Fisher Investments Reviews: Last Week in Markets—September 16 - September 20

In the US, August retail sales rose 0.1% m/m and 2.1% y/y. August industrial production rose 0.8% m/m but remained flat y/y. August manufacturing production rose 0.9% m/m and 0.2% y/y. The Federal Reserve cut interest rates by 50 basis points to 4.75%-5.0%. Many view this announcement as pivotal for markets, but we believe this overstates the Fed’s influence on the economy and the significance of a single policy decision. Whatever the economy and markets do from here, it really doesn’t matter much that rates are half a point lower. For more, please see our 9/18/2024 commentary, “The Fed’s Big Cut Meets Cognitive Dissonance.”

In the UK, August consumer inflation rose 0.3% m/m and 2.2% y/y, while core consumer inflation rose 0.4% m/m and 3.6% y/y. The Bank of England left monetary policy unchanged at 5.0%—in line with consensus estimates. August retail sales rose 1.0% m/m and 2.5% y/y. In the eurozone, August consumer inflation rose 2.2% y/y, while August core consumer inflation (excluding energy, food, alcohol and tobacco) rose 2.8% y/y—both in line with estimates.

In Japan, August preliminary imports and exports rose 2.3% y/y and 5.6% y/y, respectively—both less than expected. August consumer inflation rose 3.0% y/y. August core-core consumer inflation (excluding fresh food and energy) rose 2.0% y/y. The Bank of Japan left monetary policy unchanged at 0.25%—in line with expectations. In China, August money supply (M2) grew 6.3% y/y.

The Week Ahead:

The US, UK, eurozone and Japan report flash September Manufacturing and Services Purchasing Managers’ Indexes (PMIs). The US reports August new home sales, the third estimate of Q2 2024 GDP growth and preliminary August durable goods orders. The eurozone reports August money supply (M3). Japan releases the Conference Board’s Leading Economic Index for July and August 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.