Home → Fisher Investments MarketMinder Headlines → 07-2013 Archives

By , The Washington Post, 07/31/2013

MarketMinder's View: We hardly agree we’re witnessing “The Great Stagnation.” Innovation is constantly growing as new advancements give way to new products—and so on and so forth (read: Moore’s Law). We may not have jetpacks (yet), but in our view, this largely disregards the myriad other products created by the innovation process. It also seemingly ignores that R&D spending remains robust—the percentage growth rate has merely slowed as the total amount has become larger over time.

By , The Wall Street Journal, 07/31/2013

MarketMinder's View: “In sum, past GDP growth is not a good predictor of future GDP growth in part because there is a significant amount of measurement error in the numbers that are reported during the first few months. The revised numbers that come out much later are better at predicting future GDP, but by the time they're out, the future has already passed in most cases. The market is a better and timelier forecaster of future GDP, perhaps because the market has a financial stake in getting it right.” Hear, hear!

By , BusinessWeek, 07/31/2013

MarketMinder's View: The most recent GDP numbers show the US economy grew at 1.7% y/y in Q2—not gangbusters, but not necessarily “soft.” Underlying data were quite strong. Sure, consumer spending slowed a bit from Q1, but business investment, exports and imports all rose more than 5%—evidence the private sector is growing apace and demand is plenty healthy.

By , The Telegraph, 07/31/2013

MarketMinder's View: We have much to quibble with here. First of all, the Fed hasn’t started tapering its asset purchases, so we’re rather unsure how this is causing the so-called “passive tightening” of monetary policy. Second, while we largely agree Manufacturing PMI data aren’t necessarily predictive of future economic growth, it is unlikely, in our view, the ECB will look at PMI data alone as a sign of economic health and the basis for monetary policy decisions.

By , Korea Times, 07/31/2013

MarketMinder's View: Korean banks do have some efficiency issues, as described here, but regulatory overreach also impedes bank profitability. Korean regulators cap many financial services fees, which limits revenues. Removing the cap altogether would give banks more flexibility, which would enable them to offer better services over time (also a benefit for consumers), as well as add to profit potential.

By , The Globe and Mail, 07/31/2013

MarketMinder's View: An interesting look at Canada’s relatively high food tariffs and how lowering them would bring myriad benefits. And free trade doesn’t just reduce consumer prices and create economic opportunities—stocks love free trade, too!

By , CNBC, 07/30/2013

MarketMinder's View: We rather disagree with this dour outlook. It’s not surprising some sectors aren’t reporting whopping earnings growth—or even growth at all. As bull markets mature, year-over-year comparisons become increasingly difficult to beat, and sectors with less flexible costs (typically Materials, Energy and Industrials) have the hardest time.

By , Bloomberg, 07/30/2013

MarketMinder's View: The government’s continued verbal commitment to reforms likely encourages investors, though whether actions follow will be key over the period ahead. Over time, financial reform can help China achieve more sustainable growth and become more of a market force.

By , The Wall Street Journal, 07/30/2013

MarketMinder's View: Greece is one step closer to privatizing its state-owned gambling program—positive news, in our view, as the country has been trying for some time to shed assets in return for continued support from the troika. For more on Greece’s privatization efforts, see our 3/12/2013 cover story “Greek Privatization Physics.”

By , Reuters, 07/30/2013

MarketMinder's View: In our view, that regulators are moving gradually to implement reforms is a plus. Slower implementation gives lenders more time to make appropriate changes, which should help mitigate the impact on loan growth. Furthermore, markets react better to slower regulatory changes than quick ones. For more, see our 7/25/2013 cover story, “Dodd-Frank: Relaxing Unwritten Rules?

By , Associated Press, 07/30/2013

MarketMinder's View: The media has long been speculating about if and when the Fed will begin tapering its asset purchases, but the speculation rests on the notion quantitative easing (QE) is good and necessary for the economy. In our view, slowing QE would be a tailwind for economic growth by allowing yield spreads to widen, giving banks more of an incentive to lend.

By , Bloomberg, 07/30/2013

MarketMinder's View: This isn’t surprising to us as unemployment is a lagging indicator. As the eurozone continues to show signs of improvement, unemployment will likely follow down the road.

By , Associated Press, 07/30/2013

MarketMinder's View: The uptick in lending to small and midsize enterprises (SMEs) is more positive news for the UK economy, but it isn’t necessarily the start of a trend—banks will likely need more regulatory relief in order to lend to SMEs more enthusiastically.  For more, see today’s cover story, “Let it Be.”

By , Korea Times, 07/30/2013

MarketMinder's View: More notable than the headline growth, in our view, are the significant increases in corporate investment and industrial activities. Business investment has declined in Korea lately, and while it might not skyrocket from here, the uptick suggests businesses are starting to overcome recent headwinds.

By , The Telegraph, 07/29/2013

MarketMinder's View: In our view this is altogether too dour on the eurozone. Yes, risks remain. However, three years into the crisis, the euro is still intact, and the area is overall stabilizing. Plus, Germany’s upcoming elections likely won’t affect European politicians’ historically demonstrated will to keep the eurozone together.

By , The Wall Street Journal, 07/29/2013

MarketMinder's View: There are a number of misperceptions here, but to address the biggest, the end of quantitative easing (QE) is not a guaranteed end date for the current bull market. In fact, we believe QE is contractionary as the resulting flatter yield curve disincentivizes banks from lending, and the economy will benefit more when it ends.

By , Reuters, 07/29/2013

MarketMinder's View: Overall, the housing market has been steadily improving and likely continues to—thanks to a healthy private sector and growing US economy—whether or not the (still historically low) rates keep rising.

By , The Wall Street Journal, 07/29/2013

MarketMinder's View: Some of these measures are really just nice trivia, but taken in total with other measures and low long-term bond yields, they’re yet more proof inflation—a general rise in prices across the whole economy, not just in food, gas or other common costs—remains tame by official and more unconventional measures.

By , EUbusiness, 07/29/2013

MarketMinder's View: While we think this trade tiff’s end is an overall positive, the dispute and resolution likely have little economic impact: The agreed upon price floor is lower than what the EU initially sought, and heavy subsidies on both sides remain.

