Stock futures rose modestly this morning, with the Nasdaq leading gains as AMD shares rallied 11% after announcing a major multiyear AI partnership with Meta to deploy up to 6 gigawatts of GPUs and potentially acquire up to 160 mln shares. The announcement reinforced continued heavy investment in AI infrastructure despite broader market volatility. The rebound followed a selloff yesterday amid fears of AI-driven disruption to software (see IBM) and cybersecurity firms, tariff escalation toward a 15% global rate, and geopolitical tensions. Investors remain cautious ahead of another product announcement from Anthropic, which could further disrupt the software sector, prompting some traders to avoid risk until there is more clarity. Investors are also looking ahead to tonight’s State of the Union address, which is expected to be a politically charged speech from Trump as he faces declining approval ratings and growing uncertainty about his economic and immigration policies. Closer to home, Bank of Nova Scotia kicked off Canadian bank earnings beating estimates.
The recent tech rotation doesn’t seem to be happening in China, with China’s stock market defying the global AI scare trade, with investors buying AI developers rather than selling tech stocks out of disruption fears. While U.S. investors worry that AI will erode profits at software and financial firms, Chinese investors are focused on growth opportunities, driving huge gains in companies like MiniMax and Zhipu, whose shares have skyrocketed in recent weeks. Strong private funding rounds, bullish analyst forecasts, and expectations that cheaper Chinese AI models will accelerate adoption have fuelled optimism. Still, some analysts caution that valuations may be running ahead of earnings potential, and that broader disruption risks could eventually weigh on corporate profits if AI adoption reshapes entire industries.
On the road again. Mark Carney is embarking on a nine-day trade mission to India, Australia, and Japan as part of Canada’s strategy to reduce reliance on the U.S. and strengthen economic ties in the Indo-Pacific. He will begin in Mumbai to meet with Indian Prime Minister Narendra Modi and business leaders, then travel to Canberra where he will address Australia’s Parliament, the first Canadian prime minister to do so in two decades and meet Prime Minister Anthony Albanese to discuss defence and AI. The trip will conclude in Tokyo with Prime Minister Sanae Takaichi, where discussions will focus on clean energy, critical minerals, and food security, reflecting Canada’s push to diversify trade, deepen strategic partnerships, and align with fast-growing economies in Asia and the Pacific.
Japan’s manufacturing sector is improving, expanding at its fastest pace in roughly four years in February. Japan’s PMI rose to 52.8, driven by strong domestic demand and the fastest growth in export orders in eight years. The recovery appears to be broadening, as services activity also remained strong and the composite PMI climbed to 53.8, its highest level since May 2023, signaling solid overall economic momentum. Firms reported improving demand, increased pricing power, and rising optimism about future activity, helped by new product releases, strong semiconductor and AI-related demand, and political stability following Prime Minister Sanae Takaichi’s election victory. While rising input costs led companies to increase prices, the overall outlook suggests Japan’s economic revival is gaining traction, with both manufacturing and services contributing to sustained growth.
Movie theaters are facing renewed uncertainty just as they begin recovering from the pandemic, due to Netflix’s potential takeover of Warner Bros. Discovery. The concern is that Netflix could shorten theatrical exclusivity windows, encouraging faster shifts to streaming and reducing theater revenue. Although Netflix has promised a 45-day theater window, the industry worries this may not be a long-term commitment. The U.S. box office is expected to grow 12% to about $9.7 billion in 2026 thanks to major franchises, but a merged Netflix-Warner could reshape film distribution and weaken theaters’ negotiating power. Attendance remains about 30% below pre-pandemic levels, with higher ticket prices and operating costs putting pressure on profitability.
And the survey says… A new poll conducted by Nanos Research for The Globe and Mail confirms a shift in Canadian attitudes toward the U.S. When asked whether “the United States is a trustworthy ally of Canada,” nearly 50% disagreed and another 27% somewhat disagreed. The survey of 1,009 Canadians, conducted Jan. 31 to Feb. 4 and accurate to within +/- 3.1%, found that 67% are concerned Canada’s security is threatened by the U.S., with one in five believing a U.S. invasion is likely. More than 75% report boycotting American goods or services and over half have cancelled travel plans. At the same time, 44% now support increasing trade with China, a sharp reversal from 2022, reflecting how perceptions of Canada’s economic and security alignment have shifted. Pollster Nik Nanos said it remains unclear whether this marks a lasting rupture or simply a “recalibration between neighbours”. Only time will tell.
Mexico travel questions? Recent unrest in and around Puerto Vallarta led to flight cancellations, though airlines are now resuming service as conditions stabilize. Air Transat, Air Canada and WestJet announced they are resuming flights to Puerto Vallarta and other affected destinations, while maintaining short term flexibility policies that waive change fees or offer credits and refunds in certain cases. Similar flexibility has been introduced by Sunwing and Porter. If your flight was cancelled, you remain entitled to rebooking or a refund under Canada’s Air Passenger Protection Regulations, with potential compensation depending on whether the disruption was deemed within the airline’s control. Hotel and trip refunds generally depend on whether you purchased cancellation or interruption insurance and whether Ottawa has an advisory to “avoid non-essential travel” for your specific region. Canadians are encouraged to monitor the Government of Canada’s travel advisory for Mexico at https://travel.gc.ca/destinations/mexico and review advisory levels at https://travel.gc.ca/travelling/advisories. Safe travels everyone.
Diversion: Wait, which proposal was mine?
