Daily Commentary

MarketMinder’s View: “Sell America” refers to investors shunning US assets (e.g., stocks and bonds) due to fear surrounding the current administration’s economic policies. This trade is purportedly “back on” after credit raters Moody’s downgraded US debt Friday, stirring fears about “America’s unsustainable debt load.” As volatile as news has been lately, some scale and perspective are in order. Yes, US sovereign debt yields hit some intraday highs today (e.g., the 30-year Treasury topped 5%), but the benchmark 10-year Treasury ended Monday lower. This isn’t a huge move, either—something similar happened last month, a reminder that short-term volatility can happen at any time for any or no reason, even in bond markets. Lastly, credit downgrades aren’t market drivers. Ratings agencies’ ratings are opinions and reflect well-known information—likely already priced in markets.

MarketMinder’s View: The European Commission, the European Union’s governing body, lowered its GDP forecast for the 20-member eurozone currency bloc on Monday—a sign sentiment toward the region remains low. “The Commission said it now expects the combined gross domestic product of the 20 countries that share the euro to increase by 0.9% this year and 1.4% in 2026, an acceleration from the 0.4% growth recorded in 2024. It had previously forecast expansions of 1.3% and 1.6%, respectively.” The new estimates assume certain US tariff rates (e.g., 10% for most good imports, 25% on automobiles, steel and aluminum), which presumes the reciprocal 20% tariff rate doesn’t come back from the 90-day reprieve. Look, we get that the Trump administration has a history of making deals, but this is a big assumption, and however likely it is, it shows all this stuff is opinions based on presumptions, biases and guesses. In our view, the most interesting takeaway from this eurozone outlook is that economic sentiment is well in check. The proverbial bogeyman has seemingly morphed from the struggles of the latest “sick man of Europe” Germany to President Donald Trump’s tariffs. That poorer sentiment lowers the bar reality needs to clear to exceed expectations—a bullish development. Especially in this case, as we already have evidence that tariffs aren’t yet hindering global commerce the way many initially forecast.

MarketMinder’s View: As a reminder, MarketMinder is nonpartisan and prefers no political party or politician over another. Our analysis focuses on politics’ market and economic implications only. With July’s upper house election looming, Japanese Prime Minister Shigeru Ishiba’s government continues to falter in the polls—with voters upset about the soaring price of rise, a household staple. “Approval ratings for Ishiba’s cabinet stand at 27.4%, according to the poll, the lowest since he took office last October and a dip of more than five percentage points in the past month, [news agency] Kyodo said. Ishiba’s ruling Liberal Democratic party (LDP) has so far ruled out a cut in the 10% consumption tax, which promises to be a focal point of upper house elections in July. Ishiba is already under pressure after the LDP and its junior coalition partner lost their lower house majority last autumn. Significant losses in the upper house will only add to calls from opponents inside the party for him to go.” Now, most analysts don’t think Ishiba will exit office any time soon—the premier’s opponents within the LDP don’t have much political capital right now, either—but Japan’s well-known “revolving door” of prime ministers is worth keeping an eye on.