Personal Wealth Management / Expert Commentary
3 Things You Need to Know This Week | Central Banks, Retail Sales Data, July PMIs (Jul. 21, 2025)
Fisher Investments’ “3 Things You Need to Know This Week” is a weekly segment designed to help investors worldwide sift through the noise across financial media and understand what really matters for markets. This week, we're covering:
- What’s ahead for the Fed and the European Central Bank (ECB)
- UK and Canada June retail sales
- July PMIs for the US, UK, eurozone and Japan
Want to dig deeper?
- How central bank decisions impact markets: https://www.fisherinvestments.com/en-us/insights/videos/fisher-investments-reviews-the-market-impact-of-central-bank-decisions
- Explore recent trends in European markets: https://www.fisherinvestments.com/en-us/insights/videos/key-reasons-to-pay-attention-to-europe
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Transcript
Mathew White:
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. And with that, here are three things you need to know this week.
First up, central banks.
This week, Fed Chair Jerome Powell is set to address potential changes to US bank capital requirements. These rules determine how much of a financial cushion banks need to maintain to guard against potential losses. After the 2008 financial crisis, these safeguards were introduced with good intentions to strengthen stability in the banking system. But in our view, some of the measures may have been a bit too cautious. Now, regulators in both the US and UK are looking at easing those requirements with the goal of encouraging more bank lending. Relaxing these rules doesn't mean banks are about to start taking wild risks. They've had strong safeguards in place for years, and reducing the requirements slightly could allow them more room to maneuver. We see this potential shift as a promising development that could give banks more flexibility to lend, which in turn, might provide a nice boost to broader economic growth. In other central bank-related news, the European Central Bank, or ECB, is expected to keep interest rates unchanged on Thursday, amid continued low inflation readings for the European economic bloc. Whether more rate cuts lie ahead for the ECB remains uncertain. For long-term investors, it's important to monitor broader market trends and fundamentals, alongside central bank developments, to determine where the markets may be headed next.
Next, UK and Canada retail sales.
On Thursday and Friday, we'll see June's retail sales data for both nations. In May, both countries, along with the US, reported declines. However, we caution against drawing sweeping conclusions based on 1 or 2 months of data. Monthly fluctuations in retail sales are normal and have occurred many times over the past few years without signaling a recession. For example, in the UK, May's dip might be tied to the higher household energy price cap, which forced some households to adjust spending. But with this cap set to drop in July, household finances could experience some relief, potentially stabilizing spending. The global economy is on steady footing, with the International Monetary Fund projecting growth near 3% for 2025. On top of that, corporate earnings for S&P 500 companies are expected to grow by 9% this year compared to 2024. For long-term investors, it's the bigger picture trends such as global economic growth and corporate performance that matter more than short-term data wiggles. And the numbers show that, while some short-term data like retail sales might look soft, the bigger picture remains stable.
Finally, July Flash PMIs.
On Thursday, we get fresh insight into global economic activity with S&P Global's release of July preliminary PMIs for the US, UK, eurozone and Japan. PMIs—or purchasing managers indexes—are key economic indicators derived from surveys that assess business activity and growth. In June, PMIs signaled broad expansion across major global economies. While many tend to focus on consumer spending, we think PMI and other business-oriented data are better tools for identifying key economic turning points. Why? Consumer spending tends to be relatively steady, as it often centers around essentials like food and housing, which remain consistent even during tougher times. On the other hand, business investment plays a much bigger role in driving shifts in the economy, making PMIs more valuable for spotting what may be ahead. Another common concern amongst investors is that slower global growth could hurt stocks, but history tells a different story. Stocks have delivered strong returns in the past, even during periods of modest growth. For us, the steady- but-slow growth suggested by recent PMIs is a positive sign that aligns well with the continuation of the current bull market.
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!
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