Daily Commentary

MarketMinder’s View: Here is an update on trade talks between the US and Canada. According to “Sources who were recently briefed on the matter,” trade negotiators, perhaps motivated somewhat by the Trump administration’s additional (if limited) 50% tariffs on select Canadian items set to take effect August 19, are nearing a draft deal to put in front of the US president and Canadian Prime Minister Mark Carney. Details are sparse on what is in the deal. Apparently talks have targeted not only avoiding the new tariffs, but lifting sectoral tariffs on Canadian steel, aluminum, lumber and autos—and negotiators are seeing it as a step toward an extension of the US-Mexico-Canada trade agreement. That seems like a pretty sizable list. Now, we don’t think this is hugely market-moving, as the USMCA is the key to it and that remains in force—and the new 50% tariffs will hit only about 5% of US imports from Canada. But if there is progress toward a deal (or deals) here, that would be a relief for stocks. (Perhaps most significant would be the aluminum tariffs, as these have been in place since early 2025 and the US has very little domestic production to replace it with—nor is much new production set to come on line in America. Canada has a comparative advantage here due to power costs that wouldn’t be easy to close.)

MarketMinder’s View: This article claims the German government is taking a huge gamble by not intervening and forcing its utilities to import vast quantities of natural gas now—ahead of winter—in order to fill reserves toward the 80% or 90% marks the European Commission sets ahead of winter. After all, gas heats some 30% of homes in Europe and is essential for Germany’s huge chemicals industry. But here is the thing: Those targets are arbitrary guides established in 2022, amid the panic and recession fear from clampdowns on Russian gas. The “risk” is basically that prices may rise. But they may also fall, if the Strait of Hormuz reopens and Qatari gas flows freely. Or US and Norwegian gas production and exports ramp up more. Or or or. Beyond this, it isn’t as if Europe would have little to no access to supply. Back in 2022, part of the issue was a lack of liquefied natural gas import infrastructure. That isn’t the case now. And even then, when prices were vastly higher than today, a hugely damaging recession didn’t ensue. In other words, the case for the government intervening now isn’t very strong—and intervention could actually cause prices to artificially boom today. For more, see our 7/31/2026 commentary, “Don’t Fret the EU’s Low Summertime Gas Storage Levels.”

MarketMinder’s View: Here is a good look at a flaw that has emerged in a widely reported data point that is garnering attention this morning—which is skewing the series and drawing some to compare current measures of consumer credit stress to 2008. “The Federal Reserve Bank of New York’s gauge of credit-card loans that are 90 or more days past due has been rising steadily since about 2023, prompting concern about how people are faring in today’s economy. Many of these delinquencies fall into the bucket of ‘severely derogatory’ loans, meaning lenders have generally deemed them uncollectable. They remain on credit reports far longer than they used to. Between 2004 and 2012, about 40% of borrowers’ charged-off debts were still being reported one year later. By 2024, this figure had doubled, New York Fed researchers said in a blog post published Tuesday. When the researchers used a different calculation that removed severely derogatory balances, they found that the pace of delinquencies stabilized after 2024.” (Boldface ours.) So the comparisons to 2008 are clearly off base. And, “The Fed’s quarterly data analysis on consumer debt, also published Tuesday, showed delinquency rates across consumer loans appeared steady in the second quarter. Overall debt balances declined by $13 billion in the second quarter. Mortgage and student-loan balances marked a slim decline, while home-equity lines of credit, credit-card balances, auto loans rose.”