3 Things You Need to Know This Week | Global PMIs, US Jobs, Estate Planning

Transcript

Austin Standiford:

Hello and welcome to the Three 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 the three things you need to know this week.

First, global PMIs.

This week, we'll get more clarity on recent global purchasing managers indexes, also called PMIs. When the US, UK, eurozone and Japan officially report their final readings for May. Composite PMIs, which combine manufacturing and services sector data, can provide investors an almost real-time snapshot of business activity around the world. So, what does that look like? In May, we've seen mixed returns with PMIs in the UK and eurozone dipping slightly below 50 to signal potential contraction. However, it's important to remember that numbers in this range don't necessarily tell the full story. While PMIs measure the percentage of businesses experiencing growth, they don't show us the overall magnitude of that growth. The economy is perfectly able to expand at PMIs below 50 if the biggest companies are among those still growing, and with consumer sentiment in Europe so low, the opportunity for positive surprise remains high. And there's good news, too. With PMIs above 50, the US and Japan are showing indisputable signs of expansion. And unlike so many other indicators, PMIs are forward-looking. As we explained in a recent MarketMinder article, they paint a picture of a healthy environment for capital markets. Even with areas of weakness, there is still good growth around the world. Remember, in times of uncertainty, discipline and patience remain key. Headlines may focus on war, oil or supply chain disruptions, which we believe are classic bricks in the "wall of worry" stocks love to climb. That means, for the market to continue rising, reality just needs to be a little better than investor expectations.

Next, US jobs.

This Friday, we'll get US labor market data for April, including nonfarm payrolls and the latest unemployment numbers. It's no secret that there's been plenty of volatility when it comes to job growth lately. Readings have fluctuated monthly between positive and negative, before finally showing consecutive increases in March and April. And now, with May expected to mark the first three-month period of consecutive job growth in a year, US jobs have entered a period of stability. Meanwhile, low unemployment has also remained steady, reinforcing signs that the US labor market, while not as rip-roaring as it was during the post-pandemic boom, remains broadly resilient. However, while positive jobs growth is unquestionably a good thing, it's still important to remember that the numbers, good or bad, don't tell us much about what's ahead. They're more of a look back, showing decisions companies made months earlier. It's useful context, but it doesn't predict where the economy or markets are heading. Their effects have already been priced into stocks which are forward-looking and continue to rise.

Finally, estate planning 101.

With Baby Boomers currently holding over $85 trillion in assets, headlines often emphasize the concept of "The Great Wealth Transfer." That's the name for the shift of those trillions to generations of younger heirs. We know this can be a sensitive topic for many reasons, but it's never too early to start thinking about passing on your hard-earned savings and avoiding painful misunderstandings down the line. We recommend starting by contacting an attorney or an estate planner to create a will, a living trust, or any other legal structure necessary to protect your assets. If you already have these documents, make sure to review them periodically, especially as circumstances change, such as moving to a new state. This will provide your family with peace of mind and ensure your assets are passed down according to your wishes. We also recommend openly sharing your intentions with your family. Explain what to expect, where to find important documents and why you've structured your plans the way you did. It's not always easy to start the conversation, but keep in mind this is about securing your family's future, supporting the causes you care about and ensuring that your values endure.

And that's it for this episode of the Three 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.