Fisher Investments - This Week In Review (Jan. 03, 2025)

Transcript

Charlie Hoskin:

Welcome to This Week in Review. This weekly segment is designed to highlight a few things you may have missed this week, what they mean for financial markets, and most importantly, investors.

Now, let's review what happened this week.

First, wrapping up 2024.

On Monday and Tuesday, stock markets closed out 2024 on a slightly sour note, but don't let that distract you— the year was a winner for global stocks, which climbed around 18%. Investors who remain disciplined were rewarded, but many fell prey to knee-jerk decisions following headline grabbing fears and uncertainty. The year brought plenty of scary moments that caught investor attention: Conflicts in the Middle East, a very divided U.S. election, oil market swings, recession fears, government debt concerns and many more.

But here's the fascinating part—worry fuels bull markets. Stocks don't just climb because everything is perfect. They rise when reality turns out better than expected. All that fear and negativity creates a "wall of worry" and bull markets love to climb it. Even when we saw market volatility in late December, that just helped reset expectations and rebuild the wall.

Next, global manufacturing PMI data.

This past week, we saw December's Manufacturing PMI data roll in from major economies including the US, China, Europe and the UK. As a reminder, PMI stands for Purchasing Manager Indexes and they are surveys that ask businesses how things like orders, hiring and production are going.

Here's the gist of what we learned from these surveys. Throughout 2024, PMI data pointed to growth in many major economies. In recent months, manufacturing has been slowing in some areas, but services things like healthcare, hospitality and education are much bigger drivers of modern developed economies than manufacturing and remain healthy in most places. As for stocks, none of this is really new. Markets have been dealing with sluggish manufacturing for a while now, with services picking up the slack.

Finally, a shakeup in Congress.

Today, the 119th U.S. Congress was sworn in, and Republicans now control both the Senate and the House. Congress' slim Republican majority could make it tricky to get much done. Infighting and razor thin vote margins often mean it's tough to pass major legislation, even with the same party in control. That's worth keeping in mind as we head into 2025. There might be big promises or big worries about what this Congress will do, but the reality might end up being a lot less dramatic.

And that's it for this week.

To learn more about what we're watching, check out our other series, 3 Things You Need to Know This Week, released each Monday. You can also visit the insights section at FisherInvestments.com for more insights. Thank you for joining us, and don't forget to subscribe!