Daily Commentary

MarketMinder’s View: Since this gets political, please note MarketMinder is nonpartisan, preferring no party nor any politician over others, and focuses solely on developments’ potential market ramifications. As the short article summarizes upfront: “The UK government will legislate to grant Parliament the authority to directly approve major clean energy projects, a sweeping change designed to shield vital infrastructure from judicial reviews and accelerate economic growth.” While streamlining permitting processes to bolster Britain’s energy infrastructure may seem like a no-brainer, the actual projects (power lines, wind and solar farms and nuclear plants) tend to inspire grassroots opposition in local communities, which can tie them up in litigation. Curbing this would theoretically cut developers’ costs and give them more confidence to invest, which can spur growth (though we wouldn’t overstate this). But we also doubt whether this passes or stalls in Parliament will be a huge deal for UK markets. Even expedited grid additions could take years to complete—marginally more electricity supplies probably won’t light up British stocks much. The significance probably lies more in how this debate shapes the ruling Labour Party’s potential leadership contest, as it could feature in the by-election campaign Manchester Mayor (and would-be Labour leadership challenger) Andy Burnham is contesting in June to attempt to re-enter Parliament. His main challenger, the populist Reform UK, opposes these plans. This could prove to be a wedge issue of sorts. Stay tuned.

MarketMinder’s View: The headline here hints at how arduous trade deals’ paths are from negotiation to implementation. Almost a year after agreeing to make a deal, the EU has only now decided to “move forward” on a “provisional deal to remove some tariffs on U.S. imports as part of the bloc’s trade deal signed last summer, ahead of a U.S. deadline to ramp up tariffs on cars ... if Europeans didn’t implement the agreement by July 4, after U.S. officials grew frustrated with the pace of progress in Brussels. The trade deal ‘is expected to serve as a platform to continue engaging with the U.S. to lower tariffs and cooperate closely on shared challenges,’ the European Council said. The agreement reached Wednesday paves the way for a final vote in the European Parliament ahead of [US President Donald] Trump’s deadline.” As the article notes, the EU slow-walked passage pending tariffs’ legal challenges and other geopolitical tensions, while it also maintains a “slew of safeguards” that could yet suspend enactment. A couple things about this glacial process for investors. Although initial anticipation and handshake agreements receive reams of fanfare, the relatively boring procedural niceties that follow garner far less attention, often taking years to hammer out—with only marginal economic effects. Meanwhile, markets moved on from tariffs long ago, with each subsequent development having less of an effect, so we doubt it really mattered much which way this deal went—and we doubt the 2029 sunset clause is a big deal, either.

MarketMinder’s View: Is the Strait of Hormuz open yet? “Three supertankers were crossing the Strait of Hormuz on Wednesday carrying oil bound for Asian markets, after waiting in the Gulf for more than two months with 6 million barrels of Middle East crude on board, while another was entering, ‌shipping data on LSEG and Kpler showed. ... South Korean-flagged Very Large Crude Carrier (VLCC) Universal Winner, carrying 2 million barrels of Kuwaiti crude loaded on March 4, was exiting the strait following the departure of two Chinese tankers on Wednesday, the data showed.” Now, three tankers aren’t close to the “125 to 140 daily passages” pre-war, but with an average “10 vessels going into and out of the strait in recent days,” that is a mite better than none—and more than feared when conflict erupted. Of course, things could always get worse if negotiations fail and fighting resumes. But that outcome is on everyone’s minds—and markets’ radar. And since surprise moves markets most, what matters isn’t if things go badly (or well) in a vacuum, but whether they are worse (or better) than stocks anticipated. Some ships’ Strait passages show reality isn’t as disastrous as expected.