Fisher Investments' "Three Things You Need to Know" Jan. 13th

Transcript

Stephanie Kuehne:

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.

And now, here are the three things you need to know this week.

First, some thoughts on 2025.

It's January, and you're probably wondering what's next for the stock market this year. As Fisher Investments founder and Co-Chief Investment Officer Ken Fisher shared in his recent article, we see a fairly wide range of equally likely outcomes, ranging from a mild decline to another year of big returns. Of all of the possible outcomes, though, we think that a big, prolonged downturn this year is unlikely. To us, the global economy currently looks set to extend many of 2024's trends, but politics and investor sentiment are more in flux and may hold things back a bit.

We're watching for signs that might indicate which scenario is most likely. But in the meantime, remember patience pays off—especially for long term investors. If your long-term goals require growth, staying invested in stocks makes sense. Stocks tend to rise more often than not. For more details on Ken's outlook, please visit the link in the description.

Next, US Senate confirmation hearings.

Starting tomorrow, president elect Trump's nominees for key cabinet and agency roles will enter the spotlight during the Senate confirmation hearings. These high-profile events typically generate a lot of headlines, and investors may speculate about potential policy changes and priorities in the upcoming administration. But a word of caution these hearings don't usually offer any meaningful insights for investors, at least not in the way that many think.

While we don't know exactly what form the cabinet will take. The key thing to watch will be what happens with legislation. From our perspective, the outlook for major legislation is murky at best. Checks and balances in government often limit how much any president or cabinet secretary, regardless of the party, can do on their own and margins in Congress are narrow enough that passing major legislation may be trickier than many think. Remember, major legislation creates both winners and losers, but narrow margins tend to slow or at least watered-down potential legislation giving stocks more time to pre-price likely outcomes.

Finally, China's Q4 2024 GDP.

On Friday, we'll receive China's GDP report for the fourth quarter of 2024. Growth in China's economy is expected to accelerate to 5% compared to the prior year. Remember, GDP reports are backward looking. They don't tell us a lot about what's going to happen next.

Overall, investor sentiment towards China has been muted. Some industries are bouncing back to pre-pandemic levels, but there's still some challenges, especially in China's real estate sector. The government has tried to address these with stimulus measures in recent months, but stimulus can only go so far. Whether the GDP report exceeds expectations or disappoints. The important takeaway for investors is that China, despite its issues, has continued to contribute to global economic growth.

And that's all for this week's 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 the Insights section of FisherInvestments.com. Tune in next week and don't forget to subscribe!