Daily Commentary

MarketMinder’s View: With the increase in “alternative consumer lending” powered by nonbank lenders (aka private credit), this article worries unseen risks may be brewing. The concern is understandable, but a passage here helps debunk the fear: “Thus far, though, even broader measures of consumers’ health aren’t showing major weakness. Researchers at the Bank of America Institute, which analyzes anonymized bank data, found that while spending in October was growing more slowly year-over-year for lower-income households than wealthier ones, their checking and savings deposit balances remain above inflation-adjusted 2019 levels. Many consumers could also start seeing additional tax savings next year.” Though nontraditional lending may be less visible, private credit shops are still incentivized to do their due diligence when extending loans—after all, they don’t profit if loans aren’t repaid. Now, some bigger banks fund private lending, and those exposures could conceivably channel risks into the broader financial system. (As the article lists some specific names, please keep in mind MarketMinder doesn’t make individual security recommendations.) But while this introduces some uncertainty, markets seem to be taking this into account, too. “Even with limited or mixed signs of consumer weakness or broad credit weakening, shares of many companies in the lending business have trailed large banks this year, as measured by the KBW Nasdaq Bank index. ... Large managers of private-credit vehicles that could fund consumer lending ... have also lagged behind.” Private credit may be more opaque, but markets—and other interested parties—are aware of the credit dynamics driving their bottom lines.

MarketMinder’s View: This piece name drops a few individual stocks in its discussion of 2025 Initial Public Offering (IPO) activity and expectations for 2026, so please note MarketMinder doesn’t make individual security recommendations. Our interest here is more in the slight uptick in 2025 IPOs and the expectations for 2026, which are worth watching. Supply and demand for shares is always, at the highest level, what drives market movement. So you must factor in new issuance as a supply increase (a potential negative). To wit: “The 2025 haul would be a substantial increase over last year’s volume, but still well behind the $100 billion-plus years in 2020 and 2021 when easy money flowed during the Covid-19 pandemic. Few bankers are willing to predict a return to those levels next year, but they do see plenty of companies doing the lead-up work to go public in 2026.” That is worth watching, particularly since it is typical for IPO activity to pick up following strong returns, as firms try to capitalize on warmer sentiment and sell shares to the public at richer prices. Still, how IPOs are received matters, too. And in that vein: “The dismal debuts of StubHub Holdings Inc., Navan Inc. and Gemini Space Station Inc. have contributed to IPOs as an asset class underperforming the S&P 500 Index this year. That sits uneasily with the notion that companies that go public are supposed to have cheaper valuations than their listed peers.” So don’t rush to bearishness on the idea maybe IPO supply will jump.

MarketMinder’s View: The titular required withdrawals are, of course, required minimum distributions (RMDs) from traditional IRAs, which those 73 and older—and many beneficiaries who inherited an IRA—are legally required to take. Most must do so by December 31 or face penalties of up to 25% of the withdrawal’s value. Now, the data here are a little muddy, as they encompass only withdrawals from one custodian (Fidelity). RMDs weigh all traditional IRA assets, but you don’t need to draw from each account individually. So in theory, a person could fulfill their entire RMD from outside Fidelity, undercutting their tally. But still. There are 15 business days left in 2025. If you haven’t taken yours, we suggest getting that started now—especially if you are considering gifting your RMD to charity or taking a stock distribution to satisfy the amount.