TQ Morning Briefing
American business grew at its fastest pace in more than four years this month. The survey closed on the twentieth. Two days later the United States and Canada went to a tariff war.
Friday's tape rested on two things.
A survey saying business is booming. And a deal everyone expected.
On Friday the President said the two sides should be able to reach one. All three big indexes closed higher. All three ended the week lower.
The talks broke down that night. New tariffs on Canadian goods took hold after midnight.
Futures are lower and the Nasdaq is taking most of it. The ten year Treasury yield is higher again. The dollar is firmer and the Canadian dollar is the weakest major on the board.
Canadian Pacific Kansas City (CP) hauls freight from Canada to Mexico under one owner. Every Canadian load it takes south now crosses a border that changed on Saturday.
Market Implication
The volatility index jumped far more than the tape fell. That is not a growth scare. It is the market paying for cover on a question it cannot date.
There's a Strategy Behind the Iran War.
I know because I've seen the evidence firsthand.
On March 2nd — three days after the first missiles hit — I sat across from two U.S. Congressmen in back-to-back private meetings.
Those meetings pointed me toward something I spent weeks verifying.
The real purpose behind the strikes. The real objective. And the single company at the dead center of all of it.
This isn't random. It's a calculated Two-Front Economic War.
And there's one company positioned right at the heart of it.
See the strategy behind the Iran war — and the company at the center of it
The sooner you understand what's really happening — the better positioned you'll be before August 12th.
— Dylan Jovine, Founder, Behind the Markets
The new tariff runs at the top rate the law allows.
Half the value of the good.
Read what it covers. Dairy. Beer, wine and whisky. Cement. Hockey gear.
Now read what it leaves alone. Steel, cars and lumber, because another tariff already has them. