Global equities rose modestly as economic data were mixed and corporate earnings beat expectations Earnings season started positively in the US, with most major US banks beating expectations due to strong trading and loan growth. December’s Small Business Optimism Index exceeded expectations. Meanwhile, the Producer Price Index (PPI) met expectations, up from November.
On the political front, Republicans initiated the process to repeal portions of the Affordable Care Act, though it is impossible to know what their final plan will look like. Similarly, while President-elect Trump’s press conference garnered attention, it remains too early to discern specific policy plans or their market impact. European economic data were light but generally positive.
November industrial production exceeded expectations in the UK, Germany, Spain, Italy and France. UK construction output accelerated in November. Europe continues to be one of the world’s bright spots when it comes to economic results relative to expectations. The only major Japanese economic release was December money supply which increased, modestly missing forecasts. Chinese export growth, CPI and money supply disappointed, while import growth and currency reserves exceeded expectations. In the week ahead, the US releases CPI, industrial production and several housing reports. The Eurozone reports CPI, and the UK posts CPI and retail sales. Japan releases retail sales and industrial production. China provides an update on retail sales, fourth quarter GDP and industrial production.