Daily Commentary

MarketMinder’s View: Are you (or anyone you know) age 50 or older and looking to top up your 401(k) as you near retirement? If so, here is some news you can use! For people whose income tops $150,000, all catch-up contributions must go into a Roth 401(k). That means they won’t be tax-deductible now, but they still aren’t subject to capital gains tax as they grow, and eventual withdrawals won’t face income tax. This new rule comes from the SECURE 2.0 Act, and it takes effect this year after a two-year delay to give plan managers sufficient time to prepare. And the amounts in question are pretty generous: “In 2026, those older employees can contribute as much as $8,000 over the standard $24,500 cap. That means they can put away a total of $32,500. … If you are age 60 to 63, your catch-up limit is higher. Your extra contribution can be up to $11,250 in 2026, meaning your total contribution can be as much as $35,750. At age 64, this enhanced or ‘super’ catch-up option no longer applies and you revert to the usual catch-up amount.” These provisions apply also to 403(b) plans and 457(b) plans but not to individual retirement accounts (IRAs). So if you are in this demographic, check your income and tax status and plan accordingly, especially if you have been making tax-deferred catch-up contributions until now. The switch to Roth contributions may affect your cash flow and tax bill next April, and you will want to ensure all your ducks are in a row with your employer’s plan as you make contributions this year.

MarketMinder’s View: UK retail sales ended 2025 on a strong note, with sales volumes rising 0.4% m/m in December to snap a two-month slide. Even better, it smashed expectations for a -0.1% m/m drop. And it all happened in the wake of November’s Budget, which was allegedly going to further sap consumer confidence and retail spending. Instead, it looks like pre-Budget uncertainty weighed on confidence and activity in the run-up, while getting clarity unleashed both in the aftermath. Not that we are saying confidence drives or predicts sales—their relationship is loosely coincident at best—but it shows how even if fiscal policy isn’t what people want or consider a net benefit, simply knowing the lay of the land can help folks move on. And crucially, that is true of markets as well as the economy, and UK stocks have continued doing fine since Budget day. Oh and we say all this from a neutral, nonpartisan standpoint, preferring no party nor any politician and assessing developments for their potential economic and market implications only.

MarketMinder’s View: While this piece goes a little far down one particular rabbit hole, it does an overall fine job of contrasting European natural gas prices’ latest spike with their monstrous run in 2022—and showing why this probably isn’t a repeat of that crisis. “Back in 2022, prices skyrocketed to more than €300 per megawatt hour (MWh), roughly 10 times the historical average of €20–€30 per MWh. They then stayed that way for months as Russian supplies shut down and Europe was forced to scramble to find new sources of gas. The recent rise saw TTF prices – the benchmark for Europe – hit a peak of €40 (£34.8) per MWh – up from €27 on Jan 9.” Why the difference? Today, Europe doesn’t face the risk of a prolonged shortage, but rather a temporary supply disruption tied to the arctic blast about to hit much of the US. This is causing US gas prices to spike on concerns that the freeze will juice demand while temporarily idling production. Given the US is now a major gas supplier to Europe, this risks a temporary supply shortage there, too, if export terminals close temporarily. As the article explains, it is a temporary production hiccup amid a broader supply glut. Now, where we think this goes too far is in pinning higher prices partly on commodity traders, which perpetuates the impression that speculators drive prices higher or cause volatility at everyone’s expense. Actually, the opposite is true. Their trades add liquidity to the marketplace, improving price discovery. And while some traders do book profits, a lot don’t, and those profits can come from shorting the market as well as positioning for rises. All add liquidity. This isn’t just theory. Onions have been legally banned from futures trading for half a century and our research shows they are far more volatile than comparable commodities.