Daily Commentary

MarketMinder’s View: We think the opening here about sums up the lengths America’s trade partners are going to strengthen trade among themselves with their US exports newly taxed. “Canada is importing more cars from Mexico than from the US. China has snubbed American soybean farmers at harvest time and is buying from South American growers instead. India and China are resuming direct flights between the two countries and trading rare earths, ending years of frozen relations. The new contours of global commerce are starting to emerge as governments redraw trade alliances and companies seek other markets to avoid the highest US tariffs since the 1930s.” As the article goes on to document, this has helped the global economy, where “85% of global trade ... occurs outside the US,” defy expectations of a recession. Tariffs aren’t great, but while they may alter trade routes and destinations, they aren’t as disruptive as many make them out to be. As this article demonstrates, they hurt the imposer more than those imposed upon. The rest of the world isn’t without options as non-US nations deepen ties with one another—one reason we remain bullish globally.

MarketMinder’s View: Because this article names specific companies involved in the titular bankruptcies, we remind readers MarketMinder doesn’t make individual security recommendations—our interest is only with the broader theme: scaling the alleged credit risks for proper perspective. The piece describes two recent automotive-related bankruptcies—subprime lender-dealership Tricolor and auto-parts supplier First Brands—and the potential effects on their web of creditors. Bankruptcies kick off a process to determine who gets what, which is a normal part of the lending business—and capitalism—which the article details well (e.g., exploring the companies’ liabilities, how much was unsecured, the various credit structures and what lenders are on the hook for). Naturally, though, with back-to-back bankruptcies, some see a nascent trend: Is there a common denominator that could lead to more trouble in the lending space—and what are the broader market implications? The reaction here seems sensible enough to us and suggests sentiment isn’t too far ahead of its skis: “The credit rally, which got off to a robust start earlier in October, has hit a speed bump in recent days as investors reduced exposure to certain sectors over concerns around weakness in consumer and auto lending, experts said. ... To be sure, the collapse of First Brands is unlikely to cause a widespread global meltdown across credit markets, some experts said. ‘On a deal-by-deal basis, we don’t see conditions in the leveraged finance markets as materially different from historical norms,’ said [one analyst].” Indeed, according to Bank of America data, high yield (those with low credit ratings) corporate default rates at 1.2% through September are below their 4.0% historical average. High yield credit spreads, which measure investors’ risk perceptions, have widened to 3.11 percentage points (ppts) from September 22’s 2.69 low (after Tricolor’s September 10 bankruptcy) and January’s near-record 2.59 low. But going back to 1996, the average is 5.23 ppts. Meanwhile, investment grade corporate credit spreads are at 0.81 ppts. Though up in recent days, they aren’t far off record lows and remain well below average. Sentiment can swing credit markets just like stocks, but when those most exposed collectively suggest keeping calm and carrying on, listening to the market seems wise to us.

MarketMinder’s View: Don’t look now, but there are only two and a half months left in the year, and some important dates are upon us. For instance, the enrollment period for 2026 Medicare coverage started today, and as this article details, there are some big changes worth noting—especially for those with private Medicare plans (known as Medicare Advantage). Because Medicare insurers are seeing higher costs, they are passing some of them on to plan participants. For example, “Medicare Advantage companies are increasing the maximum out-of-pocket cost in many of their plans. ... To figure out where the bite will come, you want to focus on the documents that describe each plan. For your current plan, you should have received an Annual Notice of Change, describing next year’s tweaks.” Not only could you be charged more, “At least 1.2 million Medicare Advantage enrollees are likely to lose their current plans next year because the plans are being eliminated, according to Healthpilot, a brokerage that offers Medicare plans. Big Medicare insurers are paring back their preferred provider organization designs, known as PPOs, while bolstering their more-restrictive health maintenance organization plans, known as HMOs. HMOs often don’t pay for care you get from doctors and hospitals outside their approved networks, which can be limited. PPOs typically give patients more freedom.” If you are tired of the runaround, like one Medicare Advantage user describes it, “consider opting for traditional Medicare, which tends to include nearly every hospital and doctor. But if you do, you will likely need a special product called a Medicare supplement, or Medigap, and that can be expensive, or even impossible, to get. If you don’t get a Medigap soon after you first age into Medicare at 65, you might be refused, or pay higher rates, based on your pre-existing health conditions.” Read on for more and remember: Forewarned is forearmed!