Daily Commentary

MarketMinder’s View: UK GDP rose 0.1% q/q in Q4, short of expectations for 0.2% growth, as business investment dropped -2.7% and consumer spending grew just 0.2%. While the article acknowledges the UK’s annual expansion picked up from 2024 (from 1.1% to 1.3% in 2025), it also frets over GDP’s apparent sputtering in the second half. “However, economic output was then hit by the cyber-attack on Britain’s biggest carmaker, Jaguar Land Rover, which depressed vehicle production and led to the minimal growth in the third quarter. Speculation around the autumn budget appears to have further hindered growth in the final three months.” As one interviewed expert here puts it, “Businesses had a particularly bleak quarter as the dark cloud of uncertainty caused by the budget and higher costs severely curtailed trade and investment plans.” But hold on. Sure, services output didn’t grow in Q4, but on a monthly basis, the only decline occurred in October, as Budget speculation mounted. Services grew 0.1% m/m in November and accelerated to 0.3% in December—revealing that as clarity came, falling uncertainty helped headwinds on growth fade in the UK’s largest economic sector. This is yet another case of the UK’s economic resilience and reality not being as poor as many believe—a bullish factor.

MarketMinder’s View: Is there anything more European than a summit held at a moated castle built by Teutonic knights in the 13^th century? The headline here is that EU leaders agreed to move forward with a “Buy European” policy. “The EU is open to the once-taboo policy of European preference, namely favouring European companies in strategic sectors such as clean tech. Long promoted by France, ‘Buy European’ could mean imposing requirements on governments to prioritise locally manufactured goods in public contracts.” In a vacuum, governments’ choosing winners and losers isn’t a positive, in our view. The market-driven private sector tends to allocate capital more efficiently than elected or appointed officials seeking to please their constituents. But philosophy aside, many of the quotes and comments shared here illustrate why investors shouldn’t take “Buy European” to the bank just yet. While French Prime Minister Emmanuel Macron pushed for European preference for certain sectors (e.g., steel and defense), German Chancellor Friedrich Merz has pushed a deregulation agenda and more trade deals. European Commission Ursula von der Leyen toed the line, calling European preference a “necessary instrument” but also acknowledging any proposal must “… be in line with our international obligations.” So while it is worth keeping an eye on potential policies coming down the pike, wait for details and don’t act on pure speculation. But from a market perspective, it is also worth remembering that the US government has long employed “buy American” policies in selected sectors and, whatever you think of the effectiveness of the policy, it hasn’t shown much material effect on stocks. So don’t overrate wherever this heads in Europe.

MarketMinder’s View: Those titular stools supporting the US economy are health care jobs holding up the labor market, high-income households driving consumer spending and AI investment propelling business spending and the stock market. (Also, as this article mentions some specific companies, MarketMinder doesn’t make individual security recommendations, and their mentioning is coincident to the broader theme.) The concern: Should any of these pillars buckle, the economy risks collapsing. That seems vastly overstated to us. To be clear, our issue isn’t with the data presented here: Yes, the health care industry has led recent job creation, high-income households have been able to better navigate recent economic conditions than low-income households and AI expenditures have soared, benefiting some firms. But focusing on these “stools” also overlooks that healthcare job growth reflects businesses’ meeting the demands tied to America’s demography, that consumer spending in general tends to be pretty resilient regardless of economic environment and that this bull market is much more than AI (see how non-US markets led America and most of the “Magnificent Seven” last year). The US economic expansion and global bull market are much broader than some appreciate, indicating US stocks still have wall of worry to climb. The frailty narrative is a big brick in that wall.