By , Market Watch, 07/29/2013

MarketMinder's View: It isn’t very surprising earnings are falling in maturing bull markets—that’s more typical than it is problematic. After all, today’s earnings comparisons look back on a higher base than early in the cycle. What’s more, profits are growing, and they’re growing faster than expected. The degree they’re better than expected isn’t all that important.

By , CNN Money, 07/29/2013

MarketMinder's View: Largely, we agree with this article’s takeaway: Holding cash is deemed safe by many, but it runs the risk of losing out to inflation. Stocks, on the other hand, are more volatile in the near term but have historically had much higher long-term returns. In our view, investors should consider their long-term goals and objectives when choosing appropriate assets.

By , Bloomberg, 07/26/2013

MarketMinder's View: Considering prices fell again if you strip out the impact of higher energy import prices, we’d hesitate to call this a boost for Abe. Rather, it’s further evidence a weaker yen alone isn’t a panacea for Japan.

By , The Wall Street Journal, 07/26/2013

MarketMinder's View: While one might argue the Fed’s actions during 2008, like the first round of quantitative easing and slashing Fed Funds to zero, were incrementally beneficial, what alleviated the crisis most was suspension and subsequent removal of FAS 157’s fair value accounting standards. Moreover, in the period since 2009, QE2, Operation Twist, QE3 and QE-infinity represent wrongheaded, contractionary policies, in our view.

By , The Washington Post, 07/26/2013

MarketMinder's View: Though bonds sold off recently, the outlook here seems a touch dour. Interest rates have already receded a bit from recent highs and likely remain benign looking ahead as the Fed has little incentive to make any sudden big, unannounced changes to monetary policy. Additionally, recent volatility could very well be bonds pricing in eventual monetary policy changes.

By , AAP, 07/26/2013

MarketMinder's View: That the government must step in and order firms to cut production to prevent their taking big losses speaks volumes of the amount of reform needed in China. In a well-functioning market economy, profit motive would incentivize firms to manage production and protect margins themselves. Officials are prodding China in this direction, however, and as reforms continue, China likely becomes more of a market force over time.

By , China Daily, 07/26/2013

MarketMinder's View: An interesting look at what’s planned for the forthcoming free trade zone in Shanghai. City officials plan to test dozens of reforms that, if successful, could spread nation-wide.

By , The Wall Street Journal, 07/26/2013

MarketMinder's View: The ECB’s Outright Monetary Transactions program was never designed to boost economic growth—it simply aimed to help contain peripheral sovereign yields, which have stayed manageable over the past year. This isn’t a panacea. Rather, it buys time for the region to continue working through its many issues—weak economic growth being but one.

By , Associated Press, 07/26/2013

MarketMinder's View: Once again, the political will to preserve the euro prevails, and Greece wins some breathing room to continue meeting obligations.

By , New York Times, 07/26/2013

MarketMinder's View: Increasing the incomes (marginal propensity to consume) of average Americans could increase growth. But the theory that the income growth for the top 1% (2%, 3%, etc.) takes away from the middle class is flawed and rests on a fixed pie theory of the economy that just isn’t accurate. Moreover, it presumes little to no fluctuation in who represents the various income strata in America. Inequality is simply unrelated to growing incomes for Average or Median Joe.

By , Jiji Press, 07/26/2013

MarketMinder's View: Japan made its debut at this round of Trans-Pacific Partnership talks, and negotiators immediately pushed to keep tariffs on rice and other foodstuffs intact. How this impacts the free-trade negotiations—and how the negotiations in turn impact Prime Minister Shinzo Abe’s political capital and ability to pursue structural reforms—bears watching.

By , The Wall Street Journal, 07/26/2013

MarketMinder's View: This would bring some welcome relief for Portugal’s firms and, likely, enable them to invest more—and contribute more to economic growth. This would raise the denominator in Portugal’s debt-to-GDP ratio, likely improving its fiscal situation over time—especially as higher growth begets higher tax revenues. 

By , GovTrack, 07/25/2013

MarketMinder's View: An interesting video that shows how truly gridlocked this Congress is. Our latest crop of legislators has enacted the fewest bills of any Congress in modern history, and some legislators haven’t even introduced a bill. This is good for stocks, as it lowers the likelihood extreme legislation passes.

By , Project Syndicate, 07/25/2013

MarketMinder's View: This argument lies on the premise Dodd-Frank financial reforms will remove the dangers that led to the 2008 financial crisis—but they don’t. And that regulators are relaxing and potentially scrapping some of the harshest provisions is a positive as it helps ease some of the regulatory uncertainty plaguing Financials. For more, see today’s cover story, “Dodd-Frank: Relaxing Unwritten Rules?

By , The Wall Street Journal, 07/25/2013

MarketMinder's View: This was the third sequential monthly increase, giving this typically variable data point its longest streak since 2009. And while aircraft shipments largely drove the increase (masking weak core shipments), order backlogs remain high, which augurs well for production growth looking forward—a tailwind for overall economic activity.

By , The Telegraph, 07/25/2013

MarketMinder's View: UK growth accelerated in the second quarter, with all sectors positive for the first time since Q2 2011. This is further proof an economy can grow without quantitative easing, which ended in the UK. For more, see our 7/18/2013 cover story, “A UK Perspective on QE.”

By , Reuters, 07/25/2013

MarketMinder's View: Yes, quantitative easing has helped strengthen US firms’ balance sheets and reduced corporate borrowing costs, and this has helped earnings. But the impact seems overstated here, and it’s certainly not the only thing driving profit growth. Revenues have grown, too, throughout this expansion—and they’re still growing in non-commodity driven sectors.

By , EUbusiness, 07/25/2013

MarketMinder's View: Though nothing is final (and the purported solution seems puzzling), resolving this solar panel spat would be welcome news as it threatened to damage bilateral ties in other industries

By , The Washington Post, 07/25/2013

MarketMinder's View: While this is an interesting observation about the potential side effects of the Affordable Care Act, it largely lacks forward-looking economic significance—jobs, whether they’re full-time or part-time, don’t beget growth. 

By , MarketWatch, 07/25/2013

MarketMinder's View: New stock market highs are neither scary nor indicative of fundamental change. Bull markets typically see dozens of “new highs.” Better-than-appreciated fundamentals today suggest this bull market still has room to run.

