Daily Commentary

Economic doom and gloom have peppered financial headlines this year, but some underappreciated transatlantic rays of optimism keep shining. Following America’s report earlier last week, August retail sales out of the UK and Canada also pointed positively. While just one month, these figures are further evidence of economic resilience out of the developed world. UK Retail Sales Warmed This Summer UK retail sales volumes registered their third-straight positive month in August, climbing 0.5% m/m and doubling expectations of 0.25%.[i] Clothing stores, butchers and bakers and non-store retailing contributed most, which some businesses attributed to good August weather.[ii] Taking a step back, retail sales volumes were down -0.1% in the three months to August when compared to the same period through May.[iii] Yes, that is a slight contraction, but it is also an improvement from the -0.7% in the three months to July compared to the same period through April.[iv] From an even longer view, UK sales volumes rose 0.7% y/y.[v] These results aren’t robust, but considering most presumed tariffs and payroll tax hikes would weigh on the UK economy, that fear has yet to manifest in data. On Canada’s Retail Sales’ Summertime Swings On Canada, we will start with the bad news: July retail sales fell -0.8% m/m (both in value and volume terms), the worst start to a Q3 in three years.[vi] Of the nine subsectors, only motor vehicle and parts dealers contributed—the eight others, led by food and beverage retailers, detracted.[vii] Positively, however, an advance estimate revealed August retail sales rose 1.0% m/m.[viii] Granted, this release shares only the headline number—it lacks subsector details—and is based on about 50% of surveyed companies.[ix] The average final response rate is close to 90%, so the next, more complete estimate may differ from this early report. But when taking July’s -0.8% slip with August’s apparent solid ...

Every now and then, a policy idea comes along that is so bipartisan even presidents with otherwise opposing views say it would be a big win. One is in the headlines now, with President Donald Trump throwing his support behind an upstart stock exchange’s push to get the SEC to reduce earnings reporting requirements for US companies from quarterly to semiannual. Former President Barack Obama also raised this issue when he was in office, and people universally seem to agree it would reduce compliance costs and make it a little easier to be a publicly traded company—perhaps arresting the US’s long-running decline in listed firms. To us, it seems like an overall benign idea whose potential benefits are probably overstated. The decline in the number of publicly traded companies is a conundrum politicians have been trying to solve for many years, and it is easy to understand why. In 1998, according to Finaeon, the Wilshire 5000—which aims to capture every publicly traded US company—had 7,562 companies.[i] Now it holds only around 3,500, less than half the peak.[ii] This gives the perception of investors having fewer opportunities to participate in American capitalism’s big rewards (we will get to this shortly). And most everyone agrees cumbersome compliance requirements are why. Not just earnings reporting requirements, but all the I-dotting and T-crossing that goes into them, as well as myriad disclosure requirements and the criminal penalties for inaccuracy that 2002’s Sarbanes-Oxley Act introduced. Past administrations have tried to address this. Most notably, 2012’s Jumpstart Our Business Startups (JOBS) act relaxed disclosure requirements for certain fast-growing startups to make it easier for them to go public. That helped in theory, but it applied only to issuers with annual gross revenues below $1 billion, rendering it small in scope and leaving hurdles intact as companies grew. The boom in special purpose acquisition ...

They did it! As near-universally expected, the Fed just cut its fed-funds target range by a quarter percentage point, bringing it down to 4.00% - 4.25%, the fourth cut in this “cycle” after a nine month pause. Most observers either highlighted the oddity of this meeting’s particulars or saw the move as critical for stocks and the US economy. Folks, some news: While this cut is fine and dandy—we don’t object to it at all—the effects are far smaller than most tout. Let us explain. Yes, this latest cut does bring the full cycle’s (if something on hold for nine months can still be considered a cycle) to 1.25 percentage points. And traders are penciling in two more by yearend. Maybe those happen! Maybe there will be more! The Fed’s generally useless dot plot of future rates matches traders’ expectations for two more 2025 cuts, and the median look-ahead is for a couple more by yearend 2026. But today’s rates are already where the Fed projected in June and December, according to the central tendency in those forecasts. And consider 2022: Fed forward guidance early that year argued for no hikes and looking through “transitory” inflation pressures. As you likely know, that misguidance didn’t hold—the Fed embarked on a steep hike cycle soon thereafter. So you can’t really know what the Fed will do from here. They are people, swayed by biased interpretations of incoming data. And that was true well before the odd optics around this meeting emerged, which saw one Fed Governor (Lisa Cook) attend a meeting the Trump administration tried to bar her from while the president’s temporary nominee (Stephen Miran) rushed to join via appointment to an unrelated opening. Pundits were already handwringing over dissention and a lack of uniformity at July’s meeting. But is groupthink really preferable to a diversity of opinions? We don’t think so. And, unsurprisingly, there was less ...

