Daily Commentary

MarketMinder’s View: First, this article touches on politics to an extent, so please keep in mind MarketMinder favors no politician nor any party. With that said, this is an insightful look at the questionable constitutionality of President Donald Trump’s sweeping tariff announcement last week. To enact the measures, Trump cited a national emergency that gives the White House broad authority to act unilaterally, without Congress. This is vital because there is next to no chance he could get Congress to pass a law authorizing those tariffs now, as the Republicans’ thin majorities and extant debate and dissention in the Senate and House over tariffs make clear. But is this end run around Congress really likely to withstand court challenges—some of which have already been filed? “Since 2022 the Supreme Court has been clear: When an agency (or the executive) claims authority to resolve a ‘major question’—a policy issue with ‘vast economic and political significance’—it must point to clear congressional intent. Tariffs—which reshape global trade, potentially cost American consumers billions, and disrupt entire industries—certainly qualify as major questions. Mr. Trump’s tariffs aren’t regulatory tweaks; they are transformative economic policies with far-reaching consequences. [The International Emergency Economic Powers Act’s] text offers no clear mandate for such sweeping actions.” There is also a growing groundswell in the Senate to rein in the president’s ability to use this act (and others like it) to enact unilateral tariffs. We shall see if that comes to pass, but it is a development worth watching.

MarketMinder’s View: This is a mixed bag of advice, in our view. It starts with a misperceived and miscast discussion of diversification, which it implies stems from mixing bonds and stocks. No. That is asset allocation, which is entirely different, as we showed yesterday. Diversification is owning multiple securities or categories within each asset class to defray security-, sector- or country-specific risks. And the longer-term asset allocation you choose should blend together stocks, bonds, cash and other securities with an eye on risk and reward characteristics commensurate with financing your longer-term goals. This, of course, can change in the short term should market conditions warrant it. But doing so in reaction to a market move is generally a mistake, as this goes on to sensibly counsel later. Furthermore, this makes a decent point about time horizon (boldface ours): “Most people under 50 have a long time before retirement, allowing them to invest more heavily in stocks. However, many people over 50 also have a long horizon during which to invest — potentially 15 to 30 years. That is because the majority of their savings will remain invested throughout much of their retirement, as they typically withdraw only small amounts annually to supplement income from Social Security and any pensions.” Even that may understate things. If your savings fund your retirement, your time horizon is at least your life expectancy. If you are 60, that can easily be 30 years or more today—especially if you have a younger spouse. All in all, hard as it may be, we think the ongoing correction is a call for calm—not action.

MarketMinder’s View: After South Korea’s Constitutional Court finally overcame staffing issues and upheld the ouster of now-former President Yoon Suk Yeol, the next step in reducing political uncertainty on the peninsula was the timing of a required snap election to choose his successor. Now that is set for June 3, and the race is beginning to take shape. This article is a nice, quick preview to that, highlighting the likely candidates and their poll figures at this early, pre-primary juncture. From here, political uncertainty should gradually fall as the final candidates emerge, a frontrunner gains traction and the vote ultimately occurs. This should be a relief for Korean stocks after the morass of two impeachments and an understaffed Constitutional Court stoked some uncertainty in recent months.