By , CNBC, 07/24/2013

MarketMinder's View: According to this, lawmakers aim to finish writing Dodd-Frank by year’s end—an unlikely goal, in our view, considering it’s taken three years to complete 39% of the rules. However, when (or if) Dodd-Frank is completed, it likely looks very differently from its initial proposals, as components like the Volcker Rule are likely watered down, which helps mitigate its associated risks.

By , EUBusiness, 07/24/2013

MarketMinder's View: While it’s not out of the woods yet, the eurozone’s first positive composite PMI in a year and a half is more evidence of overall economic stabilization.

By , The Wall Street Journal, 07/24/2013

MarketMinder's View: In what’s likely primarily a political play to encourage Greece to cut its still yet-to-be-materially-reduced public spending and meet bailout targets, eurozone leaders are withholding aid—for now. In the end, Greece still likely gets at least some aid, just as it has on all previous occasions, as eurozone leaders have consistently shown resolve to keep the euro intact.

By , CNN Money, 07/24/2013

MarketMinder's View: That new home sales continue rising despite mortgage interest rates’ recent climb illustrates how hardy the US housing market’s recovery is.

By , AEIdeas, 07/24/2013

MarketMinder's View: That the high levels of income mobility in the country can be found in North Dakota is yet another testament to the shale oil boom’s positive impact on the US economy.

By , Associated Press, 07/24/2013

MarketMinder's View: HSBC’s Manufacturing PMI, which surveys only private firms (the “official” PMI measures state-run firms), has regularly contracted over the past year, and China has still grown. And even with relatively slower growth, China still contributes hugely and positively to global GDP. Still, weakness in this area supports the need for reforms promised by new officials.

By , The Telegraph, 07/24/2013

MarketMinder's View: Unintended consequences at work: A rule to limit the amount retailers are charged for processing debit/credit card payments likely hurts consumers in the end as banks looking to make up the revenue potentially start charging customers for having the cards in the first place. That said, it’s worth noting the US’s equivalent—Dodd Frank’s Durbin Amendment—hasn’t had a huge negative impact since it took effect.

By , Real Clear Markets, 07/23/2013

MarketMinder's View: What we find sensible regarding this piece isn’t so much the take on insurers specifically (which we feel is overstated a bit) but the take on “systemic risk” expressed here. “The false notion of ‘systemic risk' or ‘systemically important’ financial institutions is rooted in the economy suffocating view that markets are often wrong.”

By , The New York Times, 07/23/2013

MarketMinder's View: As outlined here, despite fears stemming from the Fed’s money printing, inflation remains relatively low—and it likely stays that way for some time. Due to depressed interest rates, banks have little incentive to lend, so reserves haven’t circulated through the broader economy. For more, see our 7/12/2013 cover story, “Easing’s Quantitative Analytics.”

By , Project Syndicate, 07/23/2013

MarketMinder's View: While there are parts of this argument we’re skeptical of, the focus on reforms as a critical future driver for China’s economy and markets seems right to us. Essentially, we agree “watching for progress on these key elements of structural change and reform seems to be the right stance. If markets are confused or pessimistic about China’s longer-term agenda, but if the direction of structural change and reform is positive, there may be investment opportunities that were absent in the more exuberant recent past.”

By , Korea Times, 07/23/2013

MarketMinder's View: In our view, companies alone should decide how much they should pay in dividends—not regulators. Changing rules to limit dividend payments is a solution in search of a problem and one that likely yields unintended consequences.

By , The Telegraph, 07/23/2013

MarketMinder's View: After the UK ended its most recent round of Quantitative Easing late last year, rates have actually risen—incentivizing banks to lend more. Hence, it isn’t surprising to us lending has increased. For more, see our 7/18/2013 cover story, “A UK Perspective on QE.”

By , The Guardian, 07/23/2013

MarketMinder's View: The UK economy has seen increasing pockets of strength in many areas, like higher retail sales, strengthening manufacturing and services sectors and the first positive quarter of business investment in the last year. Hence, maybe export gains are due to the weak pound, but the UK’s economic outlook doesn’t necessarily hinge on solely exports.

By , China Daily, 07/23/2013

MarketMinder's View: In our view, this confuses coincidence with causality, especially since (as the article notes), “China experienced a seven-month decline in the purchases between 2011 and 2012.” That predates taper talk by a long way. 

By , CNBC, 07/22/2013

MarketMinder's View: As largely anticipated, Japanese Prime Minister Shinzo Abe’s Liberal Democratic Party won the majority in Sunday’s elections, increasing his ability to pass legislation. However, we remain skeptical he’ll choose to use this newly earned political clout in taking on deeply entrenched interests who support the status quo. For more, see our 05/24/2013 cover, “We’re (Not) All Turning Japanese.”

By , Project Syndicate, 07/22/2013

MarketMinder's View: It’s true some Emerging Markets' economies have experienced some turbulence (much like many other economies), but we don’t necessarily agree with all of the reasons outlined here—like the US’s QE tapering. More than anything, growth in these economies is hindered by things like protectionism, strong capital controls and weak property laws. Implementing economic and structural changes would provide better prospects for longer-term growth.

By , BusinessWeek, 07/22/2013

MarketMinder's View: While largely a symbolic step, China made a notable step forward on the financial reform front by removing the floor for lending rates—a step in the direction of funding markets that operate on price as opposed to merely quantity.

By , The Wall Street Journal, 07/22/2013

MarketMinder's View: Most of this we categorize as the usual seasonal market mythology. But at a higher level, this is a great illustration of presently half skeptical, half optimistic investor sentiment. We’d suggest reading it with that in mind. 

By , Bloomberg, 07/22/2013

MarketMinder's View: Statements such as this are subject to change, of course, but this seems like a step towards quelling recent volatility in the halls of Lisbon’s government—a factor that’s likely contributed to similar volatility in Portuguese sovereign debt.

By , Time Business , 07/22/2013

MarketMinder's View: Bankers seek to maximize their return—just like they would in the tech, agricultural, real estate and virtually every other sector. Regulatory action won’t change that incentive and may lead to even riskier, more reckless behavior for those seeking profits.

