Daily Commentary

MarketMinder’s View: “The [eurozone flash] Composite Purchasing Managers’ Index compiled by S&P Global increased to 53.1 from 52 in August, well above the 50 threshold separating growth from contraction. Analysts in a Bloomberg survey had anticipated a small decline to 51.7. The region’s two largest economies both exceeded expectations, with activity in Germany growing at the fastest pace since October 2025 and France unexpectedly expanding at the quickest in more than two years. ... The euro-area economy is showing greater resilience than expected to the Middle East conflict and the resulting jump in energy costs.” After French and German services’ August contractions, both returned to growth, adding evidence ongoing Ukrainian and Iranian conflicts, inflation and rate hikes aren’t hammering business activity. Yet despite the proverbial proof in the pudding, the article laments: “How long it can resist such headwinds remains uncertain ...” This is bullish! The “yeah, but” interpretation signals a wide gap between reality and sentiment continuing to linger despite the evidence, indicating plenty of positive surprise potential ahead for stocks.

MarketMinder’s View: Not saying anything new, “The Paris-based Organisation for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF) and the International Institute of Finance (IIF), the voice of global banking, on Wednesday highlighted the dangers of soaring interest rates on $365tn (£275tn) in global borrowing.” But as we recently pointed out (combining the IIF’s debt and IMF’s GDP figures), global debt-to-GDP was 326% of GDP in 2020—far higher than the 290% now. Global debt could rise another $46 trillion and still not reach that highwater mark—which wasn’t catastrophic then. Not that ever-rising debt is great, but it isn’t necessarily problematic if issuers’ revenues (and GDP generating those revenues) comfortably cover debt costs, which remains the case across the developed world today.

MarketMinder’s View: In the UK, “A record 48pc of homeowners sold at a real-terms loss in England and Wales over the year to July – an even higher share than in the aftermath of the 2008 financial crisis. Flats were more likely to be loss-making than any other property type, Telegraph analysis of Land Registry transactions data found. Three quarters (76pc) of flat or maisonette sellers lost money, compared with 42pc of those selling detached houses. Sluggish house price growth and high inflation since the pandemic have made it increasingly difficult for sellers to make a meaningful profit.” Now, some (like those selling detached houses) remain ahead of inflation, but that underscores the difficulties of diversification in real estate—not to mention illiquidity and other costs (taxes, insurance, upkeep and repairs) that can weigh on returns. A house is great to live in, but when it comes to investing, real estate isn’t as failsafe as many presume. To generate long-term growth, stocks are a more beneficial asset in our experience, with better liquidity and capacity for global diversification, alongside a proven record of strong historical returns despite occasional short-term negativity along the way. For more, please see our 2017 commentary, “The Path to Wealth Isn’t Through Homeownership.”