Daily Commentary

MarketMinder’s View: No stock market or current economic implications here. We share this as this year isn’t just America’s 250^th birthday. Adam Smith’s seminal work, The Wealth of Nations was first published 250 years ago this week. This, often considered capitalism’s foundational text, is too often diminished by surface level critique that truly doesn’t deal with Smith’s work on its own merits, instead painting his work as championing a “greed is good” mentality he never espoused and completely overlooking his earlier work, The Theory of Moral Sentiments. This is a decent article discussing that point, highlighted (in our view) here: “Maybe we often misunderstand Smith’s project of morals and markets because he was more concerned with seeing and understanding how societies work than in advocating any particular course of action. His recommendations are well known, and the classical liberals he inspired (an endangered species, sadly) advocate them still: liberty, rule of law, limited government, competition, free trade. Yet he had little time for theoretical abstraction and delighted above all in observing and disentangling unforeseen or unintended consequences. As a result he ranged far beyond economics, as it’s now understood, through moral and political philosophy, sociology, and social psychology. He was driven by curiosity more than conviction.”

MarketMinder’s View: In response to rising US prices at the pump, President Donald Trump is reportedly considering issuing a 30-day emergency waiver of the Jones Act, the 126-year-old requirement that only US-built ships can transport goods from one American port to another. The idea is that import-reliant areas like the West Coast (which relies disproportionately on fuel imports from the Persian Gulf) would see some relief from more available shipping capacity, as fuel from the Gulf of Mexico or East Cost moves more easily on foreign-built ships. Fine enough. The Jones Act is and has always been a dumb, protectionist law that does nothing but make the US economy less efficient. But as this article rightly notes, the influence here is likely pretty small as it pertains to gas prices today. After all, crude oil prices heavily sway movement in gasoline, and a significant portion is also state taxes. We are all for any change that would make the US economy more efficient. But this isn’t a gamechanger. Now, all that being said, gas prices are a fairly small slice of US consumption, so even the uptick we have seen lately is unlikely to fundamentally hammer stocks or economic growth.

MarketMinder’s View: This article quite obviously dives into politics, so please note we favor no politician or political party, assessing developments solely for their potential market effects. At issue here: There is growing talk of the Senate eliminating the filibuster rule to pass the SAVE America Act and fund the Department of Homeland Security, presently enduring a partial shutdown. Whatever you think of those bills, though, the central issue here is that the Senate, supposedly the more deliberate wing of the US Congress, requires 60 votes to advance non-budget-related legislation past an opposition filibuster. The Republicans don’t have 60 votes to move these measures forward now. But this piece documents one GOP senator’s position on the idea of changing or eliminating the filibuster as a result. For markets, we see potential issues with this eliminating the rule. It would mean much more active legislatures when the president’s party has slim majorities, like today. That isn’t great for stocks, considering such active legislatures create winners and losers, shift the rules of the game midstream and dissuade long-term investment. Still, even with the documented senator’s shift: “The Senate has 53 Republicans, and it would take 51 votes to change the rule. At least four GOP senators have publicly said they oppose such a move: Sens. Thom Tillis of North Carolina, Mitch McConnell of Kentucky, Lisa Murkowski of Alaska and Susan Collins of Maine. Moreover, if either party tried to carve out exceptions to the filibuster for favored legislation, the rule likely would effectively end for all legislation.” So we don’t think this change looks likely to happen right now, but more flip-flopping on the issue would make us more concerned.