Daily Commentary

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.

MarketMinder’s View: As this features prospective legislation, please keep in mind MarketMinder is nonpartisan, preferring no party, politician or policy over any other, as we seek only to ascertain potential bills’ likely economic, market and personal finance ramifications—if any. To cap credit card rates at 10% (for one year), President Donald Trump needs congressional approval for the idea to become law, so we think Trump asking Congress to implement his proposal simply acknowledges this reality. As for whether Congress will go along is another matter, as explored here: “The path through Congress is still uncertain, [people familiar with the matter] said, asking not to be named discussing non-public information. Such a measure would require widespread congressional support. Last week, Senate Majority Leader John Thune said capping the rates ‘would probably deprive an awful lot of people of access to credit around the country.’ House Speaker Mike Johnson, a Republican from Louisiana, said it would take work to resolve differences over the proposal.” Look, anything can happen, but we find “widespread congressional support” among the rarest phenomena on earth. And past precedent with prior bills that made waves only to die on the vine—due in part to vested interests (e.g., banks and payment firms, which are “no strangers to Capitol Hill”)—suggests a similar fate. With midterm electioneering ramping up, we see measures like this more as campaign pledges than anything concrete—efforts to get the vote out. For more on how stocks view such seemingly popular legislation, please see today’s commentary, “A Market Lesson From Trump’s Credit Card Proposals.”