Last Week In Markets: Mar 6 - 10, 2017

Fisher Investments recaps the biggest market, economic and political news from last week, including US trade data, eurozone GDP and Chinese price data.

Global equities ended -0.1% lower amid generally positive economic data and persistent political chatter.

US economic data were largely positive. January factory orders rose slightly ahead of expectations at 1.2% m/m, buoyed by strong aircraft orders. Trade picked up in January as exports and imports climbed, while February nonfarm payrolls rose 235,000, handily beating expectations. House Republicans unveiled legislation to replace the Affordable Care Act—the bill, dubbed the American Health Care Act of 2017, faces opposition from both parties. It remains too early to project potential market impact as the bill may be significantly altered or supplanted during the legislative process.

European economic data were mixed but continue to show positive momentum. February UK home prices missed expectations, but still rose a healthy 5.1% y/y, while retail sales fell 0.4% y/y. The European Central Bank left rates unchanged and kept their quantitative easing program intact, but also suggested the risk of deflationary pressures has largely disappeared. The third and final estimate of Q4 2016 eurozone GDP confirmed 1.7% y/y growth—the 15th consecutive quarter of expansion.

In Asia, China’s annual National People’s Congress confirmed expectations for most 2017 economic targets—specifically, 6.5% GDP growth. The government will focus on slowing credit growth and further stabilizing the economy. China’s February consumer prices rose 0.8% y/y and producer prices rose 7.8% y/y. Chinese February trade data showed imports significantly beat expectations, while exports disappointed. February Japanese bank lending increased 2.8% y/y. South Korea’s Constitutional Court permanently removed Park Geun-hye as president amid corruption charges. Ms. Park was suspended in December 2016 following an impeachment by parliament. By law, the country must now elect a new president within 60 days.

The week ahead:

The US releases February industrial production, consumer prices, retail sales and the Leading Economic Index. Japan posts January industrial production. The UK releases employment data. The Fed and Bank of England meet to determine their countries’ respective monetary policies. The Fed is widely expected to raise short-term rates again. The Netherlands holds parliamentary elections.

Sources for data cited are FactSet, Eagle PACE, Bloomberg. 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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