Daily Commentary

MarketMinder’s View: This piece touches on a couple of political developments, which isn’t our interest here. Rather, we highlight this in-depth look at California’s fuel prices to discuss a separate point: Global trends tend to outweigh local ones, but the latter still matter. Yes, the conflict in the Middle East caused global crude oil prices to jump, which has downstream consequences for products like gasoline and jet fuel. But global crude alone doesn’t determine prices you pay at the pump. As shared here, “California is isolated from the rest of US refining capacity. While three pipelines—Western Gateway, Sun Belt Connector and HF Sinclair—are planned to help transport more American refined products to the market, they are years away from completion. The state is set to lose roughly 280,000b/d of refining capacity with the closure of sites operated by Phillips 66 and Valero, said Rob Wilson, chief operating officer at East Daley Analytics, an energy intelligence company. Combined with earlier conversions and shutdowns, California’s supply has been structurally reduced.” That leaves California more reliant on imported gasoline and jet fuel, and alongside strict environmental regulations, sky-high taxes and high operating costs, it is little surprise the Golden State’s gas prices are the nation’s highest. While there isn’t a direct investment takeaway from this news, it is a useful reminder for investors to not overstate any one driver’s effect on prices—reality tends to be more complex. For more, see last month’s commentary, “Pain at the Pump Won’t Hurt the Global Economy.”

MarketMinder’s View: We agree the global economy turned out more resilient than most feared following April 2’s Liberation Day tariff announcement last year. Though “trade shifted substantially,” world exports hit record highs in volume and value last year. This was partly driven by AI-related shipments despite “controls on both exports and imports of some of this equipment,” and those shipments show no signs of slowing this year. How did global trade persist despite American tariffs? “China’s exports of intermediate and capital goods rose by $223bn in 2025, more than offsetting a reduction of $130bn in exports to the US. ... Overall, direct US-China trade fell by around 30 per cent in 2025. But the US replaced about two-thirds of the lost imports with purchases from other exporters, while Chinese exporters of consumer goods, such as electric cars and toys, cut prices by an average of 8 per cent to find new buyers. The Association of Southeast Asian Nations countries’ exports thrived in this new world.” Lastly, regarding trade restrictions, “[US President Donald] Trump’s bark was worse than his bite. ... he did not do all that he threatened.” Meanwhile, “his actions led neither to a cycle of retaliation against the US nor, crucially, to imitation of the aggressive US repudiation of World Trade Organization commitments and norms.” The concluding paragraphs discuss America’s future role in the world, which reeks of political bias and speculation—we suggest readers focus on the largely fine trade observations. Global commerce’s resilience is a big reason why world stocks rallied hard after last April’s correction: Reality exceeded dour sentiment. Keep this in mind with Iran fears swirling now.

MarketMinder’s View: “A private gauge of China’s manufacturing activity eased from a five-year high in March, though it stayed in expansionary territory amid rising price and supply pressures. The RatingDog [which works with data aggregator S&P Global] general manufacturing purchasing managers index [PMI] fell to 50.8 in March from 52.1 in February, according to a statement released on Wednesday. ... The RatingDog reading contrasted with a competing gauge released Tuesday by China’s National Bureau of Statistics, which showed that factory activity expanded at its fastest pace in a year, buoyed by robust demand and a rebound in production following disruptions stemming from the Lunar New Year holiday.” RatingDog’s PMI focuses more on China’s smaller, private sector manufacturers while the official PMI skews toward larger state-owned enterprises. With both over 50—indicating a majority of firms see expansion, though the magnitude remains unclear—they continue contributing to growth in China and global growth overall. Now, both PMIs also “pointed to a marked increase in price pressures,” as a cause of concern, but we would note before the Middle East conflict erupted, many feared the opposite—deflation—underscoring how interpretations of the data can swing wildly based on sentiment. As always, focus on fundamentals. With Chinese inflation running at 1.3% y/y through February (per FactSet), we don’t see much issue on either side. As the economists here conclude, China is “less vulnerable” and “more insulated” than most given “its diversified energy mix, alternative supply channels and domestic coal-chemical and green capacity that can cushion tighter energy and petrochemical inputs ...” Chinese economic resilience remains better than presumed.