Launch Pad

Where’s the bristol board? The Trump administration has introduced a new tariff framework imposing duties of 10% to 12.5% on imports from roughly 60 trading partners under a Section 301 forced-labour investigation, replacing the broader tariff regime that was struck down by the U.S. Supreme Court. Countries including Canada, Mexico, the UK, and India will generally face 10% tariffs, while Japan, South Korea and Switzerland will see duties capped at 12.5%, with exemptions for products such as energy, food, fertilizers, and goods covered by existing North American trade agreements. Although the new measures leave current tariff levels at current levels, experts have warned that they could allow for additional tariffs targeting excess manufacturing capacity, creating even more uncertainty for global trade, inflation, and economic growth. This comes after the U.S. proposed a 50% tariff on selected Canadian goods, with the federal government pushing back and saying that Canada is prepared to consider all retaliatory measures if negotiations with the U.S. fail. 

Government debt across developed economies is expected to reach a record $75.8 trillion by the end of 2026, driven by fiscal deficits, higher defence spending, aging populations, and elevated borrowing costs following a series of global crises. Fitch expects the U.S. to remain the largest contributor to debt accumulation, with the biggest budget deficit among major developed economies, while debt burdens continue to rise across Europe despite modest declines in bond yields since the Iran war began. Although AI could support long-term economic growth and improve debt sustainability, credit rating agencies have warned that it may also create fiscal challenges through labour market disruption and weaker tax revenues. 

Strategists are becoming bullish on U.S. transportation stocks, arguing that the freight recovery remains in its early stages with further upside as improving manufacturing activity and low business inventories support a broader recovery in freight demand. While the initial rebound has been mostly supply-driven, helped by tighter trucking capacity, higher freight rates, and stronger pricing power, some expect demand to become a large driver over the next 6–12 months as inventory restocking and factory output accelerates. The combination of improving volumes, favourable pricing, and operating leverage from cost reductions implemented during the freight downturn, are expected to drive earnings growth across the sector. Within transportation, ground transportation and air freight & logistics are favoured, with a preference for railroads over trucking companies following trucking’s strong YTD rally. Although risks remain from higher tariffs, elevated oil prices, and the potential for further Fed rate hikes, the sector’s earnings outlook and industry fundamental remains encouraging. 

Investors increased bearish bets against the Canadian dollar to their highest level among major currencies ahead of new U.S. tariff announcements, reflecting concerns that trade tensions will weaken Canada’s economic outlook. While higher oil prices have helped stabilize the loonie in recent weeks, uncertainty surrounding U.S. trade policy, softer Canadian growth prospects, and a widening interest rate gap with the U.S. continue to weigh on the currency. Investors remain cautious ahead of the August tariff deadline, with markets expecting the BoC to keep interest rates unchanged while the Fed maintains a relatively more hawkish stance. 

Good Will Hunting Claude Fable. Looks like the experts are even getting AI to help them with their math homework. Anthropic has achieved another major mathematical breakthrough by disproving an 87-year-old Jacobian conjecture by producing a counterexample, marking what many researchers consider the most significant mathematical breakthrough involving AI to date. While many view the result as a significant milestone, they have pointed out that current AI systems only generate correct solutions without providing the intuitive reasoning or explanation behind the solution. So, while researchers see AI becoming a powerful mathematical collaborator, it’s clear that for the time being, human insight remains essential for interpreting and understanding new results. How do you like them apples? 


Diversion: Cubs and clubs  
 

Wheat is hitting a two-year high in Chicago and Paris, as escalating geopolitical tensions and worsening weather in key producing regions continued to stoke supply concerns. Futures in Chicago advanced as much as 2.2% and are heading for a fourth weekly gain, while Paris wheat prices are up about 5% this week. Grain markets have been pushed higher as Russia and Ukraine intensify attacks on each other’s export corridors, disrupting flows just as harvests are in full swing. The two countries together account for more than a quarter of global wheat exports and about 10% of corn. Weather in key growing regions is adding another layer as scorching temperatures have dented production prospects in major producers France and Germany, while grain output in the European Union is projected to fall by more than -9% this year, the steepest drop in more than two decades. In the key U.S. wheat-growing state of North Dakota, searing heat is stressing spring crops and threatening yields.