By , Reuters, 07/22/2013

MarketMinder's View: Monthly volatility is normal and housing data is no exception. The main takeaway here is the housing market has been recovering nicely for months, and likely continues to do so as housing remains historically affordable.

By , The Telegraph, 07/22/2013

MarketMinder's View: Primarily, we disagree with the underlying assumption here of gold’s being an inflation hedge. Historically, that’s simply proven to be untrue—like many myths surrounding gold. Stocks have better proven to keep up with inflationary pressures over time, which remain very low globally.

By , The Wall Street Journal, 07/19/2013

MarketMinder's View: Detroit’s bankruptcy will be tough on those directly impacted, but it shouldn’t have much impact on capital markets. Even large municipal bankruptcies have historically had little (if any) impact on stocks, and Detroit’s financial issues have long been widely known in municipal debt markets.

By , The Wall Street Journal, 07/19/2013

MarketMinder's View: Prime Minister Shinzo Abe has suggested he’ll unveil more economic reform plans after Sunday’s election, assuming his Liberal Democratic Party wins a majority. Whether he pursues the deep changes Japan needs—and whether he has the clout and perseverance to push them through tough opposition—will be key for Japan over the months ahead.

By , The Wall Street Journal, 07/19/2013

MarketMinder's View: While this plan would likely create winners and losers, it has little chance of becoming reality exactly as written in the near term. Corporate tax reform is incredibly difficult for legislatures to pass, and plans likely get watered down or scratched altogether over the next several months, if not years, which should mitigate the potential market impact. For more, see our 7/18/2013 cover story, “Carbon Dating Politics.”

By , Associated Press, 07/19/2013

MarketMinder's View: Portugal’s not out of the woods, but this suggests its beleaguered government has more political capital than many fear, which should help resolve some of the ongoing political uncertainty. For more, see Scott Botterman’s 7/3/2013 research analysis, “Portuguese Politicking.”

By , Bloomberg, 07/19/2013

MarketMinder's View: Since Moody’s lowered its US outlook to negative on August 3, 2011, the S&P 500 has risen about 34% —proof ratings agencies’ decisions just aren’t predictive for stock returns.

By , Bloomberg News, 07/19/2013

MarketMinder's View: This is an incremental but noteworthy step toward a freer financial system and should give banks more room to compete. However, it’s likely not a game-changer for China’s economy—removing the cap on deposit rates would be more meaningful.

By , CNNMoney, 07/19/2013

MarketMinder's View: Creating incentives for shale gas production should help foster the industry’s UK development and bring a new source of growth to the UK economy.

By , The Wall Street Journal, 07/18/2013

MarketMinder's View: A sign of growing UK economic strength, as retail and housing—gross mortgage issuance rose 26% y/y in June—both reported strong quarterly performance. The UK economy has improved recently—after the Bank of England ceased its quantitative easing (QE) program, perhaps showing the end of QE isn’t as bad as some fear. For more, see today’s cover story, “A UK Perspective on QE.”

By , China Daily, 07/18/2013

MarketMinder's View: Despite recent concerns with China’s slowing growth, rising foreign direct investment is a sign of long-term investor confidence in the world’s second-largest economy. For more about China, see our 7/16/2013 cover story, “Cracks in the China?” 

By , Dow Jones Newswires, 07/18/2013

MarketMinder's View: Clearly, a difficult decision for Greek politicians—particularly after the recent layoff of 2,700 workers from the state-run news outfit led some members of the coalition government to resign. With that said, Greek leaders don’t seem to have many choices other than to plod forward. All in all, this seems another move illustrating the lengths leaders will go to preserve the euro.

By , Bloomberg, 07/18/2013

MarketMinder's View: After the recent extensions delaying the implementation of the Affordable Care Act’s employer mandate, many are looking to see whether the individual mandate will be similarly delayed. This is one step in that direction and is, in our view, a story worth following. For more, see our 7/17/2013 cover story, “Carbon Dating Politics,” and Managing Editor Lara Hoffmans’ column, “Yes We (Kicked The) Can!”

By , Bloomberg, 07/18/2013

MarketMinder's View: Ideally, outdated legislation prohibiting US oil exports gets suspended or removed altogether, which would benefit American businesses and global consumers—a win for all, in our view.

By , The Telegraph, 07/18/2013

MarketMinder's View: In our view, calls for further QE in order to boost US and global credit seem to get QE’s impact backwards. The flat yield curve brought by the Fed’s QE seems to be a factor behind slow US loan growth in this expansion, as it makes lending less profitable. A tapering of QE likely reduces that pressure, perhaps giving the economy a lift.

By , Associated Press, 07/18/2013

MarketMinder's View: Giving banks additional flexibility to free up credit for investors may provide a slight economic tailwind for the eurozone.

By , Reuters, 07/17/2013

MarketMinder's View: None of Bernanke’s remarks were new—he simply clarified what slowing QE means for the overnight rate (two fundamentally different things): Tapering QE-related bond purchases doesn’t require hiking the overnight rate, which likely remains low for a while.

By , The Wall Street Journal, 07/17/2013

MarketMinder's View: Overall, that the UK won’t purchase more assets is old news—QE purchases ended there seven months ago. That hasn’t been disastrous for the UK economy, and may in fact have been a positive: The yield curve has steepened and PMI surveys have started accelerating nicely.

By , BBC, 07/17/2013

MarketMinder's View: In our view, it’s telling the US’s shale boom renaissance has inspired a natural gas facility initially meant to import natural gas to switch to exporting in under two years—and exporting an abundant source of energy is likely an economic positive for all involved.

By , The Telegraph, 07/17/2013

MarketMinder's View: We agree 2008 wasn’t a black swan, but long-term forecasts like this are fraught with peril. The upside for those who make them is no one checks back. The downside to investors is these aren’t actionable and likely don’t come true.

By , Financial Times, 07/17/2013

MarketMinder's View: If not the market—then what? An undeniable fact about pricing liquid assets is they’re only worth what a buyer will pay and a seller sell—regardless of where and by whom the price is set. Not allowing a free market (and, therefore, all its participants) to ascertain that through supply and demand distorts prices and hurts consumer and producers alike.

By , Reuters, 07/17/2013

MarketMinder's View: This seems a step in the right direction for France—a country with a contracting economy and notorious for its public spending, government subsidies and restrictive regulation. Reducing government spending and red tape likely frees up potential for the French private sector, and overall economy, to grow.

