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3 Things You Need to Know This Week | Global PMIs, US PCE Inflation, Annuities (June 22, 2026)

Fisher Investments

This episode covers three key financial topics: June PMI data releases across major economies that could surprise positively given low expectations, US PCE inflation data that is unlikely to broaden significantly despite recent headline increases, and a cautionary analysis of annuities in retirement accounts, arguing that long-term growth potential typically outweighs the appeal of guaranteed income.

Summary

The episode begins by explaining the significance of June flash PMI (Purchasing Managers Index) data coming from S&P Global for the US, UK, Eurozone, and Japan. PMIs measure business activity with readings above 50 indicating growth and below 50 suggesting contraction. May's data showed mixed results: the UK and Eurozone contracted (partly due to higher energy prices), while the US and Japan grew. The speakers note that PMI readings below 50 don't tell the complete story since they measure the share of businesses growing rather than the magnitude of overall growth. They argue that with low expectations for Europe, there's room for positive surprise, and that market weakness in economic expansions is normal.

The second topic addresses US PCE inflation, the Federal Reserve's preferred inflation gauge, with May's CPI data showing headline inflation rising to 4.2% and core inflation at 2.9%. While headline inflation above 4% may seem concerning, the speakers emphasize that May's data matched expectations, so markets weren't surprised. They argue that moderate money supply growth and historically short-lived effects from regional conflicts suggest inflation may moderate sooner than expected, leaving room for positive surprise. They express skepticism about inflation broadening out without major fiscal stimulus, supply chain disruptions, or accelerating money supply growth.

The final topic examines annuities offered within 401(k) plans. The speakers acknowledge the emotional appeal of guaranteed income but warn that annuities are complex insurance contracts with multiple layers of fees that compound over time. They highlight that annuities lack flexibility—if needs change, the annuity doesn't, and surrender fees can lock investors in. The core argument is that investors often misunderstand the trade-off between predictability and growth. The speakers present historical data showing stocks have returned roughly 10% annually, far outpacing inflation, and argue that for 20-30 year retirements, sacrificing market participation for short-term comfort can jeopardize long-term lifestyle.

Key Insights

  • PMIs measure the share of businesses experiencing growth, not the magnitude of that growth, so an economy can still expand with a PMI below 50 if the largest companies are among those still growing
  • With expectations toward Europe still low due to elevated energy prices, there remains ample room for positive surprise in June PMI data
  • May's CPI data matched expectations, indicating markets were not caught off guard by headline inflation rising above 4%, despite the alarming headline
  • Moderate money supply growth combined with historically short-lived effects of regional conflicts on energy prices suggest inflation may moderate sooner than most expect
  • Annuities carry multiple layers of compounding charges that reduce returns over time, and surrender fees can create costly locks that prevent reversing the decision if needs change

Topics

June PMI Data and Economic Growth SignalsUS PCE Inflation and Monetary TrendsAnnuities in Retirement Accounts and Long-term InvestingMarket Expectations vs. RealityPortfolio Asset Allocation and Retirement Planning

Transcript

[0:05] [music] >> Hello and welcome to three 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. To stay up-to-date with our latest market insights, subscribe to our YouTube channel or visit fisherinvestments.com. >> [music] >> And with that, here are three things you need to know this week. First, June flash PMIs. This week financial data provider S&P Global will publish June's purchasing managers index, also known as PMI data, [0:36] for the US, UK, Eurozone, and Japan. These are surveys sent to private companies that help measure business activity. A reading above 50 generally signals growth, while a reading…

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