3 Things You Need to Know This Week | PMIs, World Economic Forum and BoJ Meeting (Jan. 19, 2026)

Transcript

Ben Thistlethwaite:

Hello, and welcome to Three Things You Need to Know this Week. This is our regular series that's designed to help you really 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, January flash PMIs.

This week we'll get our first 2026 look at Global Purchasing Managers indexes, or PMIs, with the US, UK, Eurozone and Japan all reporting flash or initial, January readings. PMIs can provide investors with a timely, almost real time snapshot of business activity. So, what has the recent data shown? December Composite PMIs, which include manufacturing and services sector data, showed that business activity continued to grow in the US, the UK, the eurozone and Japan, and global PMIs dipped a little in the latest reading, but continued to signal broad based economic expansion. And here's the key takeaway for stocks: It's not just about how well the economy is doing or even how fast it's growing. Instead, stocks care most about how reality compares to expectations. The global economy certainly isn't perfect, and there will always be some weak spots when we're looking at global economic data. But overall, when you look at the US, Europe or the broader global economy, businesses have been really resilient much more than many people expected. Looking back, global stocks total return was over 21% in 2025. To us, this is a classic market lesson. Stocks don't need a perfect or even great economy. In order for stocks to rise, reality again just has to be better than what investors expected. The resilience of businesses in the global economy, seen in recent PMI data remains supportive of this ongoing bull market, particularly if economic data continues surprising to the upside.

Next, the 2026 World Economic Forum.

The annual World Economic Forum kicks off this week in Davos, Switzerland. This event brings global leaders, policymakers and business executives together to try and address some of the world's most pressing challenges. A major focus of this year's event is US President Donald Trump, who will be leading the largest ever American delegation to the forum. The US delegation joins a robust international crowd with over 60 heads of state expected to attend. Despite this impressive guest list, it's helpful to remember the forum's specific goal. The World Economic Forum is not a legislative body. It does not create international laws or any kind of binding policies. Instead, it serves as a space for exchanging ideas, debating strategies, and fostering cooperation. Headlines regarding President Trump's policies or geopolitical shifts may very likely dominate the news cycle. But investors should view the World Economic Forum primarily as a platform for dialog. Expect a flurry of ideas and conversations, but remember that changes to the global economy aren't likely to happen overnight. We think investors are much better served by focusing on their long-term investment goals, rather than making any kind of portfolio adjustments based on the speculative policies from world leaders.

Finally, the Bank of Japan.

This week, the Bank of Japan convenes for its next monetary policy meeting. This comes just weeks after it raised its policy rate to 0.75%, which actually marks a 30 year policy rate high. While markets anticipate policy makers may briefly pause rate hikes in order to gauge the economic impact of December's tightening, the Bank of Japan's governor recently signaled the central bank remains ready to tighten further if inflation or wage growth rise, as forecast. After several years of very loose monetary policy, the process of bringing Japan more in line with global rate norms pushed the ten year Japanese government bond to their highest yields in roughly two decades. This also has drawn renewed attention to Japan's high debt levels. Yet, the data paints a much less concerning picture. Japan's stocks surged alongside these rising yields in 2025 as a steeper yield curve actively boosted bank lending. We think investors should view this transition in Japan's monetary policy as a sign of an economy where rising borrowing costs are a byproduct of genuine growth and sustainable inflation, as opposed to the stagnation Japan has been known for in recent decades.

And that's it for this episode of Three Things You Need to Know this Week.

For more of our thoughts on markets, check out This Week in Review. It's released every Friday. You can also visit Fisher Investments.com. Thanks for tuning in and don't forget to hit "Like" and "Subscribe!"