Daily Commentary

MarketMinder’s View: This is a straightforward writeup of Japan’s June trade data, which fell -0.5% y/y in value terms as the value of US-bound exports fell—a widely expected consequence of tariffs. The negativity concentrated in autos, but here is where it gets interesting: “Vehicle exports to the United States dropped 26.7 pct in value but rose 3.4 pct in volume. The figures indicate that Japanese automakers are shipping their vehicles to the U.S. market at reduced prices by absorbing costs from [President] Trump’s tariffs.” And total exports rose 2.5% y/y in volume terms, per Japan’s Customs office. Now, some of this discrepancy is probably discounting, but currency also likely helps, as the yen is still pretty darned weak—giving firms something of a buffer to cut prices in dollars without sacrificing much in the way of profits. So overall, despite what some headline data might indicate, thus far there isn’t much evidence US tariffs are a material economic headwind for Japan.

MarketMinder’s View: The titular bargain here is value stocks. And since this piece names numerous companies, please note MarketMinder doesn’t make individual security recommendations. We feature this for the broader argument that because large growth stocks (and particularly giant Tech) carry such high valuations relative to smaller companies, small cap’s day in the sun must be nigh. Look, we agree with the broader view that value stocks likely do better from here. But we don’t agree with the logic, and the distinction is important. If valuations mattered, then small value stocks would outperform always. This article notes, clearly, they haven’t. But it doesn’t go far enough, because it doesn’t explore the specifics of when and why large growth stocks generally lead and when small value stocks typically do better. Large, growth-oriented firms usually lead when economic growth slows and the yield curve is flatter, which can weigh on bank lending. This isn’t a problem for large companies with big global footprints, diverse revenue streams and big balance sheets they can leverage to borrow in capital markets. But it disadvantages smaller companies, which lean more on bank lending. A steeper yield curve, which boosts lending, is a tailwind for small value. The yield curve has steepened lately, particularly outside the US, which we think advantages value over growth. Some of the other points here may prove true, like the ultimate winners from AI perhaps being the creative users who base new products and services on it. But that is too far out in the future for markets to price now. Stocks look about 3 – 30 months out, and the steeper yield curve and generally lower sentiment toward small value in general are likely the primary drivers in the foreseeable future.

MarketMinder’s View: For all the excitement surrounding crypto recently—due in part to the Trump administration’s support for the industry and legislation wending its way through Congress—don’t overlook some persistent realities. Namely, fraud, criminal activity and money laundering still taint crypto, as the data highlighted here show. “The $1.5 billion hack of the exchange Bybit attributed to North Korea’s Lazarus Group has resulted in more funds being swiped from digital platforms already this year than in all of 2024. In total, $2.17 billion was stolen from crypto services and individual wallets through June, according to blockchain intelligence firm Chainalysis.” The article notes individual users make up nearly a quarter of all stolen funds, and these unfortunate folks don’t have much in terms of legal recourse given the lack of regulation in the space. Yet that is also crypto’s supposed appeal for many proponents. While we aren’t inherently against crypto and its ilk, it is the ultimate “buyer beware” asset. Long-term investors should think long and hard before diving in and make sure their reasons for doing so are a whole lot stronger than, “it has gone up a lot”—which is a terrible reason to buy anything.