Fisher Investments' "Three Things You Need to Know" Feb. 17th

Transcript

Jessica Breiland:

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's three things you need to know this week.

First up, UK inflation.

On Wednesday, the UK is set to release its January Consumer Price Index data. While inflation has stayed moderate lately, some are worried tax hikes and higher national minimum wages set for April might hurt businesses, forcing them to cut jobs or raise prices and maybe reignite inflation. But here's what's important to keep in mind this idea may oversimplify what drives inflation. Businesses have lots of ways to adapt beyond raising prices. They could cut costs, boost efficiency, rework supply chain agreements and much more. Businesses are highly flexible and good at adapting.

From our perspective, inflation is rooted in too much money chasing too few goods. Right now, global money supply growth is pretty tame. Unless there's a big policy shift from central banks, we think inflation is unlikely to surge again.

Next, PMIs.

This Friday we'll get updates on global economic activity as the US, UK, eurozone and Japan publish preliminary February PMIs. These are surveys sent to private companies that help measure business activity. A reading above 50 signals growth, while below 50 suggests contraction. Last month's PMIs pointed to expansion in key areas like the US, the eurozone and Japan. Even globally, things look solid, and we expect this growth to largely continue.

Here's why that's good news for investors. Even slow, steady economic growth can support stock markets. Last year was a great example of this. We saw modest growth globally but solid market returns. If we're in for more of the same in 2025, history suggests markets could continue delivering gains.

Finally, a reminder about potential tax changes.

Without Congressional action, the Tax Cuts and Jobs Act from 2017 is set to expire at the end of 2025. While the Trump administration and lawmakers say they want to extend it, there is no guarantee that all tax provisions will be extended.

If the tax cuts do expire, we could see big changes for individuals and families, lower lifetime gift and estate tax exemptions, a smaller standard deduction, higher tax rates for many income brackets and more. If you're unsure what this could mean for you or you have questions, this is the perfect time to connect with a CPA or financial professional. Reviewing your plans now can help you stay ahead of any potential changes.

And that's it for this 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 FisherInvestments.com for more market insights. Thanks for tuning in and don't forget to subscribe! We'll see you next week.