By , BBC, 07/17/2013

MarketMinder's View: Whether this legislation passes the Indian cabinet remains to be seen—similar changes have been rejected there before. But should it become law, easing the terms of foreign investment in India likely helps open up and boost its economy.

By , Financial Times, 07/17/2013

MarketMinder's View: Thailand’s buying rice to support farmers may have started with good intentions, but—like all subsidies tend to do—has distorted the market and cost its government money. For more, see our 10/05/2012 commentary, “Of Rice and Men.”

By , The Wall Street Journal, 07/16/2013

MarketMinder's View: We agree: “…The only certainty about financial regulation is that it never prevents the next crisis.” It’s also often not great for stocks. In this case, extending efforts to fight “too big to fail” to the insurance industry likely brings unintended consequences and could create uncertainty for Financials.

By , The Globe and Mail, 07/16/2013

MarketMinder's View: It is true public sector cuts can be difficult for many in the short term. But in the long run, as long as policymakers marry spending cuts with economic reforms, the private sector should grow in its place—just as private-sector growth is offsetting government cuts in the US now.

By , The Telegraph, 07/16/2013

MarketMinder's View: It could also hurt consumer spending, which would weigh on economic growth, and it wouldn’t necessarily create a level playing field for Internet and brick-and-mortal retailers. The alternative proposed here—cutting the UK’s crippling taxes on commercial real estate—would better foster competition and likely provide an economic tailwind. For more on online sales taxes, see our 4/24/2013 cover story, “Tax Shenaniganery.”

By , Reason, 07/16/2013

MarketMinder's View: Yes, higher interest rates would make US debt less affordable, but rates aren’t guaranteed to rise as high and for as long as forecasted here. Long-term forecasts are fraught with peril, and the numbers used seem rather arbitrary. More importantly, it would take a high, sustained increase in interest payments to materially impact US interest costs, giving markets plenty of time to digest it. For more, see Jacob Gamble’s 3/12/2012 column, “US Debt Perspectives.”

By , Real Clear Markets, 07/16/2013

MarketMinder's View: As this piece highlights, innovations and technological advancements don’t necessarily spur unemployment. To the contrary, they can increase productivity and foster growth in new areas—like new product and service industries—and new sources of corporate earnings (good for stocks). “Technological progress is not a trick we have played on ourselves to throw ourselves into poverty. It is a means for fulfilling our material wants and needs and continues only to the extent that it does so.”

By , The Wall Street Journal, 07/16/2013

MarketMinder's View: Job growth may not quite be back to pre-recession levels, but we hardly agree this recovery is “jobless”—nor is it “phony” for that matter. For example, the private sector has gained 7.2 million jobs since the end of the recession and the economy is showing myriad signs of strength. Yes, the labor force participation rate is down, but this appears tied more to population growth than a shrinking workforce.

By , Xinhua, 07/15/2013

MarketMinder's View: Fears of slower growth in China are spurring more chatter about implementing structural reforms. In our view, doing so would help give the country stronger prospects for longer-term growth—and likely provide a tailwind to Chinese stocks.

By , Bloomberg, 07/15/2013

MarketMinder's View: India is proposing to fine wind-power firms that fail to forecast tomorrow’s wind—perplexing and potentially another incremental headwind for investors who dabble in renewable energy, particularly given the rising importance of Emerging Markets as a growth engine in recent years.

By , Project Syndicate, 07/15/2013

MarketMinder's View: An interesting look at how tapping into shale-gas fields could benefit the UK’s economy.

By , The Washington Post, 07/15/2013

MarketMinder's View: This seems to spend a lot of time addressing only a small part of issues in the ratings space. What about regulation that utilizes and enshrines the big three raters’ opinions in bank regulation (and other forms)? What about the regulation creating the “issuer pays” model that dates to the 1970s? Thankfully, we hardly agree ratings agencies “occupy … a crucial place in the financial landscape”—markets and investors largely ignore their late-to-the-game upgrades or downgrades.

By , MarketWatch, 07/15/2013

MarketMinder's View: While these regional Fed surveys are volatile and don’t represent a very broad picture of the economy, recent data continue to suggest the underappreciated economic expansion continues.

By , The Wall Street Journal, 07/15/2013

MarketMinder's View: Though China announced Q2 GDP growth in line with expectations of 7.5% y/y, many still fret the global ramifications of a slowdown of the second largest economy. In our view, it may not return to the double-digit growth it previously experienced, but overall growth is still relatively healthy. For more on China’s economic growth, see our 7/11/2013 cover story, “China’s Trade Blues.”

By , BusinessWeek, 07/15/2013

MarketMinder's View: Thanks to technological advancements, drilling companies are developing more effective and efficient ways to frack—a positive development, in our view.

By , The Wall Street Journal, 07/15/2013

MarketMinder's View: We disagree with the notion the returns in this bull market are wildly beyond that of typical bull markets—and that GDP is directly linked to stock returns. (See the data in our article here from the TheStreet.) Furthermore, nominal GDP isn’t evidence Corporate America is in a “revenue recession” and one quarter of flat revenue growth—centered in 3 of 10 sectors—seems like a microscopic data set as well.

By , The Wall Street Journal, 07/12/2013

MarketMinder's View: The headline offers sound advice, but the predictions of future corporate profitability seem awfully dour and not grounded in reality. Corporate profits and government spending aren’t inversely proportional—businesses can do just fine while the government pulls back, just as they have for most of this expansion.

By , Bloomberg, 07/12/2013

MarketMinder's View: Officials seem to be setting investors’ expectations for slower growth over the period ahead—not surprising considering their ongoing efforts to reengineer the economic model away from easy infrastructure and export-led gains. Markets likely don’t need gangbusters Chinese growth to do just fine, though. Even at a slower rate, it adds a ton to global trade and GDP, and the financial reforms necessary for this economic shift are long-term positives.

By , BBC News, 07/12/2013

MarketMinder's View: Considering Ireland has issued debt on primary markets at favorable rates since last year, this decision seems rather late—just more evidence investors shouldn’t rely on ratings agencies for timely information.

