Daily Commentary

MarketMinder’s View: China’s National Bureau of Statistics (NBS) released November’s economic data Monday, and readings weakened from October. Industrial output rose 4.8% y/y, slowing from October’s 4.9% and just below expectations, as state-owned enterprises’ output slowed (private firms actually accelerated, per FactSet). Retail sales 1.3% y/y growth also disappointed, cooling markedly from October’s 2.9%. Meanwhile, China’s fixed asset investment decline worsened to -2.6% y/y in the January – November period, on track for its first annual decline in decades. Now the article acknowledges China is still on track to reach this year’s GDP growth target of around 5%, but it warns the foundation is shaky entering 2026 with trade barriers rising and temporary stimulus petering out domestically. We don’t dismiss China’s challenges, but this makes the fundamental error of using retail sales as a proxy for consumer spending. In reality, the majority of consumer spending goes to services, not goods. China’s services output has grown faster than retail sales all year. As for the weakness in industrial production and fixed investment, it is pretty well known that the government is trying to correct the side effects of prior stimulus programs that created excess capacity in heavy industry, particularly among state-run firms that benefited from local government largesse. Recent government comments in state-run media and elsewhere suggest this will be a key focus in 2026. The article uses that to dial down stimulus expectations, but we are already seeing that China can grow and contribute to global growth without aggressive stimulus. That is generally what we think global markets care most about.

MarketMinder’s View: The US and UK’s “deal to make a deal,” signed back in May, has seemingly hit a snag. “The United States informed the British government this month that it would pause fulfilling a technology-related agreement between the two countries, which included more collaboration on artificial intelligence and nuclear energy, according to two people familiar with the decision who were not authorized to speak publicly.” US officials’ main problem, according to reports, is the UK not holding up their end of the agreement in lowering their respective trade barriers. We doubt this is a huge shock for markets, given the long-running publicity and well-known fact the commitments were rather loose. This isn’t the first time things hit a stumbling block. This piece highlights that background, illustrating the lack of surprise power for markets, and notes this is something of a theme globally: “The Trump administration has now struck limited trade agreements with 15 nations in an attempt to change what it perceives as unfair trade practices and boost U.S. exports. But negotiators have often hit obstacles as they have worked to turn verbal pledges between leaders into the text of a trade deal. Some agreements that have been announced verbally have yet to be finalized.” Yet even with these snags, reality is going better than investors feared when Trump first announced tariffs in April—for stocks, this is what matters most.

MarketMinder’s View: This piece names several publicly traded companies, so please note MarketMinder doesn’t make individual security recommendations. We highlight this story for its broader theme only: how even well-intended and overall beneficial regulatory changes can have negative effects downstream. Back in 2012, Congress passed the Jumpstart Our Business Startups (JOBS) Act, which aimed to curb the decline in publicly traded US companies by easing reporting requirements for smaller “emerging growth companies,” or EGCs. The logic here was sound. After 10 years with 2002’s Sarbanes-Oxley Act, which sought to prevent a repeat of Enron and other massive corporate frauds, it was pretty clear tighter reporting requirements and lofty resulting costs were discouraging startups from going public. So the JOBS Act sought to ease the bottleneck, reducing compliance requirements for the first few years post-IPO. All fine in theory—and in practice, in many cases—but lately, it looks like some misbehaving entities overseas have been using it to perpetrate pump-and-dumps. “Since late September, the SEC has suspended trading in 12 companies’ stocks. That is more suspensions than in the previous four years combined. The SEC cited potential manipulation that appeared to be aimed at inflating the stocks’ prices and volume.” All 12 companies were EGCs based outside the US—not exactly the kind of businesses the JOBS Act aimed to support. This is a reminder that the onus remains on investors to do their due diligence, know what they are buying, and rely on more than overhyped social media messaging, which is where other reports indicate these penny stock frauds were mostly carried out. And that is true whether or not Congresses patches the JOBS Act to reduce the likelihood “so many questionable overseas companies take advantage of the legislation.”