PMIs, Denmark Snap Election, Tax Season | 3 Things You Need to Know This Week

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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.

First, March Flash PMIs.

This week we'll get a fresh look at global purchasing managers' indexes, or PMIs, as the US, UK, eurozone and Japan released their initial March readings. PMIs offer investors a near real-time snapshot of business activity. So, what did the latest data reveal? Despite ongoing concerns about global economic health, last month's PMIs continue to signal private sector growth in the US, UK, eurozone and Japan. There has been a downward trend in the US, but Japan's PMIs have accelerated in recent months and the eurozone's figure rose in February as well. But for stocks, this isn't just about how well the economy is performing, or how fast it's growing. It's also about how reality measures up with expectations. And whether you look at the US, Europe or globally, recent economic data have shown us that the economy has consistently demonstrated greater resilience than many have anticipated. The bottom line for investors? PMI data continues to highlight the underestimated strength of businesses and the global economy. And we think this provides support for the ongoing bull market— especially if economic data continues to surpass expectations.

Next, Denmark's snap election.

This Tuesday, Denmark will hold a general election to determine the composition of its parliament, Denmark's primary legislative body. This is coming earlier in the year than expected. The prime minister, Mette Frederiksen, called the snap election after her party, the Social Democrats, saw a boost in the polls, driven by a recent diplomatic standoff with the US over Greenland— a topic that has featured prominently in the run up to the election. However, as we highlighted in a recent MarketMinder article, recent polling indicates the current governing coalition may struggle to retain its majority. This could potentially pave the way for a new coalition or fragmented parliament that could, in turn lead to a minority government and parliamentary gridlock. So, what does this mean for investors? In countries with smaller stock markets and high single company concentrations like Denmark, political influence can be more complicated. Individual issues with firms can more easily outweigh the tailwind provided by that political gridlock. To us, this is a good reminder that politics is just one driver of markets, and it's power can be dependent on a country's market characteristics. So, even if we get more gridlock in the new Danish government, it is just one factor that could be outweighed by other drivers.

Finally, a friendly reminder about taxes.

That's right. Tax season is upon us. The April 15th deadline to file most Individual, Trust, Estate or Gift Tax returns for the 2020 tax year is fast approaching. By now, you should have received your important tax forms, like a W-2 from your employer or a 1099 for your investment accounts. So, if you haven't filed your tax returns yet, now's a good time to get started. For those who need more time, you can request a filing extension until October 15th via the IRS. Just remember, the extension only applies to filing your returns— not paying your taxes. To avoid penalties or interest, make sure any taxes owed are paid by the April deadline. If you're feeling like you're paying too much, then this is also your chance to make deductible contributions, if eligible, to an IRA or HSA for the prior tax year. April 15th also marks the deadline to make Roth IRA contributions for the prior year, which can help you plan ahead for future savings. Filing taxes can feel overwhelming, so you may consider speaking with a tax professional to guide you through the process and help you make decisions that work for your unique financial situation. 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'.