Fisher Investments - This Week In Review (Nov. 29, 2024)

Transcript

Ben Thistlewaite:

Hello, and welcome to Fisher Investments’ This Week in Review. The economy and markets can feel dizzying and ever changing. That’s where we can help. This weekly segment is designed to highlight a few things you may have missed this week, and what they mean for financial markets and, most importantly, investors.

Now, let’s review what happened this week.  

First, let’s talk about tariffs.

On Tuesday, President-elect Trump announced his plans to pursue tariffs on imports coming from Mexico, Canada, and China. While this kind of news can impact specific industries and countries, the broader reaction from the global stock market wasn’t dramatic--meaning markets may have already factored in the potential for such developments based on rhetoric shared on the campaign trail. We’d like to remind investors that it’s likely too early to tell which of these ideas will actually turn into policies, and what effect they may have. For example, despite plenty of tariff talk during President-elect Trump’s first term, the tariffs that were implemented then only cost tens of billions of dollars. While that sounds like a lot, it’s tiny compared to the global economy, which is worth over 100 trillion dollars. For now, while these developments are important to keep an eye one, we wouldn’t recommend making big changes to your long-term investment strategy based on political talk or potential tariffs.

Next, Federal Reserve policies and US inflation.

The US Federal Reserve released notes this week from its November meeting, where officials shared thoughts on inflation, interest rates, and what they might do next. While these notes often spark a lot of speculation in the news, trying to predict the Fed’s actions isn’t something long-term investors need to worry about. Investors also got a report on inflation from the Fed’s preferred inflation measure —the Personal Consumption Expenditures Price Index, also known as the “PCE”. The PCE ticked up slightly in October from the previous month’s reading, but it’s been steadily coming down and is nearing the Fed’s target. Overall, this weeks’ developments appear to reinforce that neither inflation nor Fed decisions pose big concerns for markets right now—a positive for long-term investors.

Finally, an update on US GDP.

On Wednesday, the second estimate of US Gross Domestic Product (or GDP) for the third quarter of 2024 was released, which matched the first estimate of 2.8% growth over the same period last year. GDP data is subject to multiple revisions but it’s important to keep in mind: stock markets don’t focus on past numbers like GDP. They look ahead. What really matters is future growth, not what happened last quarter. And when we look at things like consumer spending, corporate profits and business investment, it’s clear the economy is stronger than many realize. We believe this positive momentum will likely continue and could fuel further growth for stocks.

And that’s this week in review. To learn more about what we’re watching each week, check out our other series, Three Things You Need to Know This Week, released each Monday. You can also visit FisherInvestments.com for more insights.  Thanks for joining us, and don’t forget to subscribe!