Daily Commentary

MarketMinder’s View: Though often conflated, inflation—economywide price changes reported in the Consumer Price Index (CPI) or Personal Consumption Expenditures (PCE) price index—is different from your own cost of living. That is because your consumption basket probably differs substantially from the aggregate of what everyone buys. A college student, for example, likely weighs educational costs more than healthcare—and vice versa for a senior (not in school). Or consider homeowners versus renters. But that isn’t the only reason why you shouldn’t use inflation as a measure of living costs, as this article underscores. When the Bureau of Labor Statistics compiles CPI, it uses “hedonic” adjustments to account for changes in products’ qualities. “What if the camera or processor in my iPhone is better than last year for the same amount of money? ... And that’s how you get smartphones registering as 12% cheaper in April 2026, compared to April 2025, in the latest Consumer Price Index print—because, when adjusted for feature parity, they are. This leads to some pretty insane results. For example, according to the official CPI data for smartphones, prices (read: quality-adjusted prices) have dropped 65% since the start of 2020 in the United States.” Even though in dollar terms, a smartphone costs more than it did six years ago. Sure, you may be getting more (quality) for your money, but that in no way is ever reflected in people’s actual pocketbooks. On the flipside, this also enables CPI to capture annoyances like “shrinkflation,” where a company holds the price steady while decreasing size or quantity (think shrinking a bag of chips from 12 ounces to 10 while keeping the price at $5.79). When it comes to personal finance—and financial planning—taking your own living costs (current and future) into account is far more relevant than what could be making adjustments naively based on government measures of inflation, whose purpose is to track whether there is excess money in the system.

MarketMinder’s View: Here is a good look at how the global energy supply picture has changed in recent years, muting fears of shortages in the wake of Middle East disruption. For example, regarding natural gas, “U.S. output, which grew again in recent weeks with the opening of the Golden Pass LNG [liquefied natural gas] terminal on the Texas coast, has helped keep global prices much steadier than in 2022, despite the Hormuz closure. South Korea, Spain, Italy and France each bought at least 50% more U.S. LNG in March than they did in February before fighting broke out in the Persian Gulf, according to LSEG.” Look at the charts herein, and the same basic story holds for crude oil and other petroleum products like propane (widely used for home heating and cooking and restaurant kitchens in Asia). With the Persian Gulf no longer the world’s dominant energy supplier, its grip on global markets has also waned—even if many outlets continue peddling an outdated view of its importance. This gap between sentiment and reality is what we think stocks have been pricing since late March’s lows.

MarketMinder’s View: This centers on one company’s announcement, so we remind you MarketMinder doesn’t make individual security recommendations and features this for the broader theme—tariff developments—only. Tariffs are old news for stocks at this point, but we think it is helpful for investors to revisit why. After last April’s “Liberation Day” tariff announcement, stocks rapidly priced in worst-case scenarios, including a feared 1930s Depression replay, with tariffs hitting their highest rates since then. But stocks continually look ahead around 3 to 30 months, weighing whether reality in that timeframe will match current priced-in expectations. They were back to hitting new highs last June. Reality, as it turned out, wasn’t nearly as bad as many first thought. Tariff refunds today highlight what stocks spied out of their V-shaped recovery last year. With US companies now redeeming at least some of the roughly $130 billion in International Emergency Economic Powers Act tariffs they paid out, reality keeps outpacing initial expectations while tariff news exerts ever-less influence over volatility.