Last Week In Markets: Dec 26 -30, 2016

Fisher Investments recaps the biggest market, economic and political news from last week, including US, European, Japanese and Chinese economic releases.

Global equities were down 0.4% for the week closing out an otherwise positive year.

US economic data were limited in the holiday-shortened week. November pending home sales fell -2.5% m/m, bucking an otherwise positive trend and disappointing expectations for a 0.5% rise. November wholesale and retail inventories grew after contractionary readings the prior month. Initial weekly jobless claims were in line with expectations, but continuing claims unexpectedly rose. 

European economic data were sparser. December UK home prices increased more than expected. Broad money supply in the eurozone continued accelerating in November, rising 4.8% y/y. Europe appears healthier than most investors appreciate, with regional economic data consistently surprising to the upside in Q4—bullish for 2017.

November Japanese economic data were muted. Japan’s jobless rate ticked up unexpectedly, but still remains very low at 3.1%. Overall household spending contracted further in November despite forecasts for growth. The November National Consumer Price Index (CPI) rose to 0.5% y/y, in line with expectations. However, core CPI (excluding fresh food) fell -0.4% y/y, the steepest fall in almost four years. November Japanese industrial production turned positive y/y, albeit less than forecast. Retail sales reaccelerated ahead of estimates to 1.7% y/y. 

November Chinese industrial profits accelerated to 14.5% y/y—likely a result of increased infrastructure spending this year.

The Week Ahead:

The year will kick off with OPEC’s agreement to reduce oil production by 1.2 million barrels per day going into effect on January 1. December Purchasing Managers’ Indexes (PMIs) are released for China, the eurozone, UK and US. The US publishes November construction spending, the full trade report and factory orders. The eurozone releases flash December CPI and Japan releases November wages.

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 a Luxembourg tax basis. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.

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