Personal Wealth Management / Weekly Wrap-Up

Last Week In Markets: Oct 31 - Nov 04 2022

Fisher Investments recaps the biggest market, political and economic news from last week, including the first Q3 eurozone GDP estimate, October US, UK, eurozone, Japan and China Manufacturing and Services PMIs and US Federal Reserve and Bank of England rate hikes.

In the US, the final October S&P Global Manufacturing and Services Purchasing Managers’ Indexes (PMIs) were revised higher to 50.4 and 47.8, respectively. (Readings over 50 indicate expansion) Nonfarm payrolls increased by 261,000 in October, beating consensus forecasts. The October unemployment rate increased to 3.7%, higher than expected. The US Federal Reserve announced a 0.75% interest rate hike to the Federal Funds Rate, bringing the new target range to 3.75% – 4.0%. While headlines continue to hyper-focus on the Fed, we caution investors not to draw big, forward-looking conclusions from short-term market movements or Fed officials’ words. For more, please see our 11/02/2022 MarketMinder article “Zoom Out to Gain More Perspective on Traders’ Reactions to the Fed.”

In the UK, the final October S&P Global/CIPS Manufacturing and Services PMIs were revised higher to 46.2 and 48.8, respectively. September M4 Money Supply grew 2.1% m/m and 5.4% y/y. The Bank of England raised its benchmark interest rate by 75 basis points to 3.0%. In the eurozone, the final October S&P Global Manufacturing and Services PMIs were revised to 46.4 and 48.6, respectively. October flash consumer prices rose 10.7% y/y, while flash core consumer prices (excluding energy, food, alcohol and tobacco) rose 5.0% y/y—both higher than consensus forecasts. The September unemployment rate ticked down to 6.6%. The first estimate of Q3 2022 GDP beat expectations at 0.2% q/q and 2.1% y/y.

In Japan, the final October Jibun Bank Manufacturing PMI was unchanged from the flash reading at 50.7, while the Services PMI was revised higher to 53.2. Preliminary September industrial production declined 1.6% m/m but increased 9.8% y/y. Preliminary September retail sales rose 1.1% m/m and 4.5% y/y. In China, the official October NBS Manufacturing and Non-Manufacturing PMIs—focused on large, state-owned firms—were 49.2 and 48.7, respectively. Meanwhile, the Caixin Manufacturing and Services PMIs—which include smaller businesses—were 49.2 and 48.4, respectively.

The Week Ahead:

The US and China announce October consumer prices. The UK reports the first estimate of Q3 2022 GDP, Q3 trade data and September manufacturing and industrial production. The eurozone releases September retail sales. Japan and China release October money supply (M2) and lending figures. China also releases October trade 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.

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