Financial Mindset

Chinese President Xi Jinping is now back in Beijing, following his three-day state visit to the U.S. During his time in Washington, Xi got a state dinner and a tour of the National Archives, where his host, U.S. President Donald Trump, showed him the U.S. Constitution and the first treaty between the U.S. and Qing-dynasty China. The record of actual achievements from the summit was small. Both sides said that Xi and Trump agreed to build a “constructive relationship of strategic stability on the basis of respect, fairness, and reciprocity,” and there were some small agreements involving trade and AI.  Markets had diverging reactions to the summit on Monday. Hong Kong’s Hang Seng Index rose 0.7%, while Mainland China’s CSI 300 dropped 2.2%.  Yet given how far apart the U.S. and China are on a range of important issues—trade, export controls, the status of Taiwan, and today’s conflicts in Ukraine and Iran —it’s not surprising that few outside observers expected much to emerge from ...

“They didn’t choose to buy these stocks, and they don’t really know what’s going on,” said Hera Hyeonseo Lee, a doctoral researcher at Binghamton University. About 54% of U.S. households have a 401(k), according to the Federal Reserve, and the overwhelming majority of these retirement plans default into cap-weighted index funds that buy all the stocks in the market and buy more of the biggest companies. “So whenever a company like Nvidia grows and takes up more of the S&P 500, the fund automatically buys more of it,” Lee says. That happens no matter how expensive or big the company gets, and it has long made good sense. “Market cap weighting isn’t a choice, it’s not a methodology, it just is,” said Jim Rowley, global head of indexing strategy and solutions at Vanguard. “Investors collectively have decided that one stock should be this large, or another stock should be this small.” Anyone who owns one stock or weighs a stock differently than the market consensus is activel...

Three oil tankers linked to Iran have been gradually making their way toward the U.S. after being seized by naval forces when President Donald Trump first imposed a blockade on the regime. The Tifani and Majestic X are now off the coast of Brazil after they were boarded in the Indian Ocean in April, according to Bloomberg . A third ship, known as the Lenore as well as the Davina , just cleared the Cape of Good Hope at the southern tip of Africa and is headed west into the Atlantic after being interdicted in the Indian Ocean in June. All three tankers are very large crude carriers, which can each hold 2 million barrels of crude. Brent futures are currently trading at about $106 per barrel. “Nearly six million barrels (valued at nearly $600M) of seized Iranian crude oil are quietly crossing the Atlantic Ocean towards the United States of America,” Tanker Trackers posted on X on Wednesday. The U.S. initiated its naval blockade in April, targeting ships att...

Work requirements for some Medicaid beneficiaries begin across the U.S. in January, the result of President Donald Trump’s big 2025 tax cut and policy law, and a handful of Republican-led states are imposing tougher rules than the law requires. At issue is how someone can prove they are  too medically frail  to work. While federal regulations say the state can take the recipient’s word for it for the first year, at least six states are requiring documentation immediately. There is a continuing push in other states to follow suit eventually. Advocates say that could create problems, especially for new applicants to the joint state-federal health insurance program for lower-income people. “Someone may not be able to work, but they can’t see a doctor because they can’t afford it. So they’re now applying for Medicaid,” said Jennifer Tolbert, director of state health policy and data at the research organization KFF. “But Medicaid is saying you need document...

Tens of thousands of people took to the streets in Madrid on Saturday to protest against Spain’s  housing crisis  and ask for protective measures for tenants, anti-fraud rules, and a ban on evictions without alternative housing. The protest came in reaction to the dramatic eviction on Wednesday of an 87-year-old woman from the  Madrid  apartment she had lived in for decades. “We’re here because housing is a problem that already affects all of society, all ages and classes,” said protester Dora Garcia, a 55-year-old nurse. “And we can’t keep maintaining this. Housing is a right and we don’t have it.” Taken out of her home on a stretcher in the upscale Retiro neighborhood, María del Carmen Abascal was greeted by protesters and supporters as she was loaded into an ambulance. Spanish media reported that Abascal’s father first rented the property in 1956 and she continued as the tenant after her parents died, during which time there was a rent cap. ...

Soaring Treasury yields are raising concerns in Congress as their precipitous rise in recent months further darkens the outlook for U.S. debt. The 10-year yield shot up to 5.23% on Friday, the highest level since 2007 and more than a full percentage point since right before the Iran war started. Meanwhile, the 30-year yield hit 5.49%, the highest since 2004. With oil prices up due to the Middle East conflict, AI hyperscalers spending hundreds of billions a year, the economy running hot, and U.S. debt now at $40 trillion, Treasury yields have already blown past the Congressional Budget Office’s long-term outlook. According to its  most recent forecasts  issued in February, the 10-year yield was seen at 4.1% this year, 4.2% in 2027, 4.3% from 2028 to 2031, and 4.4% from 2032 to 2036. Those projections seem quaint now. In addition to setting the pace on other borrowing costs, yields determine how much the Treasury Department must pay in interest on the U.S. debt, wh...

The 10-year Treasury yield topped 5% this past week, hitting the highest level since 2007 and blowing way past forecasts for borrowing costs over the next decade. According to the Congressional Budget Office’s most recent long-term outlook issued in February—before the Iran war spiked oil prices and inflation views—the benchmark yield was seen at 4.1% this year and 4.2% in 2027. The 10-year yield was expected to hover around 4.3% from 2028 to 2031, then tick up to 4.4% from 2032 to 2036. In addition to setting the pace on other borrowing costs, yields determine how much the Treasury Department must pay in interest on the U.S. debt, which can accelerate as rates go up. To be sure, an end to the war in Iran and lower energy costs would help bring yields back down, but that’s not the only source of upward pressure. The economy is running hotter, and the labor market is tight, meaning higher yields represent some normalization from crisis-era lows. The $40 ...