Daily Commentary

MarketMinder’s View: As pundits predict dollar doomsday with gold (and silver) spiking, here is a helpful corrective showing why things are far from lost for the greenback. “[T]he Bank for International Settlements has spoken: The Basel-based organization’s triennial survey of the currency scene, the most comprehensive source on the size and structure of the market, shows that the dollar was on one side of 89.2% of all trades, up a touch from the 2022 result. The euro’s portion was down slightly at 28.9%, and the yen was little changed in third place, according to the report. Not bad, especially considering the poll was conducted in April, the same month that President Donald Trump sought to upend the global trading system with steep levies on American imports. The big gyrations—the dollar fell sharply and yields on bonds climbed markedly—and the shock of the Liberation Day theater led some investors to assert this was the beginning of the end for the dollar’s long reign. Time will tell, but there’s nothing in these numbers to suggest de-throning is imminent.” Yup! Concerns about the dollar’s demise have made headlines throughout the years, with plenty of supposed replacements on the ascent (ranging from the Chinese yuan to bitcoin). We aren’t saying the greenback will remain on top forever, but “de-dollarization” is a false fear, as we detailed in depth here.

MarketMinder’s View: Here is another example—and lesson—in commodity supply and demand: Left on their own, high and rising prices can be their own solution, since they cause consumers to cut back or substitute and signal producers to make more (which eventually leads to lower prices). In this case, cocoa prices boomed in 2023 and 2024 from poor harvests and dwindling inventory that prompted warnings of a “historic crunch.” Now cocoa futures have hit a 20-month low on expectations of better production and weaker demand. “Global output may outpace consumption by about 186,000 tons in the 2025-26 season, more than double the size of the year-earlier surplus, a Bloomberg survey last month showed.” This is just one small corner of global commodity markets, but it receives outsized attention when there are perceived shortages given chocolate’s broad appeal. Though that can spark alarm in the moment, the recent dip in futures prices shows how markets work: Given incentives and time, supply and demand balance each other out—markets are, in other words, self-regulating.

MarketMinder’s View: With the US government shutdown going on eight days—and US stocks hitting record highs—we have more data reinforcing our thinking that shutdowns aren’t bearish. As this article summarizes up front: “Investors worried about the fallout on markets from a government shutdown may find comfort in historical data showing that the S&P 500 tends to rise following the resolution of stalemates over funding in Washington. It’s uncertain how stocks may perform this time. But investors usually are best off staying calm and not making financial decisions based on the political drama, experts said.” And as one analyst notes at the end, “In times of political gridlock, broad exposure often outperforms reactive trading.” For more on why, please see our piece last week, “Government Shutdown: Stocks Don’t Sweat the Squabbling.”