Daily Commentary

MarketMinder’s View: First, this piece touches on UK politics and tax policy, so please note that MarketMinder favors no politician nor any party, assessing developments solely for their potential economic and/or market implications. Here, that fallout is hypothetical, as the article discusses a possible proposal from Chancellor of the Exchequer Rachel Reeves that would apply payroll taxes used to fund the National Health Service to passive income earned on rental property. Now, this largely looks like a trial balloon, as the government is known to float such ideas in the press in search of feedback. If so, they ought to heed the comments in this piece. As one analyst rightly and succinctly put it, “‘Targeting landlords won’t lose the government many votes but such moves invariably end up hurting tenants. With landlords already selling up ahead of the renters’ rights bill and tougher green regulations, another disincentive would reduce supply further and put upwards pressure on rents. Those that stay may pass on the extra costs in other ways. Governments need to fully appreciate that when you tax an activity, you get less of it.’” This same logic applies to earlier floated ideas surrounding taxation of property sales, which could make the housing market even less liquid. From a broader investment perspective, all these trial balloons and constant policy proposals elevate uncertainty in the short term, although this isn’t exactly a shock to UK stocks, given the budget debate has been front and center for many months now.

MarketMinder’s View: We have long noted the underappreciated, positive democratization of investing in America which extends all the way back to May 1975, when fixed commission rates were eliminated on Wall Street, ushering in price competition that led to lower costs. These lower costs, increased financial education, greater workplace retirement plan participation and more mean that the majority of Americans now own stocks, either directly or indirectly. This article documents the latest evidence of this trend: Using anonymized data, the JPMorganChase Institute found “Households are investing at levels far above those observed a decade ago. … Among low-income households, investing activity in May 2025 was roughly five times greater than the 2010–2015 average, while higher-income households also increased their participation, but by a smaller factor of about three. The result has been a narrowing of the income gap in retail market activity. … In 2015, just 6% of 25-year-olds had investment accounts, but by 2024, that share had risen to 37%, a six-fold increase in less than a decade.” That is great news! More people investing helps them grow wealth and fund their financial goals, and starting young is key. Now, we are far less interested in the crypto angle of this piece, as these niche assets lack history and, as noted herein, most involvement here looks like people chasing past high returns, given when interest seems to tick up. That is a poor reason to buy anything. But generally increased investment access and activity is a plus.

MarketMinder’s View: After US President Donald Trump enacted steep tariffs on China and other Asian nations, he pushed Mexican President Claudia Sheinbaum to align policy to ensure a flood of Asian imports don’t hit Mexico and then get transshipped onward to America. Now, according to several unnamed people familiar with the matter, it seems Mexico may be moving forward, with a budget bill set to enact higher tariffs on Chinese cars, textiles and plastics. Other undisclosed Asian countries may also face tariffs. This is, in our view, economically bad—it will raise costs for Mexican businesses and consumers. But it also isn’t very surprising and could help open the door to a more comprehensive Mexican-American trade deal that covers products outside the US-Mexico-Canada Agreement—and even helps ease the renegotiation of that deal. Now, the tariffs here aren’t a done deal, rates are unclear and product specifics matter. But if they are included in Sheinbaum’s budget, they will likely pass swiftly given her supermajority. All of that said, the broader non-US trade trend is lower barriers, not higher. This is a notable exception, if an expected one, but is worth noting in that regard.