Daily Commentary

MarketMinder’s View: Taiwan’s Q3 GDP easily topped expectations, largely on its key tech exports, like semiconductors. “Taiwan's gross domestic product grew 7.64% year-on-year in the July-September quarter, the Directorate General of Budget, Accounting and Statistics said on Friday. That surpassed the 6.0% forecast by economists in a Reuters poll, though slightly lagged the 8.01% growth rate in the second quarter. The better-than-expected growth will pave the way to raise the full-year forecast to more than 5%, the agency said, from a previous prediction of 4.45%. A formal unveiling of the final forecast for 2025 will come at the end of next month.” This highlights how exemptions (semiconductors aren’t subject to the US’s 20% headline tariff on Taiwan) have rendered tariffs way less harmful than many thought in April. It is also a read-through to America’s key Tech sector, suggesting demand was pretty darn healthy in Q3. In the absence of US GDP data, that can help shed light on extant trends.

MarketMinder’s View: This dives into politics in France, so please note that we favor no party nor any politician, assessing developments solely for their possible market or economic effects. This is the latest twist in the ongoing French budget drama, which risks again bringing down French Prime Minister Sebastian Lecornu’s fledgling government. The debate centers on whether to hike taxes or cut spending, as most presume France needs to slash its budget deficit. One popular proposal among the Socialist party, whose support in a no-confidence vote is the reason Lecornu is in office today, was a wealth tax. Two forms of that were tabled this week, but both failed to pass amid opposition from right-wing parties and the government, which argues the proposals are inconsequential and unconstitutional. While that may ease some marginal tax hike worries, it does little to quell lingering political uncertainty. Expect this to persist for the next few weeks at least, potentially longer if Lecornu can’t get a budget passed.

MarketMinder’s View: Look, we get that people are a little data-hungry as a result of the month-long government shutdown, which is now delaying release of Q3 US GDP. And we agree that most available private-sector data suggest growth continues. But there is a flaw in using Fed nowcasts of GDP to fill in the blanks. While the Atlanta and New York Fed’s tools do include some private-sector data, much of what they report relies on government-produced stats—and estimates of those yet to be released. These figures are always subject to some error. We would humbly suggest to you the shutdown makes them even less reliable than usual now. Of course, for markets, this is basically a non-factor, as stocks look forward and Q3 is over.