Daily Commentary

MarketMinder’s View: This touches on politics and mentions a few individual stocks, so please keep in mind MarketMinder favors no politician nor any political party, assessing developments solely for their potential economic or market effects. And we don’t make individual security recommendations. In the course of documenting a congressperson’s recent push for more steel tariffs and government backing for the steel industry, this article recounts a little-known and illuminating history: Steel tariffs aren’t new, never worked and actually undercut the industry itself, to a great degree. This article walks through that in some depth, noting importantly that “The policies discouraged quality improvements and led to overinvestment and inflated labor contracts, merely postponing the necessary adjustments.” And of course they would postpone investment. Most of the tariffs in question had expirations, leading to mass uncertainty. This is a side effect of tariffs too many gloss over: If an industry requires government “protection” to operate profitably, fear that the protection will go away will always be an overhang. As this notes, “Sixty years on, the scoreboard is unambiguous. Domestic steel production was lower in 2024 than in 2017, the year before President Trump imposed major ‘national security’ tariffs on steel imports. Capacity utilization was lower in 2024 than in 2015, and employment was lower too.” All in all, with tariffs back in the news, we think underreported effects like these are worth revisiting.

MarketMinder’s View: The latest evidence of America’s better-than-expected economy amid today’s flurry of fears comes courtesy of S&P Global’s flash composite purchasing managers’ index (PMI), which rose to 56.0 in August from July’s 54.5 (figures above 50 represent expansion). The composite gauge combines manufacturing and services, and both showed growth. The services gauge rose to 56.8, its highest since March 2022—an encouraging sign, given America’s services sector contributes between 75 – 80% of GDP (per the World Bank). This would suggest the lion’s share of America’s economy is in fine shape. While manufacturing inched down from 53.9 in July to 53.2, this is still nicely expansionary. lt points to US factories expanding solidly—extending a 13-month run in the black, which coincides with improvement and recent growth in factory output data. Lastly, we think it is worth highlighting that “input costs expanded in August at the slowest pace since the start of the Iran war.” Hiring improved, too. We don’t see joblessness or inflation as real risks today and those comments help add some evidence to that. PMIs—surveys of the breadth of growth and not its magnitude—don’t provide a perfect or complete picture of any economy. But the underrated activity this reveals helps explain why stocks have been climbing this year.

MarketMinder’s View: Since the Iran war’s start, we have written at length about how global economies are adapting to disruptions in the Strait of Hormuz. This piece rounds up some clues as to how the world’s second-largest economy has acted to keep energy prices down. Namely, “Fuel-export curbs spurred refineries to cut back on processing. Travelers flew less, deterred by price increases. A shift toward coal paid off. And Chinese authorities tapped oil reserves that had been socked away before the war.” China (the world’s number one oil and gas importer) was quite reliant on both Russia and Iran for its oil, more than many peers. So earlier in 2026, when war tensions were starting to ramp, it massively increased import activity and stockpiled. This cooled global demand more than many expected back during April and May, when prices were near their apex for the year. Now, with workarounds in place and more oil reportedly exiting the Strait via tankers that aren’t reporting their positions, it is more confirmation that even economies as massive and import-reliant as China can adapt to such challenges, mitigating the global effect on oil prices and keeping China, a source of global demand, growing.