Fisher Investments Reviews: Last Week in Markets—April 29 - May 3

In the US, the final April S&P Global Manufacturing and Services Purchasing Managers’ Indexes (PMIs) were 50.0 and 51.3, respectively (readings over 50 indicate expansion). April nonfarm payrolls increased by 175,000, lower than anticipated. The April unemployment rate rose slightly to 3.9%. On Wednesday, the Fed kept its fed-funds target range at 5.25% – 5.50%. April’s market pullback likely amplifies investor concerns over what the Fed will do next. While shifts in market expectations for Fed policy can contribute to shorter-term, sentiment-driven volatility, we believe the bull market should continue this year regardless of whether the Fed holds rates “higher for longer” or starts cutting. For more, please see our 5/2/2024 article, “Our Counsel After April’s Spring Slide.”

In the UK, the April S&P Global Final Manufacturing and Services PMIs were 49.1 and 55.0, respectively. March money supply (M4) increased 0.5% y/y. In the eurozone, the April HCOB Final Manufacturing and Services PMIs were 45.7 and 53.3, respectively. The March unemployment rate remained steady at 6.5%. April flash consumer prices increased 2.4% y/y, while flash core consumer prices (excluding energy, food, alcohol and tobacco) rose 2.7% y/y. The first estimate of Q1 2024 GDP was 0.3% q/q and 0.4% y/y—slightly higher than forecast. The data showed the eurozone exited recession in Q1, at least by one common definition (two consecutive quarterly GDP contractions). Growth last quarter was broad-based as GDP rose in all 10 countries reporting thus far. We think current fretting over the sustainability of this growth leaves plenty of room for reality to keep positively surprising ahead. For more, please see our 5/1/2024 commentary: “The Eurozone’s Still-Underrated Economy Grows.”

In Japan, the April Jibun Bank Final Manufacturing PMI was 49.6. The March unemployment rate stayed at 2.6%. Preliminary March retail sales fell 1.2% m/m and rose 1.2% y/y. Preliminary March industrial production rose 3.8% m/m and fell 6.7% y/y. In China, the April Caixin Manufacturing and Services PMIs—which include smaller businesses—were 51.4 and 52.5, respectively.

The Week Ahead:

The UK releases its first Q1 2024 GDP reading. The Bank of England meets to set monetary policy. The eurozone reports March retail sales. Japan announces its final April services PMI.

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.