Daily Commentary

MarketMinder’s View: The metrics referenced here, including US stocks, surveys, regional manufacturing indexes, labor measures and consumer and business spending gauges, are all fine and informative in their own right. However, stocks are the only leading economic indicator—the others tell you what already happened, not where the economy is headed. Stocks also aren’t a perfect recession indicator considering they represent publicly traded firms—a major contributor to economic growth, yes, but not reflective of the entire private sector, either, and their short-term swings are generally sentiment driven and detached from economic fundamentals. As the old joke goes, stocks have predicted nine of the last five recessions. Whatever indicators you use, always keep their limitations in mind. And always remember to look under the hood, at the engine itself, rather than the dashboard alone. Sometimes indicators misfire.

MarketMinder’s View: Lots of politics here, so please note MarketMinder is politically agnostic, favoring no political party nor any politician. We assess developments for their potential market and/or economic effects only. We also don’t make individual security recommendations, and any companies named here are coincident to a broader theme we wish to highlight. In our view, the realities facing the oil industry discussed here remind readers why they should take politicians’ campaign promises with a grain of salt. President Donald Trump’s urging US oil producers to “drill, baby, drill” on the campaign trail hasn’t translated to a surge in domestic production. Rather, global forces have prompted energy analysts to revise future production outlooks downward. “Hurt by weakening demand and depressed prices, US oil output is now expected to shrink in 2026, S&P Global Commodity Insights projected on Monday. S&P estimates that US oil production will dip to 13.3 million barrels per day in 2026, a 130,000-barrel decline from its 2025 forecast.” As S&P’s head of crude oil research succinctly notes, “It is the level of oil prices that is the biggest factor in driving US production up or down,” and global supply and demand determine those prices. Considering some non-US factors (e.g., OPEC+’s plans to raise production) argue against falling supply any time soon, much-higher oil prices in the foreseeable future don’t look likely. For readers, remember no politician or government entity can dictate global markets. For more on this concept, see our February commentary “How Are Those ‘Trump Trades’ Doing?”

MarketMinder’s View: As always, we prefer no political party nor any politician and assess developments for their potential economic and market implications only. This subject also wades into some sociology—important societally but not a material driver of the economic factors affecting future corporate profits over the next 3 – 30 months. First, some background: “[President Donald] Trump said in a post on Truth Social that he will sign an executive order Monday to put in place a ‘Most Favored Nations’ policy ‘whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World.’ He said the order would be ‘one of the most consequential’ in the nation’s history and promised that it would reduce prescription drug prices ‘almost immediately, by 30 percent to 80 percent.’” Trump signed the order today that asks drugmakers to voluntarily lower prices for some medicines, but it didn’t include the aforementioned “Most Favored Nations” policy (at least for now), relieving some pharma firms. As drugmakers prepare to negotiate, there are a couple points worth considering here for investors. Price controls are generally economic negatives that tend to hurt supply (leading to higher prices), but the devil is in the details—which we have few of right now. Moreover, as the article notes, US courts shot down a similar Trump policy proposal back in 2020, so we wouldn’t etch this version in stone yet. Now, some uncertainty remains as we don’t know what negotiations between the drugmakers and the government will yield—a headwind for the Pharma industry. We will monitor progress here closely, and if the outcome ends up more benign than anticipated, the relief could boost markets. For more, see last year’s commentary, “A Look at Medicare Drug Price Negotiations and Pharma Stocks.”