Daily Commentary

MarketMinder’s View: The fear discussed here: US households are using more of their incomes to finance spending and the savings rate is falling. The upshot: “This can’t go on much longer; consumers will eventually pull back on their spending, probably sooner rather than later. This is no small matter for the economy, given that consumption accounts for two-thirds of gross domestic product.” If you look at the charts shared within, they do look worrisome—but as they go back only to June 2023, they don’t provide a complete picture. For instance, yes, savings as a percentage of disposable income is low relative to the past two and a half years. But according to the St. Louis Federal Reserve, this ratio is right around levels from the mid-2010s and above the mid-2000s. So, not exactly a screaming warning sign to us, and that is setting aside the many flaws with the calculation itself (chiefly, that it omits retirement savings). The back half of the article frets over waning US consumer sentiment and warns persistent headwinds, including sticky inflation and high interest rates, will stretch household finances. To us, these lingering concerns are evidence that while US sentiment overall has warmed up, it remains pre-euphoric—skepticism hasn’t gone away completely.

MarketMinder’s View: Given the discussion of tax policy here is quite politicized, we remind you MarketMinder prefers no politician nor any party—our focus is on a policy’s economic and market implications only. When it comes to taxes, your friendly MarketMinder Editorial Staff are probably similar to you: We prefer to pay less so we have more money to spend on things we want and need (e.g., some sweet hand-knit sweaters and small-batch jeans). But from a macroeconomic perspective, higher tax receipts help governments service their debt. So it is with the UK: “Figures from the Office for National Statistics (ONS) show that the UK borrowing fell to £11.6bn in December, a fall of £7.1bn from a year earlier and below analysts’ expectations. The better-than-expected borrowing figures emerged after public finances were bolstered by a 7.6pc jump in tax receipts, fuelled by the Chancellor’s decision to increase levies on both businesses and workers. The ONS said Ms Reeves’s National Insurance hit on employers helped boost the tax take by £23.8bn from April to December compared with a year earlier, bringing in just shy of £150bn in total.” Again, we aren’t cheering higher taxes, but this is one way governments ensure borrowing obligations don’t overwhelm public finances. As the rest of the article frets over slow deficit reduction, the size of the public debt and political uncertainty over the current Labour government, these borrowing and tax receipt data indicate the UK actually isn’t in dire straits—reality is better than many realize. And if these better-than-expected fiscal results prevent more “austerity” fears around future Budgets, so much the better for sentiment.

MarketMinder’s View: There is obviously a lot of politics here, so please bear in mind we prefer no politician nor any party and assess developments for their potential economic and market implications only. And when we critique articles in this sphere, we focus on the market- and economy-related pieces of the argument. All the rest is sociology, which markets look past. So in that vein, we agree the Trump administration’s tariffs and trade threats on America’s commercial partners are an economic negative, hurting the imposer more than its targets—one reason US stocks underperformed non-US markets last year (which has continued year to date in 2026, per FactSet). Yet as this article also points out, “The power of the American economy makes it tough to dent, nevermind topple. The ‘sell America’ trade last year fizzled, and stock indexes reached new record highs just last week.” So while non-US stocks outperform, US stocks can still do well in absolute terms as reality keeps beating expectations. We have numerous problems, though, with the article’s alleged risks to America’s safe-haven status. First, the dollar isn’t going anywhere any time soon. Not because the US is forcing the rest of the world to use it, but because of its convenience as the most liquid currency to trade in, with the most abundant supply of reserve assets. Part and parcel of that: Treasurys—the world’s deepest bond market. Yes, America services a “high level of debt,” but that is because its credit is rock solid—which is why there is plenty of demand for it. Same with Corporate America’s debt for that matter. As for the claim high stock valuations signal a market especially vulnerable to these risks, high price-to-earnings ratios are a nothingburger since past prices aren’t predictive, especially the very backward-looking (and bizarrely inflation-adjusted) Shiller P/E. All these false fears show there is plenty of room for US stocks to keep running up the wall of worry.