Last Week In Markets: Feb 13 - Feb 17 2023

In the US, January retail sales rose 3.0% m/m and 6.4% y/y, exceeding expectations. January industrial production was flat m/m, while manufacturing production rose 0.9% m/m. January core consumer prices (excluding food and energy) rose 5.6% y/y, slightly higher than forecast but down from December’s 5.7% rate. Headline consumer prices (which include food and energy) decelerated to 6.4% y/y from December’s 6.5% y/y—also higher than expected. Although both core and headline inflation eased from December’s readings, many pundits remained focused on various measures of “supercore” inflation—allegedly superior baskets that showed inflation is more entrenched than headline results suggest. To us, this indicates there remains room for sentiment to catch up to reality and bring stocks more inflation relief. For more, please see our 2/14/2023 commentary,“‘Supercore’ Inflation Focus Isn’t Super Logical.”

In the UK, January core consumer prices (excluding food and energy) rose 5.8% y/y, while headline consumer prices increased 10.1% y/y. January retail sales increased 0.5% m/m, but fell 5.1% y/y. The unemployment rate was 3.7% in the three months ending December 2022. In the eurozone, the second estimate of Q4 2022 GDP was 0.1% q/q and 1.9% y/y, in line with expectations and unchanged from the first estimate. January industrial production fell 1.1% m/m and 1.7% y/y, missing consensus estimates.

In Japan, December industrial production rose 0.3% m/m, surpassing forecasts, but fell 2.4% y/y. December retail sales increased 1.1% m/m and 3.8% y/y. Preliminary exports rose 3.5% y/y in January, while imports rose 17.8% y/y. The first estimate of Q4 2022 GDP showed 0.2% q/q and 0.6% annualized growth—both short of expectations.

The Week Ahead:

The US, UK, eurozone and Japan report flash February purchasing managers’ indexes (PMIs). The eurozone and Japan release January inflation data. The US releases its second estimate of Q4 2022 GDP. Japan reports final January 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.