Daily Commentary

MarketMinder’s View: Keep the following thoughts in mind when you read this long piece that documents the fact gold is down more than US stocks and as much as the world’s since Israel and the US launched strikes on Iran at February’s end. One, many say gold is a hedge against chaos and war. Two, many say gold is an inflation hedge. Three, many say gold benefits from interest rate cuts. Four, many say it moves opposite the dollar. The trouble is that all four of these theses are contradictory, as the piece inadvertently highlights. If you get chaos and war, people usually flock to the dollar, driving it up versus other currencies, which means point one is offset by point four. If you argue rising oil prices are inflationary, a hedge should rise. But it also likely means you won’t get rate cuts, so point two is offset by point three (and vice versa). It all highlights what we think is a basic point: Gold’s swings are all about sentiment. There is no guideline to apply, no rule, no if-then formula. Investing in it is speculating about others’ emotions, full stop. While it is only a few weeks since the war started, a short period, gold’s slide since is a reminder of just that. All the same holds for silver, which has a little more industrial use, but is still subject to speculation.

MarketMinder’s View: The Trump administration is pressing the World Trade Organization (WTO) to make permanent a global deal that prevents nations from slapping tariffs on the trillions of dollars’ worth of digital services delivered annually via the Internet instead of simply extending forward two-year bans that have rolled over since 1998. We think this would be a positive step, granting firms more clarity around the lay of the land—especially in light of uncertainty surrounding trade and tariffs on goods that has swirled over the past 12 months. Now, that very uncertainty stems from the US, making the administration’s position here a little awkward and leading some analysts to expect another temporary extension. It is possible, as this notes, that the WTO will elect to prolong the agreement for four years versus two in a compromise. But no one expects the deal to end following the late March meeting—it is more whether it will be rolled over, extended for longer or made permanent. Regardless of which is chosen, though, we doubt the market effects are giant. These rollovers have been a virtual rubber stamp for almost 30 years. We will keep an eyeball on it but doubt huge news comes from it.

MarketMinder’s View: Lots of politics here, so please note MarketMinder is nonpartisan. We prefer no party nor politician, assessing political developments solely for their potential economic and/or market effects. First, the details: In Sunday’s first round of municipal elections, France’s populist National Rally (RN) and its allies “… won outright in Perpignan, clinched a strong lead heading into the second round in Nice — France’s fifth-largest city — and is running neck and neck in Marseille, where a victory would mark a landmark breakthrough for the far right.” The graphic herein gives a visual for all of this, showing minor RN gains—outside of huge jumps in Nice and Toulon—versus 2020’s first round. But as one political analyst notes herein, the RN missed high expectations following historic gains in 2024’s European and snap French parliamentary elections. And, importantly, no candidate exceeded the 50% vote threshold granting an immediate election win, so all of these seats are still up in the air. As explained here, “Under France’s two-round system for local elections, a candidate who wins more than 50% of the vote in the first round is elected outright. Those who secure more than 10% qualify for the second round. Whether the far right turns its gains into victories in the March 22 runoff will depend on the continued viability of the so-called Republican Front — alliances between parties to merge or stand aside that’s been used for decades to try to keep the National Rally out of office.” The RN’s ability to negotiate remains to be seen, and runoffs will determine winners on March 22. That said, we wouldn’t use this to make any predictions about 2027’s presidential elections. French politics have proven volatile lately and a lot can change between now and then. For now, this hints at the continuation of the National Rally’s gradual warming with voters—a years-long trend not sneaking up on stocks.