Fisher Investments Reviews: Last Week in Markets—January 27 - January 31

In the US, the first estimate of Q4 2024 GDP showed 2.3% annualized growth, below forecasts. Preliminary durable goods orders fell 2.2% m/m in December, below expectations. New home sales increased 3.6% m/m, above expectations for a 3.5% m/m decline. The Federal Reserve kept interest rates steady at 4.25%-4.5%.

In the UK, December money supply (M4) increased 0.1% m/m. In the eurozone, the first estimate of Q4 2024 GDP growth was flat q/q but expanded 0.9% y/y, both below consensus forecasts. While Thursday’s readings disappointed, GDP is inherently backward looking—old news to forward-looking stocks. Looking ahead, we don’t expect gangbusters growth in Europe, but when sentiment is as depressed as it is, even modest growth can provide plenty of positive surprise for European stocks. For more, please see our 1/31/2025 commentary, “The Resilient Reality in Eurozone GDP.” December money supply (M3) increased 3.5% y/y, lower than forecasts. The unemployment rate ticked up to 6.3% in December, matching expectations. The European Central Bank lowered interest rates by 25 basis points to 2.75%, in line with expectations.

In Japan, December preliminary industrial production increased 0.3% m/m and decreased 1.1% y/y. The unemployment rate ticked down to 2.4% in December, less than consensus forecasts. Preliminary December retail sales fell 0.7% m/m and grew 3.7% y/y. December final imports and exports rose 1.7% y/y and 2.8% y/y, respectively. In China, the January NBS Manufacturing and Non-Manufacturing Purchasing Managers’ Indexes (PMIs)—focused on large, state-owned firms—were 49.1 and 50.2, respectively, both lower than expected. Readings above 50 indicate expansion. The final January Caixin Manufacturing PMI—which include smaller businesses—was 50.1, lower than expected.

The Week Ahead

The US, UK, the eurozone, Japan and China report January purchasing managers’ indexes. The US releases December durable goods orders, January nonfarm payrolls and January unemployment. The eurozone and China report January consumer inflation. The eurozone releases December retail sales. The Bank of England meets to set monetary policy.

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.