August 21, 2017 – Weekly Market Commentary



 

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Keiko Ujikane – Bloomberg Markets
Domestic Consumption Fuels Surge in Japan’s Economic GrowthSummary: Japan’s economy topped all forecasts and grew for the sixth straight quarter. The expansion is now the longest in more than a decade. Growth was driven by an increase in private consumption and business spending. The central bank is hoping that the positive results will spark a rise in inflation and wages through the end of the year. 
 

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Maria Tadeo – Bloomberg Markets
More Countries Join the Euro-Area Recovery BandwagonSummary: Euro area GDP rose 0.6% in the second quarter, matching estimates. Germany continued to support the region, but strong growth from Spain, Italy, France, and the Netherlands indicated that economic strength is broadening. The data indicates that positive inflationary pressures are continuing to build. 
 

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David Scutt – Business Insider
Chinese Economic Data Misses Across the BoardSummary: Chinese economic data missed expectations by a significant margin. Retail sales, industrial output, and urban fixed investment were the most disappointing data points. Some of the declines are likely due to cooling demand in the property markets. New construction, sales, and property investment all declined.
 

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Lindsay Dunsmuir and Jason Lange – Reuters
Fed Policymakers Grow More Worried About Weak InflationSummary: The most recent Fed minutes showed that policymakers are wary about weak inflation and that a faction may be growing. Some members called for halting interest rate hikes until it was clear that recent data is in fact transitory. Another group is worried that delaying rate hikes could lead to overshooting inflation which would be “costly to reverse”. The Fed left the September meeting on the table for a rate hike, but the markets do not expect a rate hike until December or later. 
 

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Jeff Cox – CNBC
David Tepper Still Loves StocksSummary: David Tepper, known for kicking off the “Tepper Rally” in late 2010 with bullish comments, said that the markets are nowhere near overheated. Tepper said that comparisons to past market tops are “ridiculous” and that the state of the global economy supports a higher market multiple. 
 

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Rick Rieder – Chief Investment Officer
The Truth Buried in Weak Inflation DataSummary: Low inflation has led many critics to characterize the current environment as on lacking demand-driven pricing power for companies. Rieder says that the interpretation of sluggish headline inflation is much deeper than that. Technology is changing the way in which people interact with industries such as retail and auto where headline inflation has historically shown up. Rieder says that the secular trends keeping inflation low have not been seen in prior cycles and that the results will change how we think about inflation in the future. 

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