Daily Commentary

MarketMinder’s View: The fear discussed here: US households are using more of their incomes to finance spending and the savings rate is falling. The upshot: “This can’t go on much longer; consumers will eventually pull back on their spending, probably sooner rather than later. This is no small matter for the economy, given that consumption accounts for two-thirds of gross domestic product.” If you look at the charts shared within, they do look worrisome—but as they go back only to June 2023, they don’t provide a complete picture. For instance, yes, savings as a percentage of disposable income is low relative to the past two and a half years. But according to the St. Louis Federal Reserve, this ratio is right around levels from the mid-2010s and above the mid-2000s. So, not exactly a screaming warning sign to us, and that is setting aside the many flaws with the calculation itself (chiefly, that it omits retirement savings). The back half of the article frets over waning US consumer sentiment and warns persistent headwinds, including sticky inflation and high interest rates, will stretch household finances. To us, these lingering concerns are evidence that while US sentiment overall has warmed up, it remains pre-euphoric—skepticism hasn’t gone away completely.

MarketMinder’s View: There is obviously a lot of politics here, so please bear in mind we prefer no politician nor any party and assess developments for their potential economic and market implications only. And when we critique articles in this sphere, we focus on the market- and economy-related pieces of the argument. All the rest is sociology, which markets look past. So in that vein, we agree the Trump administration’s tariffs and trade threats on America’s commercial partners are an economic negative, hurting the imposer more than its targets—one reason US stocks underperformed non-US markets last year (which has continued year to date in 2026, per FactSet). Yet as this article also points out, “The power of the American economy makes it tough to dent, nevermind topple. The ‘sell America’ trade last year fizzled, and stock indexes reached new record highs just last week.” So while non-US stocks outperform, US stocks can still do well in absolute terms as reality keeps beating expectations. We have numerous problems, though, with the article’s alleged risks to America’s safe-haven status. First, the dollar isn’t going anywhere any time soon. Not because the US is forcing the rest of the world to use it, but because of its convenience as the most liquid currency to trade in, with the most abundant supply of reserve assets. Part and parcel of that: Treasurys—the world’s deepest bond market. Yes, America services a “high level of debt,” but that is because its credit is rock solid—which is why there is plenty of demand for it. Same with Corporate America’s debt for that matter. As for the claim high stock valuations signal a market especially vulnerable to these risks, high price-to-earnings ratios are a nothingburger since past prices aren’t predictive, especially the very backward-looking (and bizarrely inflation-adjusted) Shiller P/E. All these false fears show there is plenty of room for US stocks to keep running up the wall of worry.

MarketMinder’s View: Here is a useful look into China’s ongoing—and underappreciated—transition to a services-based economy. “Leaders have vowed to ‘invest in people’ by boosting spending on education, healthcare and social security—a signal of stronger support for families and a push to lift household spending power. Chinese households are channelling more spending into services—from elderly care to travel and entertainment—as demand for big-ticket goods plateaus. ... Services sales climbed 5.5% in 2025, higher than the 3.7% growth for goods. Per-capita services consumption reached 46.1% of total spending in 2025, up from 40.3% in 2014 when official data first became available. China’s household consumption is about 20 percentage points of GDP below the global average, while its investment share is roughly 20 points higher.” This suggests the shift toward a services-led consumption model is likely to take some time, especially when you consider the US’s two-thirds services share of consumer spending, which itself is 69% of GDP (per the US Bureau of Economic Analysis). We see a couple takeaways for investors from this. One, fears over China’s falling fixed asset investment (FAI)—negative for the first time last year (outside 2020’s pandemic lockdown)—are overblown. Not only did Chinese GDP keep growing overall (helped by services), but the FAI downturn looks deliberate. As the article notes, Beijing is trying to “wean itself off a traditional dependence on big-ticket investment and exports.” Two, services’ gaining share likely increases China’s economic resilience. Though services aren’t immune to business cycles, they are more sustainable drivers of economic growth than subsidized infrastructure and factory development, as the experience of most developed world economies demonstrates. Yet Chinese hard-landing fears persist, indicating to us steadier growth in the world’s second-largest economy has the power to surprise many on the upside.