3 Things You Need to Know This Week | Trump’s Trip Abroad, Q1 GDP, Financial Planning (May 12, 2025)

Transcript

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. Now, here are three things you need to know this week: First up, President Trump visits the Middle East. This week, President Trump will travel to the Middle East. Many expect the Israel-Hamas conflict, Iran nuclear deal, tariffs, mutual investments and military equipment sales to be on the agenda. President Trump has also mentioned the possibility of a meeting with Russian President Vladimir Putin, though this is yet to be confirmed. Needless to say, the president's visit is likely to generate media attention. When world leaders meet, we think investors should sift through what is and isn't relevant to markets and focus on actual policies, rather than react to dramatic rhetoric or headlines. During this visit, it's possible that headlines will focus on ongoing or emerging regional conflicts. There's no denying the profound human toll these events take, and it's important to acknowledge their tragic realities. However, when we consider the broader global economy and markets, history shows regional geopolitical conflicts tend not to create widespread disruptions. Bull markets have endured, and even thrived, as these scary and saddening events lowered investor expectations and raised the likelihood reality positively surprises. For example, the 2009 to 2020 bull market overcame regional conflicts such as the Libyan Civil War, the 2014 Israel-Hamas conflict, the Syrian Civil War, and the Russian annexation of Crimea. While it's impossible to predict what exactly will or won't be announced in this week's meetings, we encourage investors to remain level headed and avoid making reactionary short-term investment decisions. Next, first quarter GDP releases continue. This week, we'll get more first quarter 2025 GDP reports from around the world. On Thursday, the UK releases its first estimate of Q1 GDP, while the eurozone reports its second estimate. On Friday, Japan will announce its preliminary Q1 GDP data. This all comes after the US economy reported a slight Q1 contraction amid recession fears. Weaker than expected GDP reports would likely be viewed by some as proof that tariffs are slowing the global economy. On the other hand, stronger results may be dismissed as old news, with tariffs expected to weigh more heavily on Q2 economic activity and beyond. Keep in mind we already received the first estimate of eurozone GDP for the first quarter, which showed broad based growth across member nations and an improvement from the fourth quarters growth rate. To us, the eurozone's better than expected economic growth, in contrast to the disappointing US reading, highlights how the global economy has pockets of strength and weakness. But we think the balance is more positive than many perceive. In any event, we'd encourage investors not to read too much into a single quarter's GDP reading. Whether it surprises to the upside or the downside, economic data always looks backward, and while this information is important to closely monitor, it's never been reliably predicted for where stock prices are headed next. Finally, some financial spring cleaning. With tax season in the rear view mirror, now is a good time to do a little financial spring cleaning. Good financial hygiene today can save you time and money down the road. One good habit—consider storing your tax forms and records somewhere secure and discarding older documents you no longer need. The IRS generally has three years from the date you file your taxes to audit you, so you'll want to keep records of past returns for reference. That number rises to six years if you're self-employed. The IRS has a resource which offers guidance depending on your situation. Available at irs.gov. Now, when it comes to things you don't need anymore— shred them! Protect your personal information and securely shred and dispose of any unnecessary documents on a regular basis. And speaking of taxes, if you received a large refund or paid a hefty bill this year, now would likely be a good time to adjust your tax withholdings for next year. Try utilizing tools like the IRS' Tax Withholding Estimator to help determine how much to withhold from your paycheck or retirement account distributions. Being proactive about things like adjusting your tax withholdings and getting your financial documents in order can save you time and possible stress when tax season comes along next year. 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 subscribe!