Last Week In Markets: May 8 - May 12 2023

In the US, data were light. April consumer prices rose 0.4% m/m—matching expectations—and 4.9% y/y, slightly lower than anticipated. Core consumer prices (excluding food and energy) increased 0.4% m/m and 5.5% y/y. The inflation report showed many of shoppers’ recent sore spots—such as food, energy and shelter prices—are starting to heal. In our view, decelerating inflation should be a tailwind for stocks this year. For more, please see our 5/10/2023 commentary, “Skeptics and the Slowing US Consumer Price Index.”

In the UK, the first estimate of Q1 2023 GDP expanded 0.1% q/q—in line with forecasts—and 0.2% y/y, exceeding expectations. March industrial production increased 0.7% m/m and declined 2.0% y/y, beating estimates. March manufacturing production rose 0.7% m/m and fell 1.3% y/y, better than expected. Preliminary Q1 2023 imports and exports fell 7.2% q/q and 8.1% q/q, respectively. The Bank of England announced a 25 basis point rate hike, bringing its Bank Rate to 4.5%.

In Japan, the final April Jibun Bank Services Purchasing Managers’ Index (PMI) was revised up to 55.4 from the initial 55.0 estimate (readings over 50 indicate expansion). Preliminary April money supply (M2) expanded 2.5% y/y. In China, April consumer prices rose 0.1% y/y—less than expected. April imports decreased 7.9% y/y while exports increased 8.5% y/y. Money supply (M2) rose 12.4% y/y in April, while the value of outstanding loans (in yuan) grew 11.8% y/y.

The Week Ahead:

The US and China report April industrial production and retail sales. The US reports the April Leading Economic Index (LEI) reading. Japan and the eurozone release their first and second estimates of Q1 2023 GDP, respectively, as well as March industrial production and April consumer prices. The UK announces the unemployment rate for the three months ending in March. Japan releases preliminary April trade figures. 

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.