MarketMinder Daily Commentary

Providing succinct, entertaining and savvy thinking on global capital markets. Our goal is to provide discerning investors the most essential information and commentary to stay in tune with what's happening in the markets, while providing unique perspectives on essential financial issues. And just as important, Fisher Investments MarketMinder aims to help investors discern between useful information and potentially misleading hype.

Get a weekly roundup of our market insights.

Sign up for our weekly email newsletter.




Trump Vs. Harris Could Make Politics Matter to Stocks Again. Here’s What Investors Will Be Watching.

By Joseph Adinolfi, MarketWatch, 7/23/2024

MarketMinder’s View: We have a couple of big quibbles with this piece, which argues Vice President Kamala Harris’s entry in the presidential race could tighten the contest with former President Donald Trump, adding unpredictability—and volatility—to the back half of this year. (Before we go further, please note our analysis is limited solely to how the election may affect stocks—we favor no politician nor any political party.) While we agree this year’s election has taken an odd turn in the last month or so, we expect the typical election year pattern to hold. People often get caught up in personality and campaign talk—hence the faulty “Trump Trade” rhetoric in the back half of this piece that didn’t play out after 2016’s election. But the reality is election years are bullish because uncertainty falls. This piece basically epitomizes the uncertainty we confront today, extrapolating it and heightening it through November. But that isn’t what is likely to happen. Instead: We will get clarity about whether Harris (the presumptive Democratic nominee) is the official nominee. We will watch campaigning to see what the platform is. We will see polling, giving a sense of popularity. And we will be able to assess House and Senate races better. That is why stocks typically rise more—and more often—in election-year second halves than first. And it even holds in close election years—like 2004, 2016 and 2020. We doubt this year looks so very different for stocks.


June Home Sales Slump, Pointing to a Buyer’s Market as Supply Increases

By Diana Olick, CNBC, 7/23/2024

MarketMinder’s View: There really are very few market takeaways from this piece, which showed existing homes sales—the majority of transactions in the US residential real estate market—fell -5.4% in June to the slowest annual rate (3.89 million homes) since December, as home prices rose. However, one interesting tidbit here: “Inventory jumped 23.4% from a year ago to 1.32 million units at the end of June, coming off record lows but still just a 4.1-month supply. A six-month supply is considered balanced between buyer and seller. These inventory levels are the highest supply since May 2020, boosted by homes sitting on the market longer. The average time that a home sat on the market was 22 days, up from 18 days a year ago.” The housing market has been supply-starved for many months now, as high mortgage rates discourage those with cheap home loans from the 2010s through 2021 from moving. These data, which are from contracts signed in April and May, precede a downtick in mortgage rates. So it is early, but we could be seeing the start of a better-supplied housing market.


French Leftists Announce Legislative Steps to Scrap Macron’s Pension Reform

By Sudip Kar-Gupta and Nicolas Delame, Reuters, 7/23/2024

MarketMinder’s View: Here is an illustration of the bullish power of gridlock. This article highlights efforts in the newly elected French legislature to reverse President Emmanuel Macron’s moves to raise the retirement age from 62 to 64 in order to save cash on pension payouts, given longer life expectancies. This move has been highly controversial and given populist parties including the “far right” National Rally (or Rassemblement National, RN) and the leftist France Unbowed (LFI) taking a large share and a plurality (and entering the government), respectively, you might think this legislation—which could fuel deficit fears—a fait accompli. Not so. “‘This bill won’t pass without the votes of the Rassemblement National. And, in sticking to our programme, we’ll be voting for it,’ RN party spokesman and lawmaker Laurent Jacobelli told BFM TV. ‘Your bill will pass thanks to us...and you’ll have to say it loud and clear,’ he said. Members of the left-wing coalition could, however, face a difficult decision. While left-wing parties have said many times they are united in their determination to reduce the retirement age, LFI’s partners in the New Popular Front coalition - which includes the Socialists, Greens and Communists - might shy away from a vote that can pass only with the backing of their right-wing nemesis. The bill, which is unlikely to be voted on before September, would not pass [with] only the support of LFI and RN lawmakers.” Gridlock blocking divisive legislation? Bullish!


