Daily Commentary

MarketMinder’s View: This analysis veers into politics and sociology and mentions several companies, so a friendly reminder: Our interest is with the market discussion only, and MarketMinder doesn’t make individual security recommendations. The primary argument here is that widely followed valuation metrics (e.g., the forward price-to-earnings [P/E] ratio and corporate profits as a share of GDP) indicate earnings aren’t sustainable—implying volatility (or worse) lies ahead. As described here, earnings are “… sustained by capital spending to finance the artificial intelligence boom, fiscal stimulus in the form of a 6% budget deficit and households dipping into savings to maintain the level of spending to which they have become accustomed—none of which can go on in perpetuity.” It claims the AI boom itself is overstated since capital spending shows up immediately as vendors’ revenues but gets expensed gradually by the investing firm, keeping reported costs artificially low. It further argues that with profits so high relative to GDP, it is only a matter of time before societal backlash chops them down to size via higher taxes and the like, sparking further economic damage. We aren’t in the business of predicting short-term volatility, but we disagree these three pillars alone are holding up the bull market. Yes, AI has been the dominant investment theme this year, but Corporate America’s strength is broad-based and has been for a while. The earnings boom’s accounting implications are widely known, sapping potential negative surprise power, and expanding topline growth is an underappreciated counterpoint to the alleged accounting falsehoods surrounding profit reporting. The notion government welfare programs are holding up “tapped out” consumers overlooks how US households overall are in much better shape than they get credit for. And as for the purported political risks, these conversations aren’t new, and markets move on the gap between expectations and reality. Abundant chatter helps reduce expectations, raising positive surprise potential. That false fears still receive plenty of attention suggests the bull market has plenty of bricks in the proverbial wall of worry to overcome.

MarketMinder’s View: Everything old is new again. A few months after the Brexit vote celebrated its 10-year anniversary, Prime Minister Andy Burnham used his Labour conference speech to announce his intention to, “… start a debate on that future relationship [with the EU] around the time of an EU-UK summit, expected in November, and try to find a ‘consensus’ on the best way forward.” This piece runs through several paths the UK’s relationship with Brussels could take, from muddling along and “improving relations on a piecemeal basis” to joining a customs union, reupping with the single market, creating a bespoke agreement, or outright rejoining the EU. How Burnham could steer the debate remains to be seen (could we see another referendum?), but this article shares some helpful insight about UK voters’ appetite for closer EU ties. “A YouGov survey in June found that 59 per cent of British voters wanted to rejoin the EU, with only 32 per cent opposed. However, in the same poll, 73 per cent of voters said they wanted a closer relationship with the EU without rejoining a customs union, single market or the EU itself: that essentially aligns with [former PM Keir] Starmer’s approach.” That voters themselves are all over the place on this issue speaks to the lack of consensus—which politicians are sensitive to (lest they risk alienating their constituents before the next general election). For investors, we caution against presuming a Brexit reversal is probable at this point—this all seems more like politicking than a market driver. Little here is likely to move quickly enough to surprise markets either way. For more, see our June commentary, “Today in Brexit, Day 3,652: Brexit Turns 10.”

MarketMinder’s View: Before discussing the titular investment, a little recent history: The US and South Korea first announced a framework agreement in July 2025. Details were scant, and they have rolled out slowly since then (e.g., in November 2025, both sides released a “Joint Fact Sheet” highlighting key terms). Well folks, it is October 2026, and specifics are still dripping out. President Donald Trump said South Korea will invest $200 billion in a liquified natural gas (LNG) project in Alaska … right? Well, hold your horses, cowboy. “South Korea on Thursday confirmed that the plans for the Texas natural gas power facility, which will supply power to AI data centers, would proceed. It also confirmed plans to invest $120 billion to build eight nuclear reactors. But it said it had not yet decided on the Alaska LNG project, which South Korea said would be ‘considered on the condition that it is commercially viable and subject to relevant domestic legal procedures.’” As the article further explains, South Korean officials hoped the investment announcement would spur other discussions (e.g., on security). This is why we suggested investors temper their expectations when the White House announced a litany of trade pacts in August last year. Parties can make a deal to talk about a deal, but hashing out the specifics takes time. Not that markets are waiting for finalized agreements—they have long since recognized that US tariffs, while a negative, don’t pack the immediate punch to derail stocks. For more on trade, see this week’s commentary, “A World Trade Check-In Starring Southeast Asia.”