Editors’ note: MarketMinder favors no party nor any politician. Our analysis solely assesses developments’ potential economic and/or market effects—or lack thereof. Last week, the Congressional Budget Office (CBO) unveiled its best guess about US population growth over the next three decades. Its conclusion: The population will flatline by 2050, as American inhabitants’ numbers will be smaller and grow more slowly than in its January projection.[i] Partly as a result, the CBO expects higher inflation, lower employment, possible labor shortages and slower economic growth.[ii] Sounds bad! Financial publications predictably jumped on these findings, warning they present an “economic red flag.”[iii] But we don’t think the population outlook really presents a clear and present danger to the US economy or investors. Remember folks, forecasts are only ever opinions—especially long-range ones. And, even if this proves right on population trends, the conclusions drawn are questionable at best. First off, what is the CBO projecting (in)exactly?[iv] It pencils in a population increase from 350 million this year to 367 million in 2055. This would be -5.4 million fewer than what it thought in January based mainly on lower projected immigration tied partly to Congress’s July 4 passage of the One Big, Beautiful Bill Act. Like the CBO, we are nonpartisan. Our sole interest here: What economic effects would 367 million people in 2055 have versus 372-ish million? The population would still grow, just somewhat slower. But before lugging in all the assumptions—e.g., labor force participation, people’s productivity, technological advancements and money supply growth over the next 30 years—to render a verdict on the economic effects, ask yourself: How solid is the CBO’s (recently revised) population projection to begin with? The CBO is America’s official budget scorekeeper, so its pronouncements seemingly ...

August is usually just the proverbial dog days of summer, when everything feels too hot and we all start hankering for those first whiffs of September cool. This year, it was a little more than that: the first month with all of the Liberation Day tariffs in effect. And now we have the first big economic data releases showing how things went. Overall, they were fine. Stocks have already moved on, but together, the US retail sales and industrial production reports help show what markets were pricing in as they rallied from April’s lows. Retail sales were particularly strong, rising 0.6% m/m.[i] This was the third straight monthly rise, and this time, it wasn’t all about auto sales. Those actually slowed from 1.9% m/m in July to 0.4% as the frenzy to buy before tariffs lift prices when model-year 2026 vehicles hit the lot died down.[ii] Sales excluding autos accelerated from 0.4% m/m in July to 0.7%.[iii] And the increase was broad based by reporting industry. Now, retail sales figures aren’t inflation-adjusted, so we can’t know from these data alone whether Americans bought more in volume terms in August. That will have to wait for the Bureau of Economic Analysis’s Personal Consumption Expenditures report, which hits late this month. But as a rough snapshot of what people spent on goods and food services, this is an encouraging report. There is a lot of evidence that when tariff chatter started escalating, folks raced to make purchases before tariffs got embedded in prices. That created a bit of a pothole midyear, which is normal when an expected event pulls demand forward. But now there is mounting evidence the US economy is moving further down the road. And crucially, demand held up even as reciprocal tariffs took effect in early August. While these probably haven’t shown up immediately in prices, as companies still had pre-tariff inventory on hand, it wouldn’t have surprised us if simply knowing tariffs were in place gave ...