Trump Vs. Harris Could Make Politics Matter to Stocks Again. Here’s What Investors Will Be Watching.

By Joseph Adinolfi, MarketWatch, 7/23/2024

MarketMinder’s View: We have a couple of big quibbles with this piece, which argues Vice President Kamala Harris’s entry in the presidential race could tighten the contest with former President Donald Trump, adding unpredictability—and volatility—to the back half of this year. (Before we go further, please note our analysis is limited solely to how the election may affect stocks—we favor no politician nor any political party.) While we agree this year’s election has taken an odd turn in the last month or so, we expect the typical election year pattern to hold. People often get caught up in personality and campaign talk—hence the faulty “Trump Trade” rhetoric in the back half of this piece that didn’t play out after 2016’s election. But the reality is election years are bullish because uncertainty falls. This piece basically epitomizes the uncertainty we confront today, extrapolating it and heightening it through November. But that isn’t what is likely to happen. Instead: We will get clarity about whether Harris (the presumptive Democratic nominee) is the official nominee. We will watch campaigning to see what the platform is. We will see polling, giving a sense of popularity. And we will be able to assess House and Senate races better. That is why stocks typically rise more—and more often—in election-year second halves than first. And it even holds in close election years—like 2004, 2016 and 2020. We doubt this year looks so very different for stocks.


June Home Sales Slump, Pointing to a Buyer’s Market as Supply Increases

By Diana Olick, CNBC, 7/23/2024

MarketMinder’s View: There really are very few market takeaways from this piece, which showed existing homes sales—the majority of transactions in the US residential real estate market—fell -5.4% in June to the slowest annual rate (3.89 million homes) since December, as home prices rose. However, one interesting tidbit here: “Inventory jumped 23.4% from a year ago to 1.32 million units at the end of June, coming off record lows but still just a 4.1-month supply. A six-month supply is considered balanced between buyer and seller. These inventory levels are the highest supply since May 2020, boosted by homes sitting on the market longer. The average time that a home sat on the market was 22 days, up from 18 days a year ago.” The housing market has been supply-starved for many months now, as high mortgage rates discourage those with cheap home loans from the 2010s through 2021 from moving. These data, which are from contracts signed in April and May, precede a downtick in mortgage rates. So it is early, but we could be seeing the start of a better-supplied housing market.


French Leftists Announce Legislative Steps to Scrap Macron’s Pension Reform

By Sudip Kar-Gupta and Nicolas Delame, Reuters, 7/23/2024

MarketMinder’s View: Here is an illustration of the bullish power of gridlock. This article highlights efforts in the newly elected French legislature to reverse President Emmanuel Macron’s moves to raise the retirement age from 62 to 64 in order to save cash on pension payouts, given longer life expectancies. This move has been highly controversial and given populist parties including the “far right” National Rally (or Rassemblement National, RN) and the leftist France Unbowed (LFI) taking a large share and a plurality (and entering the government), respectively, you might think this legislation—which could fuel deficit fears—a fait accompli. Not so. “‘This bill won’t pass without the votes of the Rassemblement National. And, in sticking to our programme, we’ll be voting for it,’ RN party spokesman and lawmaker Laurent Jacobelli told BFM TV. ‘Your bill will pass thanks to us...and you’ll have to say it loud and clear,’ he said. Members of the left-wing coalition could, however, face a difficult decision. While left-wing parties have said many times they are united in their determination to reduce the retirement age, LFI’s partners in the New Popular Front coalition - which includes the Socialists, Greens and Communists - might shy away from a vote that can pass only with the backing of their right-wing nemesis. The bill, which is unlikely to be voted on before September, would not pass [with] only the support of LFI and RN lawmakers.” Gridlock blocking divisive legislation? Bullish!