Market Commentary Headlines

MarketMinder’s View: Scams are always evolving to trick folks. The latest twist: “Scammers know too well how to build a trap by planting fake customer service numbers online for well-known major airlines, banks, insurance companies, cable companies, online retailers and more.” (As this article lists several, please note MarketMinder doesn’t make individual security recommendations; we are here only for the broader theme.) How can you avoid these? Know how they work: “[C]onsumer watchdogs confirm that it’s a solid tip to avoid posting complaints on social media where everyone, including criminals who would love to ‘help’ you see them. ... By impersonating legitimate customer support operations, the criminals can catch you off guard and trick you into handing over money or personal information that will later be used for fraudulent activities.” And more generally, keep this evergreen advice in mind. “Clues that you’re dealing with crooks: They’re asking you for money upfront. They’re saying you can get a discount by using American Express gift cards or other gift cards to pay a bill. They’re shifting the storyline to get you worried about money being stolen from your bank account or some sort of money laundering investigation.” Instill these lessons now, before emotions override your decision-making.

MarketMinder’s View: Since some companies investing in bitcoin are mentioned here, we remind readers MarketMinder doesn’t make individual security recommendations. They are for illustrative purposes only and coincidental to the titular theme we wish to explore: why some companies are buying bitcoin. As the article details, one firm uses it for “financial engineering involving the issuance of convertible bonds and preferred shares on favourable terms, raising money to buy more tokens,” while another, “hopes to add its own twist to that business model, buying up companies with undervalued cash piles and converting them into bitcoin.” But this all lies on a questionable premise: that bitcoin is “the future,” so failing to get in on the ground floor is a potentially huge missed opportunity (akin to the “new economy” thinking that doomed dot-coms a quarter-century ago). “To someone who believes in bitcoin supremacy, this all makes perfect sense. Companies that leverage up to buy digital tokens will reap magnified returns, sailing joyously towards the point where bitcoin replaces the dollar as the global financial lingua franca. Return on equity is, in this world, old hat; bitcoin per share is the metric to chase. Most shareholders of listed companies probably still prefer real assets with predictable cash returns. They should see the bitcoin treasury trend as what it is: a risky punt ...” Just as “clicks” didn’t automatically prove their worth during late-90s’ dot-com mania, bitcoin’s bid for global financial architecture dominance isn’t necessarily assured, either. We, for one, remain doubtful, especially with the dollar doing fine as is.

MarketMinder’s View: As this article notes, tax and tariff avoidance is American as apple pie: “true since American colonists smuggled goods into British-dominated ports.” So it isn’t a surprise businesses are resorting to legally ambiguous methods to skirt “Liberation Day” tariffs. First, there is huge incentive when new and seemingly arbitrary taxes suddenly make an otherwise perfectly fine transaction unprofitable. One American apparel manufacturer says this puts “many honest companies at a competitive disadvantage.” Hence, tariffs’ pending legal challenges—and calls for Congress to step in. Second, tariffs work only as well as their enforcement, which the piece shows is suboptimal. As an auto industry executive bluntly puts it: “nobody is that worried that the U.S. government is going to come to China and arrest them.” However, while the headline begs the question that tariff-dodging practices (e.g., lowering goods’ declared value, reclassification and transshipping) are inherently fraudulent, that isn’t necessarily the case. For instance, an entirely legal tariff workaround: US customs law includes the “first sale rule,” allowing importers to use a product’s “industrial cost” (which excludes branding, craftsmanship and marketing expenses) instead of its retail price when calculating duties. Note, too, the vast scale of global supply chains that make full enforcement difficult, if not impossible. “In April, for example, Chinese exports to the United States fell 21 percent from a year earlier, but Chinese exports to Southeast Asian countries rose by the same percentage. [Meanwhile,] more than 3,000 companies in Mexico depended on Chinese shipments for 75 percent or more of their supply chain. Many of these companies are subsidiaries of Chinese state-owned enterprises, and most sell products to the United States, the report said.” Then recall Mexico can still ship USMCA-compliant goods into the US duty free. Moreover, the article hardly touches on the fact the Customs and Border Protection unit that collects tariffs is woefully understaffed to conduct vast inspections and relies on self-declaration to a great extent. We continue to find Trump administration tariffs less bad than feared, though some uncertainty remains.