By , The Wall Street Journal, 07/12/2013

MarketMinder's View: Resurrecting Glass-Steagall would likely increase Financials’ regulatory uncertainty without much mitigating the risk of future financial crises—Glass Steagall likely wouldn’t have prevented 2008’s cascade of failures. The institutions failing then were pure investment banks or thrifts, none of which fall under the Glass-Steagall umbrella. That said, Congressional gridlock gives this little chance of passing.

By , Der Spiegel, 07/12/2013

MarketMinder's View: Brazil’s political situation bears watching, but protests typically have little direct capital markets impact. Legislative attempts to placate protestors could introduce unintended consequences down the road, but for now, this risk appears low—in fact, efforts to reduce corruption could be longer-term positives.

By , The Wall Street Journal, 07/12/2013

MarketMinder's View: The differences between today and the late 1970s are far too numerous to mention here. We agree the Fed’s quantitative easing isn’t working, but ending it would be a positive, in our view—the yield curve could steepen, which would enable higher bank lending and swifter economic activity.

By , The Wall Street Journal, 07/12/2013

MarketMinder's View: Strong June financing data are encouraging, but we’d suggest taking them with a grain of salt. The government’s crackdown came after huge financing gains in June’s first 10 days, so the headline results don’t necessarily indicate China’s overall money supply trajectory. July’s data will likely be more meaningful.

By , Der Spiegel, 07/12/2013

MarketMinder's View: Latvia’s attempts to compete with the rest of the eurozone needn’t increase the risk of economic destabilization. Foreign capital didn’t cause Cyprus’s problems—banks’ ill-advised decisions on how to invest that foreign capital played a much greater role.

By , Associated Press, 07/12/2013

MarketMinder's View: Portugal’s political situation bears watching, but it’s likely not a game changer for the nation or eurozone. Other countries (ahem, Greece) have weathered similar theatrics over the past four years, but officials have overwhelmingly shown the ability to compromise when needed. Considering Portugal’s two main parties signed the bailout memorandum, the likelihood Portugal reneges on its commitments is ultra-low.

By , China Daily, 07/12/2013

MarketMinder's View: FDIC-style deposit insurance may not have the direct economic impact predicted here, but China’s economy and markets should benefit from a backstopped, more transparent financial system. This would likely also improve competition within banking by removing one of smaller banks’ biggest obstacles to attracting deposits.

By , The Wall Street Journal, 07/11/2013

MarketMinder's View: This suggests the bond market is “no longer safe.” But bonds have never been safe—they have several innate risks, and their prices can decline, just like stocks. No investment can ever offer “higher than normal yields without risk.” Chasing this investment unicorn likely causes investors to stray very far from the right strategy for their long-term goals.

By , CNBC, 07/11/2013

MarketMinder's View: China likely slows, but the assessment here seems overwrought—June exports are just one month of one volatile data set. Other metrics throughout Q2 pointed to continued growth. More importantly, slower Chinese growth needn’t hold back this global bull market. Many other fundamentals support rising stocks looking forward. For more, see today’s cover story, “China’s Trade Blues.”

By , The Telegraph, 07/11/2013

MarketMinder's View: The issues discussed here, like Greece’s struggle with austerity measures and Italy’s lackluster growth, have been widely discussed for years, and not much has changed. Markets seemingly realize the eurozone periphery will remain weak for some time. But member states and politicians remain committed to the common currency and likely keep muddling through.

By , Associated Press, 07/11/2013

MarketMinder's View: Yet another sign of a strong (if underappreciated) US economy.

By , Der Spiegel, 07/11/2013

MarketMinder's View: Should the EU’s plans for centralized bank oversight go through, it seems the ECB will have the power to shut down banks that cannot prove their “financial health”—an extremely vague description—which could increase uncertainty down the road. This isn’t guaranteed to pass as Germany has already contested it, but the debates bear watching.

By , BloombergBusinessweek, 07/11/2013

MarketMinder's View: Banks in the US and EU will now only have to comply with one set of swap-trading requirements, averting potential legal overlap, conflicts and confusion—a welcome break in the regulatory clouds.  

By , The Pittsburgh Tribune, 07/10/2013

MarketMinder's View: While free-trade agreements are economic positives, the fact we even need to free trade from government-imposed restrictions in itself is a negative. In an ideal world, all already-voluntary trade would be free from rules and regulation. See our 07/09/2013 cover story for more.

By , CNN Money, 07/10/2013

MarketMinder's View: If, in theory, a lower corporate tax would encourage US companies to do more business domestically, a high repatriation tax rate would conversely disincentivize them from returning. Further, we’d argue just about any private investment in the US incrementally helps the whole economy, regardless of who initially benefits most.

By , Bloomberg, 07/10/2013

MarketMinder's View: By creating a transparent secondary bond market and improving the financial system’s architecture, Chinese officials should make it easier for large firms to raise funds via corporate debt. That should alleviate their reliance on bank lending, freeing up bank capital for small and mid-sized firms—a positive, necessary development.

By , MSN Money, 07/10/2013

MarketMinder's View: More QE likely won’t do much to further reduce unemployment. Because it disincentivizes bank lending by flattening the yield curve, banks aren’t tapping into newly created excess reserves—leaving fewer resources for businesses to put toward growth and, eventually, job creation. In our view, the sooner QE ends, the better for jobs.

By , CNBC, 07/10/2013

MarketMinder's View: Illustrating incentives matter, states ranked highest here have relatively low taxes and costs and high ease of doing business—two are also known for their shale oil production. Not incidentally, the lowest-ranked states have high taxes and costs and generally aren’t as business friendly.

By , Bloomberg, 07/10/2013

MarketMinder's View: Developing a resolution plan and backstop fund for failing banks could remove some bailout uncertainty. But removing national regulators’ authority appears unpopular with member states, which could limit the likelihood of this proposal passing in the European Parliament. However, markets are used to EU changes moving slowly or stalling, which should mitigate the market impact of ongoing politicking.

By , Bloomberg, 07/10/2013

MarketMinder's View: As this suggests, June’s export drop reflects some statistical rejiggering. Chinese authorities recently admitted many businesses falsely reported high exports in previous months, inflating national tallies. They’ve cracked down, but they didn’t revise previous reports, which distorts the year-over-year comparisons. Thus, the June figures aren’t necessarily a net negative—though Chinese trade remains something to watch.

