3 Things You Need to Know This Week | October PMIs, Japan PM Election, RMDs

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Paige Tyson:

Hello and welcome to 3 Things You Need to Know this Week, our regular series designed to help you sift through the noise across financial media and understand what really matters for markets. To stay up to date with our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. With that, here are three things you need to know this week.

1st October PMI data.

This week, we'll get a fresh look at global economic activity, with S&P global releasing preliminary October Purchasing Managers indexes, or PMIs, for the US, UK, eurozone and Japan. PMIs are economic indicators sourced from monthly surveys sent to private sector businesses. They can provide timely snapshots of business activity and offer helpful context for investors. What does recent PMI data tell us? Good news. Composite PMIs, which combine manufacturing and services, remained expansionary in September for the US, eurozone and Japan. However, in the UK, the composite PMI fell sharply on worries over stagnant private sector activity. And looking more closely at manufacturing PMIs, September's data was mixed. The UK, eurozone and Japan indicated contraction, while the US manufacturing PMI dipped but continues signaling expansion. On the services side, which accounts for most of GDP in developed economies, data for the US, UK, eurozone and Japan all indicated expansion. The US and UK ticked down from the previous month, but it's normal to see wiggles like this from month-to-month.

Looking forward, most service businesses continue to indicate a quiet confidence for 2026. For long-term investors, the big picture remains encouraging. The overall global composite PMI, which collects data across 40 countries, has stayed expansionary, a positive backdrop for global economic resilience and stocks.

Next, a Japan election update.

In Japan, the country's national parliament votes on whether to install a new prime minister this week. Following Prime Minister Ishiba's resignation last month, Japan's ruling political party, the Liberal Democratic Party, or LDP, selected Sanae Takaichi as their new party leader and potentially Japan's first female prime minister. However, her path became more challenging when the LDP's coalition partner Komeito abruptly withdrew, leaving the LDP without a lower house majority. This unexpected development has opened the door for opposition parties to potentially unify and challenge the LDP. Major opposition parties are reportedly considering uniting behind a single candidate, a move that could potentially secure them more seats than the LDP.

Now, this is a fluid situation where the prime minister vote was originally scheduled for last week, but was rescheduled for October 21st as of this filming. But this, of course, is subject to change, and we'll continue to monitor the situation as it develops. Regardless of when exactly this confident vote is held, here are a few takeaways. While political uncertainty may seem concerning, history suggests markets often benefit from such situations. Political gridlock typically reduces the risk of disruptive policy changes, minimizing regulatory uncertainty and creating a more stable environment for businesses. Japan's largest publicly traded firms are also more impacted by the broader global economic trajectory, which, as we've shared, remains resilient. Forward looking stocks focus more on these fundamentals rather than short term political headlines.

Finally, a reminder about required minimum distributions.

As the year comes to a close, it's a good time to check in on your required minimum distributions or RMDs. These are the minimum amounts you're required to withdraw each year from certain retirement accounts, like traditional IRAs and 401Ks, once you turn 73. Most RMDs need to be taken by December 31st to avoid penalties. 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 in another account. And if you have multiple retirement accounts, make sure you're meeting the RMD requirements for each one. RMDs can have tax implications, so it's a good idea to consult a tax advisor or financial professional to make sure your strategy fits your unique situation. And remember, starting early can help you avoid last minute stress and help ensure everything is handled properly. Don't wait. Start planning your RMDs today.

And that's it for this episode of 3 Things you Need to Know this Week.

For more of our thoughts on markets, check out This Week in Review, released every Friday. You can also visit FisherInvestments.com. Thanks for tuning in and don't forget to hit like and subscribe!