Daily Commentary

MarketMinder’s View: Here again, this touches on politics in France, so please note we favor no party nor any politician, assessing developments solely for their potential market and/or economic effects. It seems—seems—as if a government may be taking shape in France now, as Prime Minister Sébastien Lecornu’s second attempt to win a confidence vote and pass a budget may be bearing fruit. However, in order to win the center-left Socialist Party’s support and survive a confidence vote, the centrist Lecornu had to promise to ditch a planned pension reform that would lift the French retirement age from 62 to 64 until after 2027’s presidential election, as well as to reject the use of constitutional provisions that allowed the government to subvert parliament in implementing a budget. Lecornu’s premiership still isn’t assured to last, but this is a large step toward forming that government.

MarketMinder’s View: Obviously some politics here, so please keep in mind that we favor no politician nor any party and are interested solely in the economic and market effects of the policy here. After Friday’s sharp selloff on President Donald Trump’s threats to hit China with an additional 100 percentage points of tariffs, many have been waiting to see if the threats will materialize into an executive order. That has not happened as of yet, and the talk here may be why. It seems the administration is using the threat as a negotiating ploy to try and get China to walk back its rare-earths export restrictions, which were also likely a negotiating ploy. It is all a matter worth watching, but be patient: A “sell-first, question later” mentality has already proven counterproductive on tariffs and tariff threats this year—and that may be the case once more here.

MarketMinder’s View: When a bubble is actually inflating, most people don’t see it as such, which is why they buy in. Instead, they see a new paradigm of permanently sunlit uplands. So the fact that the latest Bank of America Global Fund Manager Survey shows many proclaim AI a bubble is counterintuitive evidence skepticism remains. “About 54% of participants in the October poll indicated tech stocks were looking too expensive, an about-turn from last month when nearly half had dismissed those concerns. Fears that global stocks were overvalued also hit a peak in the latest survey.” Now, we do think there is burgeoning optimism around stocks, and particularly AI stocks—and that is worth watching. But we think it is premature to consider this a bubble now, given the ubiquity of bubble fears and the fact these companies are largely very profitable, growing fast and self-financing expansion via cash (not debt or equity issuance).