Not broken but “stuck.” That is how a Treasury spokesperson described the UK economy after GDP flatlined in July. With output flagging, many are calling for UK Chancellor of the Exchequer Rachel Reeves to refrain from tax increases in the autumn Budget. We won’t try to predict potential policy (nor do we think “help” or tax hikes are actually needed). Rather, our takeaway is that July monthly GDP extends existing trends—and puts growth in line with expectations earlier this year. The dour reaction indicates how low expectations for the UK are right now, and it likely won’t take much to positively surprise. Monthly GDP slowed to a standstill in July (0.0% m/m) after June’s 0.4% growth.[i] While services (0.1% m/m) and construction (0.2%) both grew, production contracted sharply (-0.9%) as manufacturing fell -1.3%.[ii] Taking a step back, real GDP grew 0.2% in three months to July, prolonging a slowdown that started in April.[iii] So, GDP does appear to have hit a summertime slow patch. Looking under the hood, July manufacturing weakness centered on two industries: computer, electronic & optical products (-7.0% m/m) and basic pharmaceutical products and pharmaceutical preparations (-4.5%).[iv] Unsurprisingly, many blamed tariffs—which is somewhat logical. Manufacturing weakness isn’t solely a UK phenomenon, as factories worldwide frontran potential US tariff implementation. Computer, electronic and optical product manufacturing this year hints at this bounciness. The category soared 9.8% m/m in February, when tariff chatter began to pick up, followed by a -8.5% drop in March.[v] After some minor dips in April and May, this subsector jumped 8.8% in June—right as the US – UK trade deal came into force at the end of the month—before sliding -7.0% in July.[vi] But blaming tariffs oversimplifies UK manufacturing’s headwinds. The Pharmaceutical industry’s recent struggles seemingly ...

Editors’ note: MarketMinder is nonpartisan, favoring no party nor any politician, and assesses political developments solely for their potential effects on the economy, markets and personal finances. France’s new political revolving door turned again Monday—curiously coinciding with Japan’s. French Prime Minister (PM) François Bayrou and his minority government lost a no-confidence vote, fanning fears around France’s 2026 budget and federal debt. While President Emmanuel Macron ruled out a snap election, tapping Sébastien Lecornu as PM Tuesday, budget concerns linger amid a fractured French legislature. As public frustrations rise, which fiery protests Wednesday illustrate, we think scale and perspective provide valuable insight. Political uncertainty isn’t great, but French markets are very used to it … and to faulty debt concerns. Both bullishly keep sentiment toward the country’s stocks low, facilitating positive surprise. Mind you, Monday’s outcome was widely expected. Bayrou narrowly survived a separate no-confidence vote in July, but he never gained budget support from the populist National Rally, the Greens or the center-left Socialists, whose vote he needed to survive. The latter even hinted at toppling him this month, so the shock factor here is limited. Lecornu offers a fresh face, but an uphill battle in passing the 2026 budget through a fractured parliament remains. And, like Bayrou, he lacks common ground with France’s parties. Lecornu is a member of Macron’s centrist Renaissance (RE) party, whose austerity-focused budget proposals have proven broadly unpopular. With RE holding 26% of the seats, they need help to advance anything through a deeply gridlocked parliament.[i] That probably won’t come easily. The National Rally and center-right Les Républicains are targeting various government spending cuts and lower taxes while the leftist New Popular Front has ...

Is stagflation setting in? That question seems to be on many minds, at least per the coverage of Thursday’s US economic data releases, which showed weekly jobless claims hitting their highest level since 2021 and the Consumer Price Index (CPI) inflation rate accelerating to 2.9% y/y in August from 2.7% in July.[i] The implication: With prices heating up and businesses cutting back, the US economy is entering a maddening stretch where growth can’t help households overcome the pain of fast-rising prices. But this looks rather hasty once you dive past surface narratives. The US economy isn’t headwind-free, but stagflation chatter looks like a false fear—a brick in this bull market’s wall of worry. For a general claim to be true, it has to hold up when you look at the data in context. Now, where jobless claims are concerned, noting that 263,000 new claims last week is the highest since October 2021 might seem like context.[ii] The vision it creates—that people are getting laid off at the same rate they were during the pandemic—might seem to support the case for things turning bad now. But there are a couple problems with this approach. One, “highest since” or “worst since” type claims don’t really tell you anything, since the comparison point is inherently arbitrary. Two, October 2021 is at the tail end of a post-lockdown job market recovery, a return to general job market stability. Heck, we recall everyone saying things were rocking and rolling then, as a hot jobs market was enabling a “great resignation” where people were free to quit the daily grind, relocate to their dream ZIP code and instantly find a better job at higher pay. That always seemed far-fetched to us, but it is odd now that those consuming economic news are implicitly encouraged to see this as a bad comparison point when cheer reigned in labor markets then. We think a better way to get context is to look at a reading ...

