Zacks Investment Management

Steady Investor Weekly

Keeping up with market headlines is one thing. Understanding what they could mean for your portfolio is another. In this week’s Steady Investor, we take a closer look at the trends influencing markets and the bigger picture for investors, including:

• Consumer spending rises despite pessimism
• France fuels global bond concerns
• Tech leads stocks to highs

Consumers Keep Spending Despite the Gloom – Americans are not feeling especially upbeat about the economy, according to the University of Michigan’s Consumer Sentiment Index¹:

But Americans are still spending. Household spending rose 6.1% in the 12 months through August, up from 4.3% growth at the end of last year. Inflation accounts for part of that increase, but not all of it. Real, inflation-adjusted consumer spending still rose 2.6% from a year earlier and jumped 0.6% in August alone, its strongest monthly gain since March 2025. Spending is up across income groups, too. A New York Fed survey found spending rose 4.7% over the past year among households earning less than $50,000 and 4.4% among those earning more than $100,000. When readers look at the chart above, however, and hear stories about Americans souring on the economy, the contrast between sentiment and spending can seem striking. To be sure, there have been some trade-offs made to get here. The personal saving rate has fallen to 4.1% of after-tax income, and household debt has continued to rise, suggesting some consumers have less cushion than before. Even still, for investors it’s important to focus on what households do (spending data), not what they say (sentiment data).²

Keep Your Retirement Goals in Focus as Markets Change

Market swings and shifting economic conditions can make it easy to focus on your retirement balance. But the life you want to live deserves attention, too. Use this time to revisit when you want to retire, where you want to live, and how you want to spend your days.

Our free guide, 6 Secrets for Happy Retirement³, can help you turn those goals into a clearer plan, including:

• Aligning your retirement vision with your partner’s
• Choosing a retirement timeline that fits your needs
• Exploring where you want to live and what to consider before moving
• Making room for the activities and interests you look forward to
• And more…

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France Adds Another Flashpoint to the Global Bond Selloff – Rising government bond yields have become a global story, and readers have probably seen headlines this week about France’s deteriorating fiscal situation. French borrowing costs have climbed as investors wrestle with a large fiscal deficit, rising debt-service costs, and political uncertainty ahead of next year’s presidential election. France’s national debt stood near €2.9 trillion in August, while its budget deficit is expected to equal roughly 5.4% of GDP this year. One government estimate suggests annual debt-service costs could reach €124 billion by 2030.Those concerns have pushed the spread between French and German 10-year bond yields—a widely watched gauge of relative credit risk—to its widest level since the eurozone debt crisis in 2012. For readers who remember the ‘Greek sovereign debt crisis,’ France’s current position echoes that setup. What is perhaps more concerning, however, is that France is not alone. Government yields have also risen in the U.S., Germany, Japan, and the U.K., reflecting a broader mix of inflation concerns, elevated borrowing needs, and changing expectations for interest rates.⁴

10-Year Government Bond Yields of France, Germany, UK, Japan, and U.S.

For investors, we’d urge watching to see if weakness begins spreading more materially across European credit markets. At the same time, higher French yields do not by themselves signal an approaching contagion event. France continues to service its obligations, and its interest burden remains manageable today. The more useful takeaway, in our view, is that increasingly indebted governments worldwide are competing for capital in a higher-rate environment, which is what makes sovereign bond markets an important source of risk to watch going forward.

U.S. Stocks Hit New Highs, But “Breadth” Remains a Concern – U.S. stocks have continued reaching new highs, even with 10-year Treasury yields above 5% and oil near $100 a barrel. But we’re back to a familiar story about what’s driving stocks higher: Technology. The combined market value of the Magnificent Seven recently reached roughly $25 trillion, while fewer than half of S&P 500 companies were trading above their 200-day moving averages. That narrowing breadth has fueled concerns that the rally depends too heavily on a small group of companies, which is similar to the concern we’ve seen in previous years. Context is important here, in our view. The broader market is hardly standing still, as the equal-weighted S&P 500 was up over 12% year to date (as we write), compared with ~15% for the traditional market-cap-weighted index. That is underperformance, but it is not evidence that everything outside mega-cap technology is falling apart.⁶

Take the Next Step Toward the Retirement You Want – As you follow the markets, keep your bigger retirement goals in view. When will you retire? Where will you live? What do you want to spend more time doing?

Our free guide, 6 Secrets for Happy Retirement³, helps you explore these decisions, from choosing your retirement timing and location to making time for the activities and interests you enjoy.

Use it to clarify your priorities and start planning for a retirement that reflects them. Get your FREE 6 Secrets for Happy Retirement³ and take the next step today.

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