This Week in Review | Global PMIs, SpaceX, RMD Planning

Transcript

Hello and welcome to This Week in Review.

This weekly segment is designed to highlight a few important developments you may have missed this week, what they may mean for markets, and most importantly, the potential impact for investors. To stay up to date with our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. Now, let's review what happened this week.

First, global PMIs.

A more complete picture of the global economy's health began to emerge in recent days, with final June Purchasing Managers Index, or PMI, releases from the US, UK, eurozone and Japan. As a reminder, PMIs are monthly economic indicators based on surveys of businesses. Scores above 50 indicate economic expansion, while scores below 50 indicate contraction. And June's readings highlighted some underappreciated strengths across the globe. June PMIs continue to signal a global expansion that remains largely intact amid ongoing concerns about global economic stability. We saw growth accelerate in the US and Japan, with readings climbing to 51.9 and 52.8 respectively. Meanwhile, the eurozone ticked up to 50, stabilizing right on the line between expansion and contraction. The UK did slip further into minor contraction territory at 49.3, falling from the prior month, but a minor dip in one country's PMI doesn't mean the global expansion has derailed. The key takeaway for investors is about how reality measures up against expectations. Headlines love to overanalyze minor bumps, but right now, the global economy is showing greater resilience than many anticipated, even in the face of significant sentiment headwinds. For investors, PMIs provide a snapshot of business activity and have recently been highlighting the underestimated strength of businesses and the global economy. This resilience suggests that the bull market still has room to run, even if there are occasional bumps along the way.

Next, SpaceX joins the Nasdaq.

On Tuesday, SpaceX joined the Nasdaq-100 Index. This decision follows late June's expedited inclusion of SpaceX in MSCI Stock Index products. While the rules for faster inclusion of major IPOs into broad indexes weren't changed for SpaceX alone and will apply to future large IPOs as well, the Nasdaq inclusion marks another milestone in the stock's post-IPO journey. The index is one of the world's most widely followed technology benchmarks and serves as the foundation for hundreds of funds and investment products designed to track its performance. SpaceX joining the Nasdaq-100 or other major indexes can elicit greed in some or fear in others. However, we counsel against getting swept in either direction. We believe focusing on compound growth in a globally diversified portfolio is a better approach to building wealth than worrying about a flashy new public company joining an index. Separately, the pace of SpaceX's inclusion into major indexes could be a useful sentiment indicator. Rapid index inclusion, like excessive IPO enthusiasm, can signal investor euphoria. However, SpaceX's rocky first month trading and reports that OpenAI is considering delaying its IPO suggest sentiment likely isn't too far ahead of itself. Also, investor euphoria by itself isn't automatically a bearish signal. While it's a risk worth watching closely as the year progresses, bull markets can continue for months or even years amid a euphoric environment.

Finally, a mid-year RMD reminder.

If you're age 73 or older, mid-year is a good time to check in on any required minimum distributions, or RMDs, for your retirement accounts. These are the minimum amounts you're required to withdraw each year from accounts such as traditional IRAs and 401 (k)s once you turn 73. Most RMDs need to be taken by December 31st to avoid penalties, but that doesn't mean you have until December 31st to request the funds. It varies depending on where you have your funds held, but most custodians have a deadline around mid-December, after which they cannot guarantee your funds will go out before the end of the year. So, don't wait until the last minute. When planning your RMDs, think about whether the amount is more than you need for living expenses. If it is, you might consider reinvesting the extra funds into another account. And, if you have multiple retirement accounts, make sure you're meeting the RMD requirements for each one. Starting early can help you avoid last-minute stress and help ensure everything is handled properly.

That's it for this week.

Thanks for tuning in to This Week in Review. If you're looking for more insights, then don't miss our other series Three Things You Need To Know This Week, released every Monday. You can also visit FisherInvestments.com anytime for our latest thoughts on markets. Thanks again for joining us, and don't forget to hit Like and Subscribe.