Fisher Investments Reviews: Last Week in Markets—March 11 - March 15

In the US, February retail sales rose 0.6% m/m and 1.5% y/y, below forecasts. February industrial production fell 0.2% y/y while manufacturing production fell 0.7% y/y. February consumer prices—as measured by the Consumer Price Index (CPI)—increased 0.4% m/m and 3.2% y/y, slightly above consensus estimates. Core consumer prices (which excludes food and energy) rose 0.4% m/m but eased to 3.8% y/y in February. The latest CPI data has pundits pondering what the slight uptick means for the Fed and potential rate cuts. In our view, stocks and the economy have done fine with high rates, and we see no foundation for arguing rate cuts are necessary for continued economic growth and robust stock returns. For more, see our 3/12/2024 commentary “US CPI and the Rate Cut Debate.”

In the eurozone, January industrial production fell 6.7% y/y. In the UK, January industrial production rose 0.5% y/y while manufacturing production rose 2.0% y/y. Unemployment in the three months ending in January increased slightly to 3.9%. January GDP expanded 0.2% m/m, matching forecasts. Despite the optimistic response to January’s GDP reading, sentiment toward the UK economy is still dreary. With expectations weak, even a modest cyclical upturn will probably bring big relief at this point, and that is all stocks need. For more, please see our 3/13/2024 commentary “ Did the UK’s ‘Recession’ End in January?”

In Japan, the second estimate of Q4 2023 GDP showed 0.1% q/q and 1.2% y/y growth. February money supply (M2) increased 2.5% m/m, slightly above estimates. In China, February money supply (M2) increased 8.7% y/y. Bank lending grew 10.1% y/y in February.

The Week Ahead:

The Federal Reserve, Bank of England and Bank of Japan meet to set their respective monetary policies. The US, UK, eurozone and Japan report flash March Purchasing Managers’ Indexes (PMIs). The UK, eurozone and Japan release February inflation. The UK reports February retail sales, while China announces January–February retail sales. Japan reports February industrial production and trade data, while China posts January–February industrial production and February unemployment.

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.