MarketMinder’s View: We have observed people tend to separate their views of their own personal financial situation from the overall economy. They recognize their financial circumstances are fine but worry the broader environment is in shambles (due in part to headlines’ focus on the negative, in our view). This survey reinforces this observation: “Some 73% of adults were ‘doing okay or living comfortably financially’ as of October 2024, little changed from 72% in 2023 but still below the high of 78% seen in 2021, according to the [Federal Reserve’s] Survey of Household Economics and Decisionmaking published Wednesday. ... While the outlook on the U.S. economy improved last year, respondents remained gloomy overall. About 29% of adults said the economy was ‘good’ or ‘excellent’ in 2024—up from 22% in 2023 but still well below the 50% who said so before the pandemic in 2019.” If the lion’s share of people rate their financial circumstances positively—and they are arguably in the best position to judge—then maybe the economy isn’t as bad a shape as many think? This apparent disconnect between reality and expectations is one reason we remain bullish—the former has a low bar to clear to exceed the latter, suggesting plenty of upside surprise remains.

MarketMinder’s View: “Denmark is set to have the highest retirement age in Europe after its parliament adopted a law raising it to 70 by 2040. Since 2006, Denmark has tied the official retirement age to life expectancy and has revised it every five years. It is currently 67 but will rise to 68 in 2030 and to 69 in 2035. The retirement age at 70 will apply to all people born after 31 December 1970.” We aren’t suggesting a small European nation raising its retirement age above and beyond the currently sliding scale is vital for markets broadly. But there are two takeaways we see. One, should this become a trend across Europe, it could prove politically divisive, as this article highlights. Tweaks to pension plans have, in the past, proven to carry a steep price tag for politicians. Two, beyond this, the fact people are living longer lives motivates governments worldwide to consider decisions just like this one—which really highlights the importance of taking your retirement into your own hands by saving early and often, investing with discipline and getting the growth you need to give yourself financial autonomy above and beyond government rules. This is particularly true for those born, as this notes, since 1970. The likelihood is much higher that governments around the world would shift benefits and rules for generations years away from retirement age than those close to or in it.

MarketMinder’s View: There are myriad wrongheaded notions in this lengthy piece, in our view. The central fallacy is this: That demographics both explained the bull market of the 1980s and 1990s—and that they now pose a risk. The theory behind this is that the large Baby Boomer generation entering its peak earnings and savings years drove the long bull markets in those two decades, but the boomers have aged out of this accumulation phase and are now drawing on those assets. When they sell, with Gen X so small, who will buy? It argues central banks and politicians delayed the reckoning … until now. But this overlooks a few things. One, demographic trends are well known and move glacially. They aren’t sneaking up on anyone—and surprises move stocks most. Two, equity supply has been in gradual decline for many, many years now—tied in part to a lack of IPOs as businesses choose to stay private longer, partly to mergers and buyouts by private equity and more. Three, it presumes retail demand is the swing factor for stocks, but it is only one input. Others? Institutions, like pension funds and insurance companies—as well as stock buybacks. Four, it isn’t as though boomers have to universally sell all at once. Boomers range from age 79 to age 61. A huge gap! And many retirees will (and should!) own a significant slug of stocks for the balance of their lives. Five, the millennial generation is large and coming into its higher-earning and saving years. That won’t matter much for stocks—again, see the prior four points. But it is an offset worth weighing, as the older millennials could replace the older boomers. Look at this differently: If someone has predicted disaster tied to demographic factors for three decades, as this article notes—and it hasn’t happened—isn’t the highest probability the theory was just wrong … not early?

