Fisher Investments Reviews: Last Week in Markets—January 1 - January 5

Global equities fell, prompting some pundits to predict a gloomy 2024 based on the assumption early January returns are predictive for the year. However, we believe stock market history disproves this belief—no part of January is predictive, and sitting on the sidelines because January stumbled out of the gates probably isn’t a wise move. For more, please see our 1/4/2024 commentary, “An Ineffective Indicator: January’s Returns.” Overall, we expect stocks to deliver a good-to-great 2024. For more commentary on our 2024 market outlook, please see the Q4 2023 Executive Summary.

In the US, the final December S&P Global Manufacturing Purchasing Managers’ Index (PMI) was revised lower to 47.9 while the final Services PMI was revised up to 51.4 (readings above 50 indicate expansion). In December, nonfarm payrolls increased by 216,000 and the unemployment rate was unchanged from November at 3.7%, slightly beating expectations for 3.8%.

In the eurozone, the final December HCOB Manufacturing and Services PMIs increased slightly to 44.4 and 48.8, respectively. November money supply (M3) fell 0.9% m/m, less than expected. December flash consumer prices rose 2.9% y/y while core consumer prices (excluding food, energy, alcohol and tobacco) rose 3.4% y/y. In the UK, the final December S&P Global/CIPS Manufacturing and Services PMIs were 46.2 and 53.4, respectively. November money supply (M4) fell 0.1% m/m. 

In Japan, the final December Jibun Bank Manufacturing PMI was revised higher to 47.9 while the final December Services PMI was revised lower to 51.5. In China, the December Caixin Manufacturing and Services PMIs were 50.8 and 52.9, respectively, both exceeding expectations.  

The Week Ahead:

The US and China report December inflation data. The UK reports November GDP figures as well as industrial and manufacturing production data. The eurozone reports its November unemployment rate and retail sales. Japan and China release December loan growth. China also releases December money supply (M2) and 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.