Fisher Investments Reviews: Last Week in Markets—January 8 - January 12

In the US, December headline consumer prices accelerated from November’s 5-month low of 3.1% y/y to 3.4% y/y—higher than expected. December core consumer prices (excluding food and energy) eased to 3.9% y/y—slightly above forecasts. Some fear December’s inflation report is a sign prices are stickier than first thought and the Fed has its work cut out for it as it seeks to return inflation to its 2% target. But consider how far we have come from the near double-digit inflation spike in 2022. Headline consumer prices have returned to their historical average neighborhood, and core inflation, while slower to hit more normal rates, has also improved markedly. Economic data and markets don’t move in straight lines. Wiggles like this December inflation report are normal and taking them in stride is a good skill for investors to practice—especially since leading inflation indicators point to more gradual improvement ahead. For more, see our 1/11/24 commentary, “Inflation’s December Uptick in Context.”

In the eurozone, November retail sales fell 0.3% m/m and 1.1% y/y, missing consensus expectations. The November unemployment rate fell to 6.4%. In the UK, November industrial production rose 0.3% m/m but fell 0.1% y/y. Manufacturing production increased 0.4% m/m and 1.3% y/y in November, surpassing forecasts.

In Japan, December bank lending increased 3.1% y/y. In China, December consumer prices rose 0.1% m/m but fell 0.3% y/y. December imports increased 0.2% y/y, just shy of estimates, while exports grew 2.3% y/y, beating forecasts. December money supply (M2) rose 9.7% y/y, below expectations.

The Week Ahead:

The US, UK and China report December retail sales. The eurozone, UK and Japan release December inflation figures. The eurozone, Japan and China release industrial production. China releases Q4 2023 GDP.

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.