Warning: This article is about tariffs. But don’t worry, it isn’t about tariff politics, and the politician mentioned isn’t the one you will expect. You see, the US’s new tariffs claimed their first high-profile takedown Wednesday, and it illustrates their economic and market effects in a nutshell. Back in 2017, an art school graduate and mother of four was excited. Her husband had just stepped down from the extremely high-profile and taxing job of running a country, giving her an opportunity to do something she had long fancied: start a small clothing label. She had worked in fashion, knew the industry and knew what a nightmare it could be for women seeking smart, financially attainable office and daytime attire with a stylish edge. As a creative, artsy sort, she had ideas. And as a woman in the public eye with substantial means at her disposal, she had the resources to give it a go. And so Samantha Cameron, wife of former UK Prime Minister David, launched her fashion label, Cefinn—named after their children. Friends, it was a hit, with appeal crossing class and party lines. Members of the royal family, TV presenters and everyday women found stylish, flattering, well-cut wardrobe staples. Sales were strong, and Cefinn joined a small coterie of independent, female-founded, fast-rising UK clothing brands.[i] As fashion conglomerates sank deeper into a group-thinky malaise of unimaginative, low-quality duds, these independent labels, which largely remain under individual ownership, made things people would actually wear year-in, year-out and feel good in. They quickly found an eager customer base in the US, where women were equally tired of fast-fashion and unwearable “luxury” offerings. People were happy to pay up for high-quality pieces that would have a low cost-per-wear over several years of life. And so sales grew and Cefinn thrived, a staple from offices to television to the Royal Box at Wimbledon. SamCam, as journalists ...

Editors’ note: MarketMinder is nonpartisan, preferring no party nor any politician, and covers politics solely to assess its potential market implications. Japanese Prime Minister Shigeru Ishiba resigned on Sunday, about a year after he assumed the role. Thus, Japan’s rapid rotation of premiers since the late Shinzo Abe left office in 2020 continued. For markets, it was anything but shocking. Out of the gate last year, Ishiba lost his Liberal Democratic Party’s (LDP’s) lower-house majority after he called snap elections attempting to consolidate power. Since then, Japan has had a minority government, with speculation swirling throughout his time would be up before too long if he couldn’t pull his—and the LDP’s—popularity up. So when the LDP lost its upper-house majority in July—the first time the LDP was ever relegated to a minority in both chambers—the writing appeared to be on the wall for Ishiba. It seemed just a matter of when he would step down ... not if. Most political observers thought it would come after securing a US-Japan trade deal. In that way, it looks like Ishiba’s resignation went according to script, considering he and US President Donald Trump agreed on the deal’s loose ends—notably, lowering auto tariffs to 15%—last Thursday. Next up: The LDP will hold a party leadership contest on October 4. The winner will assume Japan’s premiership—replaying 2024, when Ishiba’s predecessor, Fumio Kishida, resigned following fallout from a political fundraising scandal the LDP has yet to recover from. Frontrunners to take Ishiba’s post include former Economic Security Ministers Sanae Takaichi (2024’s runner-up) and Takayuki Kobayashi, Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi, Chief Cabinet Secretary Yoshimasa Hayashi and former LDP Secretary General Toshimitsu Motegi—all well-known names who ran in last year’s ...

