Fisher Investments - "3 Things You Need to Know This Week" (Nov. 25, 2024)

Summary

In this week's edition of '3 Things You Need to Know,' Mackenzie Whitaker from Fisher Investments discusses key financial topics. First, she highlights the upcoming release of the Federal Reserve’s November meeting minutes, advising against speculating on future Fed actions. Next, she addresses U.S. inflation, noting that while PCE inflation may slightly rise in October, the broader trend remains stable. Finally, she touches on the holiday shopping season, cautioning against reading too much into Black Friday sales as an economic indicator. For long-term investors, these developments are less about immediate headlines and more about steady trends.

Takeaways

• 😀 The Federal Reserve will release meeting minutes tomorrow, summarizing discussions on inflation, interest rates, and potential policy direction.
• 😀 Fisher Investments cautions against basing investment decisions on speculation from Fed meeting minutes, as there is often a gap between what is said and what is done.
• 😀 It's better for long-term investors to focus on actual Fed announcements and evaluate their impact over time, rather than predicting future actions.
• 😀 U.S. inflation data for October, as measured by the Personal Consumption Expenditures (PCE) index, will be released on Wednesday and is expected to show a modest acceleration.
• 😀 Global inflation trends are generally trending lower, bringing inflation closer to the Fed's target, which suggests that inflation is not a major concern for markets at the moment.
• 😀 Speculation about the impact of new U.S. government policies, such as tariffs or tax cuts, on inflation is premature and shouldn't be the basis for investment decisions.
• 😀 The holiday shopping season is starting with Thanksgiving and Black Friday, but Black Friday sales are not a reliable economic indicator.
• 😀 Black Friday's significance is often overstated, as the holiday shopping season typically spans across November and December and involves more spending on services than products.
• 😀 Fisher Investments advises against making broad economic conclusions based on a single shopping day like Black Friday.
• 😀 For more insights, Fisher Investments offers additional content through their 'This Week in Review' series and encourages visiting their website for further updates.

Q & A

What is the purpose of the Fisher Investments' '3 Things You Need to Know This Week' segment?

The segment is designed to help investors worldwide sift through the noise across financial media and focus on what truly matters for markets.

What key topic is discussed in the first part of this week's segment?

The first topic discusses the Federal Reserve meeting minutes, which will be released tomorrow and summarize what Fed officials discussed regarding inflation, interest rates, and potential future policy directions.

Why does Fisher Investments caution against relying on the Fed meeting minutes for predicting future actions?

Fisher Investments warns that there is often a gap between what central bankers say in meetings and what they actually do. Instead of reacting to speculation, it's better to wait for actual policy announcements and evaluate their long-term effects.

What is the significance of the personal consumption expenditures (PCE) price index for October, and when will it be released?

The PCE price index, which is the Fed's preferred measure of inflation, will be released on Wednesday. It will provide insight into inflation trends, but Fisher Investments suggests focusing on the broader trend rather than reacting to one month's report.

What is Fisher Investments' view on U.S. inflation and its potential impact on markets?

Fisher Investments believes that U.S. inflation is trending lower and is approaching the Fed's target. Despite potential concerns about new government policies such as tariffs or tax cuts, inflation remains stable and is not a major concern for markets based on current data.

How does Fisher Investments suggest investors approach potential risks from government policies like tariffs or tax cuts?

Fisher Investments advises against making investment decisions based on uncertain possibilities, emphasizing that predictions about government policies are speculative and not reliable for long-term investment strategies.

What is the significance of Black Friday sales in the context of the broader economy?

While Black Friday sales generate media headlines, Fisher Investments points out that they are not an accurate economic indicator. Retail spending often spreads across November and December, and consumer spending in developed countries like the U.S. is more focused on services than on products.

Why might Black Friday sales be overstated in their economic importance?

Black Friday sales are increasingly global and important for some businesses, but their significance is often overstated. Much of the holiday shopping season extends into December, and overall spending trends show that services, not products, are the main focus of consumer spending.

How does Fisher Investments view the broader trend of inflation globally?

Fisher Investments notes that inflation has been trending lower globally, which suggests a stabilizing inflationary environment. The broader global trend is seen as more important than individual monthly data points.

What is Fisher Investments' overall recommendation for long-term investors regarding the topics discussed?

Fisher Investments advises long-term investors to focus on actual announcements and long-term trends, rather than reacting to short-term fluctuations like the release of Fed meeting minutes or monthly inflation data. Maintaining a long-term perspective is key to making prudent investment decisions.