3 Things You Need to Know This Week | PMIs, Consumer Confidence, US Housing Market (May 4, 2026)
Fisher Investments' weekly market update covers three key topics: global PMI data showing business resilience despite the Iran conflict, record-low US consumer confidence and its disconnect from market reality, and weakness in the US housing market. The video argues that pessimistic sentiment creates bullish opportunities and that housing's economic influence is often overstated. Global stocks have recently hit all-time highs despite ongoing geopolitical concerns.
Summary
The video opens with a preview of Final April PMI data to be released by S&P Global for the US, UK, eurozone, and Japan. PMIs are highlighted as forward-looking indicators, contrasting with most economic data that reflects the past. The hosts note that April is the second month of PMI data since the start of 'this year's war in Iran,' and that March readings showed a resilient global economy with the eurozone's manufacturing PMI surging to 51.6—its strongest in three years. April flash PMIs for the US, UK, and Japan continued to show growth, though the eurozone's composite PMI declined due to a weaker services sector. The hosts caution against overreacting to short-term data wiggles, emphasizing that the overall trend and its comparison to expectations matter most for stocks. They argue that businesses are demonstrating underappreciated strength despite war-related concerns over oil, inflation, and supply chains.
The second segment focuses on University of Michigan consumer confidence data for May, due that Friday. April's reading of 49.8 was described as the weakest on record, continuing a pessimistic trend since February attributed to the Middle East conflict. The hosts draw comparisons to sentiment seen during the prior year's tariff-related correction and the 2022 bear market. They argue that low sentiment does not reliably reflect economic reality or predict future market performance, pointing out that global stocks have recently hit new all-time highs despite the war. The hosts frame low consumer sentiment as a potential bullish signal, reasoning that deeply pessimistic expectations create a larger gap for reality to positively surprise markets.
The third segment examines the US housing market ahead of Census Bureau data on new residential home sales for February and March. New single-family home sales fell 17.6% from December to January—the sharpest decline since 2013—and 2025 existing home sales totaled just over 4 million, the weakest since 1995. Despite these struggles, the hosts argue that housing plays a smaller role in the broader economy than commonly believed, with the service sector comprising over three-quarters of US GDP. They also contend that housing's prolonged weakness is well-known and widely discussed, limiting its ability to negatively surprise markets and thus reducing its threat to the current bull market.
Key Insights
- The hosts argue that the eurozone's manufacturing PMI surging to 51.6 in March—its strongest in three years—demonstrates underappreciated global economic resilience despite ongoing supply-chain disruptions from the war in Iran.
- The hosts contend that short-term wiggles in PMI data may grab headlines but are not unique during an ongoing bull market, and that the overall trend relative to expectations is what matters most for stocks.
- April's University of Michigan consumer confidence reading of 49.8 was described as the weakest on record, yet the hosts argue this pessimism is a bullish signal because markets thrive on the gap between low expectations and a better reality.
- The hosts point out that despite record-low consumer sentiment and the war in the Middle East, global stocks have recently hit new all-time highs, illustrating a significant disconnect between how people feel and how markets perform.
- The hosts argue that the housing sector's prolonged and widely-discussed weakness since the pandemic limits its 'surprise power' for stocks, reducing its potential to negatively impact the current bull market.
Topics
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