 in May. In our view, China’s current manufacturing readings align with its long-term transition toward a more service-oriented economy. For more, please see our 5/31/2023 commentary, “Needed Context for China’s ‘Disappointing’ Data.”

The Week Ahead

The US, eurozone, UK, Japan and China release final May Services PMIs. The eurozone reports its third Q1 2023 GDP estimate, while Japan reports its second. The eurozone releases April retail sales and Q1 2023 trade data. Japan and China report May money supply (M2) and loan growth. China announces May trade data and 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.