By , Associated Press, 07/10/2013

MarketMinder's View: The US employment situation has been improving for a while—these data further confirm the trend.

By , Yahoo! Finance, 07/09/2013

MarketMinder's View: Making government more efficient is a laudable goal, but it’s easier said than done—Congress has to approve any and all cuts. “And members of Congress, as combative as they can be, typically want to protect the agencies they oversee, since that’s how they derive political power (and campaign contributions).”

By , The Washington Post, 07/09/2013

MarketMinder's View: Removing municipal bonds’ tax-exempt status likely brings myriad unintended consequences as retirees lose a popular tax-free investment vehicle and state and local governments likely lose revenue or face higher borrowing costs. Positively, due to strong opposition and political gridlock, it seems unlikely to pass Congress.

By , CNBC, 07/09/2013

MarketMinder's View: In our view, fund flows can sometimes offer insight into current investor behavior—but benefits beyond that are limited. Fund flows are backwards looking and don’t reflect future movement. They also don’t correlate with price movement—equity funds have had net monthly outflows more often than not during this bull market. For every seller, there is a buyer—and in an auction marketplace, buyers’ willingness to bid higher determines pricing. 

By , The Wall Street Journal, 07/09/2013

MarketMinder's View: Increasing leverage ratios and capital requirements leaves banks with less capital to lend and circulate into the economy—and isn’t guaranteed to make our financial system safer. In our view, allowing banks more flexibility would likely bring more growth.

By , Central News Agency, 07/09/2013

MarketMinder's View: Taiwan and New Zealand will sign a free trade agreement Wednesday—Taiwan’s first with a nation with which it has no diplomatic relations (a byproduct of Taiwan’s relationship with China and a frequent stumbling block for its free trade endeavors). This likely spurs growth for both nations over time, and it perhaps opens the doors for more Taiwanese trade agreements. For more, see our 7/9/2013 cover story “Free Trade!

By , The Telegraph, 07/09/2013

MarketMinder's View: While we agree supply-side reforms would greatly benefit the UK, the overall assessment of recent growth seems rather dour. Though there are some areas of weakness, the UK economy is showing fundamental signs of improvement—like a steepening yield curve and improving services, manufacturing and construction PMIs, to name a few.

By , The Wall Street Journal, 07/09/2013

MarketMinder's View: And, like many, they cited the potential negative global economic effects of a possible Fed “taper.” While many claim QE is the only factor propping up the US economy, evidence overwhelmingly suggests it’s a negative—tapering QE would only create more prospects for growth as it would steepen the yield curve and entice banks to lend more. There is also little evidence QE’s propping up global growth—US and UK net foreign investment outflows since QE began are much smaller than in years past.

By , Reuters, 07/08/2013

MarketMinder's View: A positive development, in our view, as delayed implementation of the ACA likely gives employers more time to adjust to the changes. The likelihood of key ACA provisions getting delayed, watered down or killed is one reason we expect minimal market reaction to the legislation from here. For more, see managing editor Lara Hoffmans’ latest Forbes column, “Yes We (Kicked the) Can!

By , The New York Times, 07/08/2013

MarketMinder's View: This is awfully dour, in our view. Higher interest rates likely incentivize banks to lend more, spurring business investment, growth and eventually job growth—unemployment is a late-lagging indicator, after all. For more, see our 6/10/2013 cover story, “Growth, Then Jobs.”

By , The Wall Street Journal, 07/08/2013

MarketMinder's View: This piece highlights well the benefits of innovation as the driverless car becomes more of a reality. And with innovation and technological gains come new sources of corporate profitability—great for stocks over time.

By , The Telegraph, 07/08/2013

MarketMinder's View: While increasing transparency in financial services is a benign goal, these proposals could introduce unintended consequences. The subjective language underlying rules with serious penalties and new limits on banker pay likely hinder financial firms’ employee hiring and retention or incentivize them to move operations outside of the UK.

By , BusinessWeek, 07/08/2013

MarketMinder's View: Official talks begin Monday for the Transatlantic Trade and Investment Partnership. Though negotiations likely progress slowly, all parties seem committed to reaching a deal for now—a positive for stocks.

By , Thomson Reuters Foundation, 07/08/2013

MarketMinder's View: The US’s Renewable Fuel Standard aims to reduce carbon emissions, but as this study shows, its ethanol mandates seemingly have the opposite effect. Just another example of the unintended consequences government intervention can bring—something investors should keep in mind.

By , Reuters, 07/08/2013

MarketMinder's View: Whether or not these plans come to fruition remains to be seen, but it’s encouraging to see the Basel Committee considering simplifying complex rules. Simpler rules would likely allow financial institutions to better adjust to and implement the global capital requirement standards. At the same time, even if the committee eases, national regulators may not follow suit.

By , The Wall Street Journal, 07/05/2013

MarketMinder's View: These differences ordinarily wouldn’t be terribly noteworthy, but it seems international regulators plan to use this study to “improve consistency” in risk-weighting globally—efforts worth watching as they could increase regulatory uncertainty and, potentially, introduce unintended consequences downstream.  

By , Associated Press, 07/05/2013

MarketMinder's View: China badly needs freer financial markets, and these plans seem a huge step in the right direction. But with details sketchy and the timing of these changes unclear, it remains to be seen just how much things will change and whether private firms will have an easier time accessing credit. For example, officials still need to define legitimate private financing, as the dividing line between that and “illegal fundraising”—a crime punishable by death—isn’t clear.

By , China Daily, 07/05/2013

MarketMinder's View: Expanding municipal debt issuance seems a sensible move in light of the Chinese government’s concerns about regional debt. Investors will likely be more discriminating than state-run banks. And if the market sends interest rates higher, local governments will have more incentive to curb debt.

By , The Yomiuri Shimbun, 07/05/2013

MarketMinder's View: Higher import prices—and their impact on manufacturers and other businesses—are a big reason the weaker yen hasn’t yet been a net benefit for Japan. For more, see Research Analyst Tim Schluter’s 6/27/2013 column, “May 2013 Japanese Trade Update.”

By , EUbusiness, 07/05/2013

MarketMinder's View: Continued negotiations between China and the EU are a positive sign for global trade, though loose export quotas might not be the best solution. Better, in our view, would be for both sides to stop subsidizing solar producers and allow markets to choose energy sources.

