TARIFF WAR, EH?

Trade negotiations devolve into personal insults from both sides

The rhetoric in the U.S.-Canada trade war is extreme: “They are among the worst Nations in the World to deal with. They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US!”, President Trump said yesterday on social media. “Someone should get these clowns to 'fall in line' or, the consequences for Canada will be far WORSE!”, he added later.

The language on the Canadian side has been pretty spicy too. “He has a lot of room to kiss my ass,” Ontario Premier Doug Ford said on Monday, referring to Trump.

Canadian Prime Minister Mark Carney, of course, has been feisty in defense of his nation—more so than his European counterparts. His political popularity at home is partially driven by the fact that he has stood up to the White House’s never-ending tariff demands. “We cannot accept what they have offered, and we will not give what they have asked,” he said when trade negotiations collapsed.

The New York Times has a must-read account of how the talks foundered. Here’s one detail that shows just how far apart the two sides are: Canada declined to end a ban on the sale of U.S. alcohol in Canada, and the U.S. in turn refused to lower tariffs on automobiles made in Canada to a level that would allow the Canadian auto business to remain sustainable. 

Experts believe 90,000 jobs could be lost in Canada if the two sides cannot reach an agreement by January 1, the deadline Trump has set for his new tariffs to kick in.

ONE BIG THING

Bessent didn’t mention China or Russia in the launch of ‘Operation Economic Outcast’

U.S. Treasury Secretary Scott Bessent announced “Operation Economic Outcast” yesterday, which he described as an intense barrage of economic sanctions against Iran that would set the stage for “regime collapse” in Tehran.

The sanctions will punish any country that does business with Iran, particularly in the areas of digital assets, technology, gold, aviation, and shipping, per the WSJ. The Treasury Department has “mapped every node, every facilitator and every network that Iran has used to smuggle oil and evade sanctions,” Bessent said. 

But his speech pointedly did not contain two crucial words: “China” and “Russia.” China is Iran’s biggest trade partner and buys 90% of Iran’s oil. Russia is a more minor partner, but has provided military assistance to Iran during the conflict. Here are the countries that will be most affected:

THE MARKETS

Stocks ignore political drama as traders wait for Nvidia earnings—and Bitcoin soars

Traders seem to be shrugging off the drama around Iran and Canada this morning. With Bessent giving few details on how his new sanctions against Iran will work—beyond a new list of 60 Iran-linked entities or individuals—and Trump’s threatened tariffs against Canada not arriving until January, investors seem to be assuming that cooler heads will eventually prevail. The price of oil declined below $90 per barrel and stocks in Asia and Europe largely rose. U.S. futures were up before the bell in New York after the S&P 500 closed down yesterday.

Bitcoin is the talk of the town this week: It’s up 25% over the past month after Trump called for Congress to pass the Digital Asset Market Clarity Act.

• S&P 500 futures were up 0.37% this morning. The index fell 0.28% yesterday. 
• In Europe, the Stoxx 600 was up 0.34% in early trading and the U.K.’s FTSE 100 was up 0.15% before lunch.
• Asia: South Korea’s KOSPI was up 0.68%. Japan’s Nikkei 225 was up 0.5%. India’s Nifty 50 was up 0.09%. China’s CSI 300 was down 0.24%. 
• Brent crude fell to $89 per barrel this morning.
• Bitcoin was at $79.8K this morning after rising 25% in the last month, and briefly exceeding $80,000 per coin.

At Nvidia, no good deed goes unpunished

Nvidia reports its Q2 FY2027 earnings tomorrow, an event that is likely to move the entire market—just maybe not for Nvidia. Wedbush’s Matt Bryson pointed out in a note this week that everyone is, again, expecting Nvidia to deliver stellar results by exceeding its prior guidance, as it did over the last three quarters. The company is constrained only by its ability to obtain enough components; demand far exceeds its capacity to supply. But as of today, the stock has been on a round trip: 10 months ago it traded at a peak of $207, right now it’s at $208. “NVDA has consistently exceeded consensus (and we believe delivered to buy side expectations), yet the stock is roughly unchanged from October of last year,” Bryson said in an email.

Yardeni: Stocks are cheaper now than they were in January

The S&P 500 has risen 12% year-to-date but, somehow, that has made it cheaper than the numbers would suggest, according to Ed Yardeni and Toby Hearst of Yardeni Research. “S&P 500 forward earnings has risen twice as fast as the S&P 500 stock price index so far this year. So the forward P/E has declined as the index rose to record highs,” they said in a recent email. “Investors are getting more earnings for their money than they were eight months ago.”

• The crispy KOSPI: The World’s Craziest Stock Market Has Turned Into a Fright Ride - WSJ

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Bosses are convinced Gen Z fakes Wi-Fi outages and sick days to sneak off in summer—but 1 in 2 senior managers are guilty of the same thing - Orianna Rosa Royle

Four firms control more than half of the world’s seed supply. Italian farmers are fighting back and returning to the bartering system - Catherina Gioino

Jamie Dimon and his wife, Judith, donate $12 million to 12 HBCUs—betting they’re the ‘springboard to success’ for the next generation - Sydney Lake

FTC moves to make retailers disclose use of ‘personalized pricing’ as technology now enables broad consumer surveillance - Joshua Hong

Asia’s founders are going global faster, sometimes even before they’re sure what their business is, says Stripe’s SEA MD - Angelica Ang

CHART OF THE DAY

The increase in computational power used by AI is almost literally off the charts

People underestimate just how fast computational power is being directed toward AI. The chart on the left is on a log scale, which makes the upward curve look flatter. But if the same chart used a linear scale, it would appear to be a vertical line soaring upward in the last couple of years, according to Deutsche Bank’s Adrian Cox.

NUMBER OF THE DAY: The scale of OnlyFans

$30 billion

The amount that OnlyFans has paid out to its creators since its founding in 2016. The company’s accounts for its most recent financial year, as reported by the FT, show it had revenue of $1.6 billion and profit of $715 million, with only 47 full-time employees. The number of creator accounts rose 9% to 5 million, and fan accounts rose 16% to 437 million. $6.2 billion was paid to creators last year after OnlyFans’ 20% cut. Also, $709 million in dividends was paid to late owner Leonid Radvinsky, who died from cancer earlier this year.

THE FRONT PAGES TODAY

US grain farmers face worst crisis in decades as Iran war sends costs spiralling - FT

Mark Carney's defiance of Trump has Canada cheering - Axios

Oura and Dunkin’ get ready to join IPO bonanza - WSJ

Burnham plans U.S. trip next month to lobby Trump on Ukraine needs - Bloomberg

SEC investigating near-implosion of AI hedge fund - NYT

Whiskey-soaked ‘Succession:’ Jack Daniel’s heirs in bitter family feud as $15B hostile bid looms - NY Post

ONE MORE THING

One does not simply walk into the Indian Creek Country Club

Jeff Bezos has spent $234 million buying property on Indian Creek Island, but they still won’t let him be a member of the golf club at the heart of it.

The initiation fee is close to $1 million, with annual dues of about $44,000, according to Fortune’s Joshua Hong. 

But the club has a certain old-school vibe it wants to maintain so it doesn’t let in any newcomers who might upset that. 

The club’s exclusivity has also put Bezos in company with several other extraordinarily wealthy people who have not managed to get through the gates. Meta CEO Mark Zuckerberg, Jared Kushner, and Ivanka Trump—Bezos’ fellow Indian Creek residents—have not been admitted either. 

Kushner and Ivanka Trump have likewise spent years cultivating relationships with the community. The couple bought land on Indian Creek and later expanded their holdings—to no avail, as far as the golf club was concerned.

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