Daily Commentary

MarketMinder’s View: First, this dives into politics and policymaking, so two needed disclosures here: One, we favor no party nor any politician, assessing developments solely for their potential market and/or economic effects. Two, this is all based on unnamed sources familiar with the matter and amounts to talk, so it could be nothing more than the UK government and, specifically, Chancellor of the Exchequer Rachel Reeves floating a trial balloon about potential policy shifts. But in a refreshing twist, these shifts aren’t tax hikes. They are deregulatory measures aimed to undercut NIMBY-ism and red tape gumming up construction projects from housing to energy production and more. Now, it may be that these reforms, which the government believes will boost growth and add government revenue as a result, never come to pass, as the environmental lobby within the Labour government could push back, a sign of intraparty gridlock rearing its head. But in essence, the idea of cutting red tape to boost growth is likely more favorable as a means of increasing revenue than, say, tax hikes. Not that more revenue is needed—that is a political matter, not an economic one. Yet this is likely a net positive way to approach that political decision, in our view, should it happen. (Which isn’t assured because it didn’t before, when the government promised streamlining.)

MarketMinder’s View: Obviously some politics here, so please keep in mind that we favor no politician nor any party and are interested solely in the economic and market effects of the policy here. After Friday’s sharp selloff on President Donald Trump’s threats to hit China with an additional 100 percentage points of tariffs, many have been waiting to see if the threats will materialize into an executive order. That has not happened as of yet, and the talk here may be why. It seems the administration is using the threat as a negotiating ploy to try and get China to walk back its rare-earths export restrictions, which were also likely a negotiating ploy. It is all a matter worth watching, but be patient: A “sell-first, question later” mentality has already proven counterproductive on tariffs and tariff threats this year—and that may be the case once more here.

MarketMinder’s View: When a bubble is actually inflating, most people don’t see it as such, which is why they buy in. Instead, they see a new paradigm of permanently sunlit uplands. So the fact that the latest Bank of America Global Fund Manager Survey shows many proclaim AI a bubble is counterintuitive evidence skepticism remains. “About 54% of participants in the October poll indicated tech stocks were looking too expensive, an about-turn from last month when nearly half had dismissed those concerns. Fears that global stocks were overvalued also hit a peak in the latest survey.” Now, we do think there is burgeoning optimism around stocks, and particularly AI stocks—and that is worth watching. But we think it is premature to consider this a bubble now, given the ubiquity of bubble fears and the fact these companies are largely very profitable, growing fast and self-financing expansion via cash (not debt or equity issuance).