MarketMinder’s View: This article touches on politics, specifically tariff negotiations, so please note that MarketMinder favors no politician or political party, weighing developments solely for their potential market and/or economic effects. After threatening the EU with 50% tariffs last week, citing the bloc’s intransigence on US trade talks, President Donald Trump agreed to delay imposing such measures from June 1 to July 9. The logic seems to be that the EU is now prepared to fast-track such talks, leaving the additional tariff on EU goods at the universal 10% rate for now. It is positive news that talks seem to be taking shape, but the back-and-forth process here does sow uncertainty, which isn’t a positive for businesses and investment. Furthermore, the two deals struck thus far—with the UK and China—are largely deals to make deals that leave higher tariffs than those at the year’s outset in place on both. That isn’t a positive, in our view, and these are two factors that we think help explain US stocks’ vast lag versus the non-US equity market in 2025 to date, with the MSCI World Ex. USA Index up 15.2% while the S&P 500 is down -0.8%. (Data from FactSet.)

MarketMinder’s View: First, this article delves into US politics, so please note that MarketMinder favors no politician nor any political party, weighing developments solely for their potential market and/or economic effects. Buried within the One Big Beautiful Bill Act—the budget the House passed last week—were several somewhat odd provisions, including this one. “A section of the bill, which passed the House of Representatives on May 22, takes aim at countries including Canada, the UK, France and Australia that impose ‘digital services taxes’ on large technology companies such as Meta Platforms Inc. It also targets countries using provisions in a multicountry deal for minimum corporate taxes. … Section 899 would increase the federal income tax rate on passive US income — such as dividends, interest and royalties — earned by people and institutions that are based in the targeted countries. The first increase would be five percentage points, rising by another five points each year to a maximum of 20 points above the statutory rate.” The digital services tax is a point of contention that has been discussed in trade discussions before, to little avail. This legislation would likely turn up the heat on that front, and it is unclear how that would play out. Other nations don’t typically enjoy having outsiders try and dictate their tax policies, so retribution for this could follow—if it remains in the bill following Senate deliberations. And that is a huge “if,” friends. The Republicans presently have just a three-seat Senate majority, and the party is quite divided on what should and shouldn’t be in this measure. This is a matter worth watching, in our view, but it would be very premature to presume it remains in the legislation that eventually emerges.

MarketMinder’s View: A friendly reminder for investors: OPEC+’s production targets are mostly symbolic, which this piece helps show. (The article also mentions a specific oil producer, and as a reminder, MarketMinder doesn’t make individual security recommendations.) “Earlier this year, Kazakhstan’s energy ministry said that the country plans to produce a total of 96.2 million tons of crude oil and condensate in 2025, or about 2 million barrels per day (bpd), which would be 9.7% higher compared to 2024. Now Kazakhstan will likely top the production plans for the year, [Energy Minister Erlan] Akkenzhenov was quoted as saying by Russian news agency TASS.” Despite OPEC+’s raising production targets earlier this month, yet another member nation is set to overshoot its production plans. We say “yet another” because this a pretty common occurrence. For instance, Iraq, the cartel’s third-largest producer, is also on track to exceed OPEC’s target. It goes the other way, too—member nation Nigeria commonly falls short of the mark tied to mass oil theft, sabotage, poor infrastructure and domestic political strife. Individual producers (companies) hold influence too, as is Kazakhstan’s situation. Despite all the headlines OPEC+ meetings and announcements receive, their influence on production and global oil prices is overrated, in our view. There are plenty of other influences in a global market.

MarketMinder’s View: Please note, MarketMinder doesn’t make individual security recommendations, and the companies mentioned here are merely incidental to the broader theme we wish to highlight. That theme? Concentration risk, or the risk investors take on by allocating an outsized portion of their portfolio to a single investment. Specifics aside, this article does a solid job explaining why this can be such a monumental error. Namely, the overwhelming majority of investors don’t have information about a stock that nobody else does—which means they are acting on news that many have already acted on. Moreover, loading a huge portion of your assets into one stock (or other single investment) could seriously jeopardize your investment goals and objectives if the company struggles and does worse than you anticipate. Simply put, you always have to consider the possibility things go wrong—and if you have a massive weight in a stock, being wrong could be a financial calamity. Proper diversification helps mitigate this risk while also expanding your portfolio’s exposure to the broader market. Stories of investors hitting it big on one or two stocks can produce temptation—and greed. But over the long term, we find a properly diversified stock portfolio can provide the returns many need to achieve their goals.