Daily Commentary

MarketMinder’s View: While US President Donald Trump suspended tariffs slapped on Canada and Mexico over the weekend after talks Monday, the 10% across the board tariff he announced on Chinese imports stands. And so, China has responded with tariffs of its own. But as this article notes, the reach of the tit-for-tat move is extremely limited. “China’s two new tariff lists affect goods from the US that totaled $13.9 billion in 2024. Among those items, $9.5 billion of products including crude oil, tractors and functional vehicles will be subject to 10% additional levies, while $4.4 billion of goods — coal and liquefied natural gas — will face an extra 15% tax.” In addition, China announced a few export restrictions on goods like tungsten and some company-specific moves including blacklisting a couple minor US companies and an antitrust investigation of one large Internet search firm that rhymes with shmoogle … which hasn’t operated in China in more than a decade. (And we remind you here that MarketMinder doesn’t make individual security recommendations—any mention herein is incidental to our higher-level interest.) Ultimately, we agree with the takes in this piece that the response likely has muted effects at most and leaves a lot of room for negotiation. Which, as Monday highlights, seems to be what Trump’s tariffs are really all about. For more, see Monday’s commentary, “The Trump Tariff Turnabout.”

MarketMinder’s View: The headline drop is a 556,000 fall in job openings per December’s Job Openings, Layoffs and Turnover (JOLTs) report, which is larger than expected and puts openings at 7.6 million. But in our view, the takeaways here are exceedingly limited. For one, this series dates only to 2002 and the pandemic appears to have skewed it dramatically. To illustrate the point, 7.6 million openings is down sharply from November, but that level is above every reading in the report’s history before February 2021’s reopening. Perhaps the best you can say is it helps illustrate the fact reopening was harder to achieve than the preceding COVID lockdowns. But that is also well known and old news. The ratio of openings to unemployed, at 1.1, is historically normal and we guess that is worth noting. But here again, for stocks, this is a non-factor. Employment data lag the economy, which lags markets.

MarketMinder’s View: France’s budget drama is set to return to headlines this week, as Prime Minister Francois Bayrou attempts to enact his budget—which aims to appease opposition parties’ concerns over too much austerity. After similar theatrics sank his predecessor, uncertainty over Bayrou’s staying power has some investors on edge. But that uncertainty should fall this week, after Bayrou circumvented Parliament to end debate over the budget by invoking the constitution’s controversial Article 49.3. “Bayrou triggered the measure, Article 49.3 of the constitution, twice on Monday. The prime minister will employ the same maneuver twice more in the next week to pass all the remaining parts of the budget, according to a lawmaker from Bayrou’s camp. Opposition lawmakers will then have four separate opportunities to topple the government for a second time in less than two months, after having brought down former Prime Minister Michel Barnier in December over his spending plans.” So stay tuned here, but it appears we could get much more clarity in France in the coming days. For more, see our December 13 commentary, “Northern Europe’s Persistent Political Fog.”