By , Associated Press, 07/05/2013

MarketMinder's View: Decades of evidence show employment gains don’t beget growth—it’s the other way around. The notion the US needs to hire at a faster pace in order for the economy to achieve escape velocity just isn’t true.

By , The Wall Street Journal, 07/05/2013

MarketMinder's View: More evidence of continued improvement in the US economy and labor markets.


By , Los Angeles Times, 07/03/2013

MarketMinder's View: A (much) lower, simpler corporate tax code would likely encourage business activity in the US, which would in turn increase competition, boost economic growth and add more jobs. And because the tax base would likely increase, tax revenues needn’t get dinged.

By , China Daily, 07/03/2013

MarketMinder's View: Since China’s recent interbank funding market pressures were largely a result of political engineering rather than an actual liquidity shortage, a vast money supply increase isn’t the answer. Instead, China needs to open its financial system and overall economy so capital can flow freely to where it’s most needed and productive.

By , NPR, 07/03/2013

MarketMinder's View: Well, considering US output’s at all-time highs and growing, we think it’s rather safe to say we’re doing “well.” Sure, there are headwinds, like the Fed’s quantitative easing, but consumers and the private sector appear pretty darned strong.

By , Bloomberg, 07/03/2013

MarketMinder's View: While the eurozone’s seen similar political flare-ups before, they haven’t significantly interrupted longer-term progress. We doubt this time’s much different. For more, see our 07/03/2013 cover story, “The Good, The Basel and The Eurozone.”

By , Bloomberg, 07/03/2013

MarketMinder's View: In our view, Japan’s economy would likely benefit from a nuclear plant restart—energy costs have tripled since before the Fukushima-Daichi disaster, and a weak yen makes energy imports even more expensive.

By , Financial Times, 07/03/2013

MarketMinder's View: Higher risk of bank capital flight likely is one potential unintended consequence of the EU’s bail-in plan for failing banks, but the steps offered here aren’t necessarily a fix. There is simply no panacea for ensuring bank health. For more, see our 06/28/2013 cover story, “The EU-turn on Banks.”

By , Reuters, 07/03/2013

MarketMinder's View: The main takeaway here is the service sector experienced growth in June. Further, monthly data are volatile—a slower month doesn’t necessarily portend future weakness.

By , Bloomberg, 07/03/2013

MarketMinder's View: A sensible outcome, considering the measure likely would have hollowed out EU financial services, increase industry costs and introduce other unintended consequences. Invectives matter: With smaller bonuses, businesses would offer other benefits—like higher salaries—to attract good employees, and with less discretionary compensation, executives would have less incentive to perform well.

By , Bloomberg, 07/02/2013

MarketMinder's View: US manufacturing strength is factual, not false—US manufacturing is extremely productive, output is close to all-time highs, and the US is a leading manufacturer globally. Scaling back international trade in an effort to “protect” an already-strong sector is both harmful and ill-conceived, as US companies benefit tremendously from a free flow of goods. For more, see our 05/02/2013 cover story, “Manufacturing Innovation.”   

By , The Telegraph, 07/02/2013

MarketMinder's View: The IMF’s threat to withdraw from Greece’s bailout if the government doesn’t meet certain conditions seems a political ploy aimed at goading Greek policymakers into action. This isn’t unlike the troika’s previous threats to withhold Greek aid, which have always resulted in compromise and Greece getting its money. Markets likely realize this.

By , EUbusiness, 07/02/2013

MarketMinder's View: Freer trade between the EU and Central America is a positive for global trade and markets.

By , Der Spiegel, 07/02/2013

MarketMinder's View: Under Chancellor Merkel’s leadership, Germany has compromised as necessary to support the EU and common currency. But now she needs to curry favor with as many voters as possible, which means reaching out to euroskeptic Germans. This is likely a political maneuver and doesn’t necessarily mean Germany is withdrawing its support for pro-EU policy.  

By , Bloomberg, 07/02/2013

MarketMinder's View: Continued manufacturing is another example of the US’s underappreciated economic strength, which can be a tailwind for stocks.

By , Central News Agency, 07/02/2013

MarketMinder's View: The influence of the Fed is, in our view, greatly overstated, and the Fed’s QE “exit” seems to be widely misunderstood. In this case, folks seemingly believe a massive wave of “hot” QE money has flooded Emerging Markets, and once the Fed tapers, foreign capital will retreat—but there’s scant meaningful evidence this is true.

By , Associated Press, 07/01/2013

MarketMinder's View: As always, past performance is never a guarantee of future returns—but stocks go up more often than not and big up returns happen much more often than people commonly assume. With fundamentals like a strengthening housing market, record-high corporate balance sheets, increasing private payrolls and healthy GDP, it’s likely the rally keeps up through the end of the year.

By , The Wall Street Journal, 07/01/2013

MarketMinder's View: History shows these debt ceiling debates are nothing to fret over. Congress has raised the largely meaningless marker 107 times since 1940, so it’s likely they’ll just raise it again—after a little politicking and can-kicking, of course.

By , Bloomberg, 07/01/2013

MarketMinder's View: While manufacturing is a relatively small slice of the UK economy itself, the latest reading is another in a relatively long list of indicators pointing to accelerating growth.

By , Bloomberg, 07/01/2013

MarketMinder's View: While the reading of 48.8 is below the 50 mark (the dividing line between growth and contraction), it’s an improvement month over month and better than analysts’ estimates. Just another factor showing the eurozone doesn’t seem to be heading into an economic abyss.

By , MarketWatch, 07/01/2013

MarketMinder's View: Manufacturing snapped back from May’s slight dip in June, logging better-than-expected growth.

By , Korea Times, 07/01/2013

MarketMinder's View: Though we’re all for Korea working to boost corporate investment, providing tax cuts for specific firms is essentially picking winners and losers. We’d posit lowering corporate tax rates across the board would incentivize these firms, and more, to spur Korean economic growth.

By , Project Syndicate, 07/01/2013

MarketMinder's View: As this piece posits, perhaps prospects of slower growth may be just what China needs to implement “structural reforms … to achieve its longer-term goal of more balanced and stable GDP growth.”