Daily Commentary

MarketMinder’s View: Don’t look now, but Tax Day is six weeks away. The closer we get to that date, the more pressure and stress some people may feel—making them more susceptible to scams. As this article notes: “Tax-scam perpetrators often use fear, urgency and misinformation to pry loose personal information or steal money, according to tax professionals. These can include messages promising a surprise tax refund or demands for immediate payment to the Internal Revenue Service under threat of arrest or deportation.” So to prepare—not just your taxes—it helps to be aware of how these frauds operate. From those impersonating IRS agents and tax preparers to phony refund, debt-forgiveness and charity schemes, there are several hooks and lures to reel in unwitting victims. Read on to find out what to watch for and how to protect yourself, but a few broad points to keep top of mind this tax season. First, “IRS doesn’t initiate contact by email, text or social media to request personal or financial information, or threaten arrest.” So if you get any of those, ignore or report them. Relatedly, never divulge Social Security, credit-card or other personal information to any person or website unless you are sure of their credentials—especially if under duress. Then too, if it sounds too good to be true, it almost certainly is. When a proposition appears too tempting to pass up, that is when you should be even more alert and triple-check the terms, conditions and provider before making any leap. Lastly, don’t think it can’t happen to you. “Adults of all ages are targets, and about 21% lost over $1,000 or more to such scams, a recent McAfee survey finds. Ultimately, nearly 1 out of 4 people in the U.S. say they or someone they know has lost money to a tax scam, the survey said.” To keep an unappealing task from becoming a nightmare, a little extra attention can go a long way.

MarketMinder’s View: “The Institute for Supply Management’s services index rose 2.3 points to 56.1, the group said Wednesday. Readings above 50 indicate expansion, and the figure exceeded all projections in a Bloomberg survey of economists.” Now, purchasing managers’ indexes show only growth’s breadth, not its magnitude, but services’ broadening growth bodes well for Q1 economic activity. As the article notes, “Fourteen service industries reported growth in February, led by mining, information and real estate,” up from January, while those contracting shrank to three. Moreover, business expansion looks set to continue as, “The ISM measure of new orders climbed to a more than one-year high of 58.6. A third of service providers reported higher bookings, the largest share in three years. Export demand also strengthened notably.” The piece does sound a note of caution due to the recent US-Israeli attacks on Iran. While markets are dealing with the uncertainty, we don’t think it is very likely to have a large economic effect (as we outlined recently here and here). Regional conflicts are too small to disrupt expansion globally, as past Middle East fighting makes abundantly—and tragically—clear. Meanwhile, survey respondents’ focus on ongoing trade uncertainty indicates an overall level of caution persists despite the improvement in business conditions. Such guarded expectations give stocks more reason for positive surprise.

MarketMinder’s View: While the titular tariff hike is an economic negative, it isn’t shocking and serves to “replicate” the import taxes the Supreme Court recently struck down. The upshot: The new duty wouldn’t be much different from what the economy and markets have already experienced. It could also be temporary, as “[Treasury Secretary Scott] Bessent said the United States would be using a legal authority that allowed the president to impose an across-the-board tariff for 150 days unless Congress agreed to extend it.” Another potential difference than previously: “For some countries, such as Britain and Australia, that rate would be higher than what was agreed to on their exports to the United States. For others, like China, Vietnam, India and Brazil, the new rate would be significantly lower. ... The prospect of a 15 percent rate has upset Europeans, who would be subjected to an even higher import tax after the new tariff adds to preexisting levies on some products. The European Union agreed to a maximum 15 percent rate in their trade deal, and it sees such an arrangement as violating that.” Without details, we can’t say how it will all shake out—and there is reason to believe these new tariffs may yet be struck down, too. Given this was widely expected, and markets move most from surprises, we doubt the latest levy presents much of a headwind for stocks.