Daily Commentary

MarketMinder’s View: The “r” word has been leading many recent financial headlines, with experts citing myriad indicators as evidence trouble looms. The latest: Falling sales of heavy trucks (those exceeding 14,000 pounds in gross vehicle weight). As explained here, “Economists and investors have historically tracked how much of these vehicles — think tractor-trailers — are being sold in the U.S. as a leading indicator for the economy. That’s because these trucks are considered vital to American manufacturing and building. When truck sales are rising, that can be a sign of growing industrial action. On the other hand, sliding volume can indicate contractions in the U.S. economy — and has historically preceded recessions.” Sounds logical, but we have long had issues with the thesis that vehicle sales are a leading indicator. One, auto sales growth is historically strongest earlier in the economic cycle, and it tends to slow as an expansion matures (for reasons explained here). Also, vehicles in general are facing some unique recent headwinds (see tariffs) that may be weighing on demand. Finally, tractor-trailers may be important for manufacturing and construction, but in a services-dominant economy like America’s, they aren’t a swing factor—so don’t overstate what heavy trucks mean for output. Last, just look closely at the included chart. There are false reads early in the postpandemic period, the mid-2010s, mid-1990s and mid-1980s. That isn’t a great history.

MarketMinder’s View: This analysis focuses on how the world’s second-largest economy has fared amid 2025’s trade uncertainty and tariffs. The upshot: better than most thought! “China’s exports to the United States are down about 15 percent so far this year. But that has not slowed its export machine. … This year, through August, China’s trade surplus widened to $785.8 billion from $612.6 billion a year ago. Its surplus with countries across Southeast Asia, Africa, Latin America and Europe has climbed rapidly. … Some of the excess that China exports to other countries winds up in the United States, although the Trump administration is vowing to crack down on that trade. China has managed to avert the steepest tariffs threatened by President Trump — up to 145 percent at one point.” The article also points out domestic demand is flagging (although things here also aren’t as poor as perceived) before pointing out China’s leverage when it comes to trade negotiations with the US. Look, we aren’t dismissing China’s economic slowdown or challenges in this environment. But its economy has remained more resilient than many appreciated, and the Middle Kingdom remains a positive contributor to global growth.

MarketMinder’s View: Please note, MarketMinder is nonpartisan, preferring no politician or political party over another. We share this piece strictly to make a broader point: New Prime Minister Sébastien Lecornu has his work cut out for him. Amid the titular strikes, Lecornu is meeting with different party leaders to figure out a way to pass a budget. The center-left Socialists have revealed “the price of their cooperation, which is crucial to Lecornu’s survival, is high. … The party’s leader Olivier Faure, who supports the strikes, told reporters after the meeting that Lecornu was vague about his budget plans and said his party was ready to torpedo the government a third time should negotiations turn sour.” Now, as the article points out, this doesn’t mean a deal can’t be reached—some Socialists, including former President François Hollande, may be open to compromise. All this noise can be frustrating for voters and stir some short-term uncertainty, but it is also old hat for markets, which recognize France’s economic and fiscal realities, including debt fears, aren’t as poor as perceived. And it does mean that, beyond whatever shape a budget eventually takes, contentious legislation isn’t likely to go anywhere in this government—a plus for stocks longer term. For more, see last week’s commentary, “France Falls Into Political Purgatory … Again.”