US job growth slowed again in August, and many think a Fed rate cut next week is now all but assured. We won’t go that far, as central bankers’ actions defy prediction. But August’s jobs numbers do appear to provide further evidence of the negative economic fallout tied to tariffs and the associated uncertainty this past spring. This isn’t new information to forward-looking stocks, but understanding why the data are weak can help investors see how economic reality aligns with expectations—crucial to success in investing. August nonfarm payrolls rose by 22,000, slowing sharply from July’s 79,000 and well short of expectations of 76,500, while the unemployment rate (4.3% from July’s 4.2%) matched forecasts.[i] Notable revisions to July and June’s results grabbed some attention. While the Bureau of Labor Statistics (BLS) revised July nonfarm payrolls’ gain upward (from 73,000 to 79,000), June’s figures flipped to contraction (from 14,000 to -13,000)—the first negative month since December 2020.[ii] That June slip, combined with weak August results, prompted plenty of dour commentary. Many analysts think the tepid showing means the Fed will lower rates by at least a quarter point later this month—and some speculate whether a half-point cut is on the table. Call a spade a spade: August’s jobs numbers weren’t great. They add to a lackluster streak that appears to have extended to last year. Per its annual review released today, the BLS revised nonfarm employment down by -911,000 in the period from March 2024 – March 2025 as the agency updated its survey-based results with more comprehensive figures from state unemployment office records.[iii] This annual benchmark revision is a standard practice, and this was only the preliminary version. It will be revised again early next year and could swing back up, as happened with the final benchmark revision for 2023 – 2024. Still, this ...

Some things make us happy when they are routinely in headlines, like great tennis matches and the drama of football season. But when it is a flurry of investor scams, that is the reverse. So it is disheartening to see that, in the last week alone, headlines brought us an unsealed indictment revealing the principal behind an alleged Ponzi scheme uncovered by Wall Street Journal reporting last year has been charged with securities and wire fraud. There is also a Florida man who was just charged for peddling fraudulent real estate investments. Rounding out the herd, prosecutors are reportedly investigating a company selling bogus tax breaks. Tragically, people continue falling for these schemes, losing piles of money in the process. So let us review these latest scams for their common threads and red flags. We start with the operation the Journal brought to light: the tandem of Yield Wealth and Next Level Holdings. These affiliated outfits advertised “Mega High-Yield Term Deposits,” which they claimed could guarantee returns up to 15%, with principal and interest fully insured, an echo of R. Allen Stanford’s high-yield CDs in the early 2000s.[i] In this case, the accused claimed to generate high returns with no risk by securitizing Affordable Care Act insurance policies—think of a mortgage-backed security, only with health care policies generating the return instead of mortgage loans. The salespeople claimed these securities behaved like CDs and were fully guaranteed and insured by Lloyd’s of London, yet the fine print said they carried the possibility of “total loss.”[ii] The few hundred people who signed up transferred their IRAs and other retirement plans to the operation’s affiliated brokerage, and when Next Level and Yield suspended operations late last year, they got slips of paper. That theoretically entitles them to the proceeds of their investments, but federal prosecutors allege the principal blew it on a lavish ...

Everyone is talking about bond yields! And everyone is missing the obvious. There is a very easy way to cut through the cacophony of debt fears. Come along and see. Whenever long-term bond yields jump somewhat, as they have lately, we see a common error: narrow focus on individual issuers that fuels country-specific narratives. We see a lot of coverage linking higher US 30-year yields to concerns of budget turmoil if Uncle Sam has to pay back tariff revenue in a hurry after an appellate court upheld the Court of International Trade’s ruling the universal and reciprocal tariffs were illegal—as if US yields alone are spiking. Yet across the pond, UK 30-year yields are also up, and headlines are linking it to a cabinet reshuffle that allegedly implies austerity won’t feature heavily in October’s Budget. This, similarly, treats rising yields as a UK-specific phenomenon. Coverage of French yields’ spike does the same, continuing to take the finance minister’s comments about a potential IMF bailout out of context, spinning them into a debt crisis freakout.[i] And higher German yields, we are told, result from expectations for higher public spending. Four countries, four yield “spikes,” four allegedly domestic explanations. May we offer a different one? Bond markets are global. Developed-world yields are highly correlated. Yields are up in these nations because yields are up globally. Italy is newly the posterchild for European fiscal sanity, yet its 30-year yield is up almost 30 basis points over the past month. Spain’s is up, too, despite relative calm on the deficit front. And Canada’s. And Australia’s. See for yourself. Exhibit 1 shows several nations’ cumulative rise in 30-year yields since August 22, otherwise known as a week ago Friday. Exhibit 1: Around the World in 30-Year Yields Source: FactSet, as of 9/2/2025. Cumulative change in 30-year benchmark government bond yields, 8/22/2025 – ...

