Daily Commentary

MarketMinder’s View: Headlines drop the “r” word (recession) far too liberally for our liking. Definitions vary, but generally speaking, a recession is a broad, typically extended decline in economic activity. One industry (shipping and transportation, in this case) experiencing monthly and year-over-year dips for the first time this year doesn’t meet that definition to us. Anyway, as this article reports, a recent spate of shipping metrics (e.g., freight volumes, August import data and port activity) have slowed or even dipped. Sounds worrisome, but consider the backdrop: US logistics and transportation sectors are navigating a pothole left by early-2025’s trade uncertainty. “The causes of the trade decline range from weakness in housing and manufacturing to energy costs, and shippers pulling forward imports earlier in the year and building inventories to reduce tariff impacts. … The decrease in containers follows a period of trade frontloading during which retailers and manufacturers brought in freight early as they attempted to navigate multiple tariff deadlines and rate changes, leading to big jumps in port traffic.” Now, many of the logistics firms interviewed here already anticipated activity would weaken at the end of the year, and some acknowledged they have remained profitable despite the uncertainty—a sign of their resilience. Looking forward, some of the executives here are saying trouble looms in 2026, which is possible. But markets pre-price widely expected events, and tariffs biting on imports—especially from China—is about as well known and expected as an economic event can be. We aren’t dismissing tariff-related headwinds, but the dour tone here also overshadows the shipping industry’s adaptability—one reason why trade uncertainty hasn’t actually yet caused recession.   

MarketMinder’s View: After sharing a few fun anecdotes from Holland’s tulip mania of 1636 – 1637, this analysis looks at some of the more speculative corners of today’s market, including cryptocurrencies and “meme” stocks, arguing the theses for owning these assets is based less on fundamentals (e.g., future cash streams) and more on appearances (i.e., being a part of the latest investing fad). “All of this raises the question of why such surreal financial assets are popular now. I think the answer is technological—but the technology is not blockchain, it’s social media and the trading app. It has never been easier for retail investors to egg each other on, and to trade in haste around the clock.” Now, we aren’t painting in broad brushstrokes and calling every meme-stock or crypto investor a heat chaser—some probably do have fundamental reasons underpinning their reasons to buy. Nor do we think this sort of investing is as commonplace as this makes it seem. The article fairly notes that the ease in trading today (low costs, easy technological access, etc.)—which we think is generally a plus—has drawbacks. It is much easier to act on an emotional impulse when all you have to do is pull up an app and push a few buttons, and many studies like those referenced here suggest more trading equals lower returns. Similarly, more information has pluses and minuses. Successful investing requires constantly challenging yourself and considering ways you could be wrong. You can find that online, no doubt. But you can also find loads of things that confirm your biases and thereby lead you astray—and many people will struggle to overcome the desire to see that as pure validation. While we aren’t against cryptocurrencies and meme stocks per se, the typical rationale for owning them seems based more on hype and what just happened than a logical assessment of conditions going forward.    

MarketMinder’s View: The Fed released the minutes from last month’s Federal Open Market Committee (FOMC) meeting, and what did we learn? Not a whole lot. “The record of the meeting, released Wednesday in Washington, also showed ‘several’ policymakers were against lowering the Fed’s benchmark rate at that gathering. ‘Many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year,’ the minutes said.” Adjectives like “many” and “several” are admittedly vague, but even if the meeting minutes reported specifics (e.g., three participants think a December rate cut would be appropriate), that doesn’t mean it will happen. Policymakers can change their mind between October and the next scheduled meeting on December 9 – 10. The meeting minutes never really give you reliable information on which to forecast Fed moves, which are inherently impossible to predict as the participants are all human. Look no further than 2022, when Fed Chair Jerome Powell said the central bank would look through rising inflation and keep rates on hold, only to reverse course and rapidly hike. And he wasn’t alone: Policymakers worldwide performed that whoops-a-daisy U-turn. So rather than fret over possible monetary policy decisions, we suggest a wait-and-see approach—trying to preemptively act on the unknown is a recipe for mistakes. For more, see last month’s commentary, “Central Contradictions: Comparing Fed Officials’ Conflicting Quotes.”