Daily Commentary

MarketMinder’s View: America’s manufacturing sector remained in the black in February, as the Institute for Supply Management’s (ISM’s) purchasing managers’ index (PMI) came in at 52.4 (readings above 50.0 indicate expansion). This beat analysts’ expectations, thanks to growth in 12 of the survey’s 17 industries—a sign the sector entered 2026 on pretty solid footing despite President Donald Trump’s tariffs adding costs for many factory importers. Unsurprisingly, though, there are some signs of tariffs’ negative effects. “Producers of miscellaneous manufactured goods said they were ‘spending significant effort to work with our supply base to mitigate tariff impacts.’ Machinery manufacturers reported that tariff policy changes affected ‘total acquisition costs and purchasing source decisions,’ adding that because of tariffs, ‘most raw materials used in manufacturing, such as steel and wire, need to be sourced domestically, and the cost keeps going up.’” Fair enough, and we appreciate all the detailed reporting here. But we think the article goes too far in implying this signals heightened inflation risk, with energy prices’ rise after the US’s war with Iran began rendering an inflation double-whammy and lower likelihood of Fed rate cuts. We think this shows where sentiment is—bleaker than where the year began—and creates more positive surprise potential. Tariffs raise the cost of some things, adding uneven pressure on the sector, but businesses adapt and adjust to continue growing. While prices of some goods may rise, absent a runaway increase in money supply (which isn’t happening now), it motivates substitution rather than inflation. And extrapolating a single trading day’s energy price swings into the future based on the outbreak of conflict is a very speculative analysis, in our view.

MarketMinder’s View: With financial fraud growing more abundant and technologically advanced, banks are stepping up to help thwart criminals—or, if you are more cynical, to limit their potential exposure to lawsuits. Regardless, some 1,500 financial institutions across the US have begun using AARP’s “BankSafe” program, which helps bank tellers and other employees recognize fraud as it happens. And that is a plus for sure. “Dr. Teaster’s analysis of data from BankSafe, during a six-month pilot in 82 financial institutions, found that participants were much more likely to report suspected cases and save customers money than a control group was.” The story here helps visualize this, as one local bank teller spotted a developing fraud case and stopped it—preventing one person from potentially losing $70,000. BankSafe’s growing popularity pairs with recent legislation supporting banks’ security endeavors, cutting against rising financial crime today. Listen, this kind of article is a plus both because of the fact it shows banks are acting to at least try and quell fraudsters, but also because the details of the story are increasingly common. And they are a reminder to all of the kind of urgency and embarrassment that fraudsters prey upon. The one thing we would add to this? It makes it all seem like only the elderly are at risk. That is wrong, wrong, wrong. Every demographic group has been victimized by frauds like these, so learning the basic issues from another person’s experience is good for anyone.

MarketMinder’s View: This is a useful look at a couple of methods American businesses are employing to mitigate the added costs of President Donald Trump’s tariffs. Chiefly, it profiles the “first sale rule,” which allows importers to pay customs duties on an earlier, lower price in a product’s supply chain (usually the manufacturer’s price) instead of the higher price an importer pays to a middleman. As the example herein explains, this is a key positive for US companies that rely on imported goods, as it helps cut down their total tariff payments—protecting their margins. Mind you, this method is receiving some heat in Washington. “In February, Sens. Bill Cassidy (R., La.) and Sheldon Whitehouse (D., R.I.) introduced a bill to end use of the first sale rule. They won support from White House trade adviser Peter Navarro, who said Washington law firms were exploiting loopholes to erode the effectiveness of Trump’s tariffs.” We will keep an eye on this, but ending the first sale rule probably isn’t a deal-breaker for the American economy. Other tariff-avoidance methods both legal and illegal (i.e., nearshoring, transshipping) remain options, perfectly legal exemptions to the tariffs abound, and most of the US economy is services, where tariffs aren’t so directly impactful. But capitalism always finds a way, and this is a good demonstration of that in action.