Editors’ note: MarketMinder is nonpartisan, favoring no party nor any politician, and assesses political developments solely for their potential effects on the economy, markets and personal finances. This year’s tariff saga took another turn late last Friday, as the US Court of Appeals for the Federal Circuit upheld the Court of International Trade’s May ruling declaring many of President Donald Trump’s tariffs illegally exceeded his presidential powers. The Court of Appeals, however, allowed the tariffs to stand through October 14 to give the US Supreme Court (SCOTUS) time to hear the case. Unsurprisingly, pundits have already begun speculating around the potential decision, with prediction markets even launching contracts. None of this will help you know how the Supremes will rule, which defies forecasting. But we can explore the potential effects of both outcomes—an affirmation of the lower courts’ rulings and an overturning. As a refresher, back in May, the US Court of International Trade (CIT) ruled Trump’s tariffs overstepped the presidential authority outlined in the International Emergency Economic Powers Act (IEEPA). Responding to a challenge from a small business (VOS Selections, later combined with several states), the CIT emphasized the Constitution grants Congress—not the president—power to impose tariffs unless it specifically delegated that authority. The Court said IEEPA didn’t do so. It also ruled the Trump administration’s justification for tariffs, like the stated goal of cracking down on fentanyl flowing into the US, didn’t directly address the declared emergency. This too, they ruled, was inconsistent with IEEPA. The CIT’s decision issued a permanent injunction blocking enforcement of Trump’s tariffs. But the administration immediately appealed. The US Court of Appeals issued a stay pending said appeal, keeping tariffs in place, and hearings opened ...

According to recent surveys, American consumers’ moods dimmed in August. Tariff-related concerns weighed on respondents’ outlooks, with many anticipating higher unemployment and accelerating inflation in the months ahead. But feelings don’t predict action—as the Bureau of Economic Analysis’ (BEA’s) latest “Personal Income and Outlays” report shows. How the latest PCE figures contrast with sentiment survey results illustrates the disconnect between the two—a bullish sign. Watch what consumers do, not what they say. July’s real (i.e., inflation-adjusted) personal consumption expenditures (PCE) rose 0.3% m/m, improving on June’s 0.1% and meeting expectations.[i] Services spending grew 0.1% m/m, matching June’s growth, while goods spending jumped 0.9% m/m thanks to new motor vehicles purchases (7.8%).[ii] Analysts naturally attributed this to tariff front-running, with consumers snapping up big-ticket items before it gets too late.[iii] For instance, automakers are largely waiting for new model year to embed tariffs in vehicle prices—a well-known factor customers are trying to beat. US shoppers may have also been taking advantage of promotions during some big online sales events.[iv] Still, the results show consumers aren’t exactly tapped. On the inflation front, July’s headline PCE Price index—the Fed’s preferred inflation measure—rose 2.6% y/y, also in line with consensus estimates.[v] Services prices (3.6% y/y) sped up from June’s 3.5% rate while goods prices slowed to 0.5% from June’s 0.6%.[vi] Looking beyond July, consumer spending has been bumpy this year. Some tariff frontrunning occurred in March, followed by a pothole in April and May—and spending may now be returning to pre-Liberation Day growth. (Exhibit 1) In contrast, the PCE price index hasn’t deviated much from its longer-running trend. (Exhibit 2) Exhibit 1: Real Personal ...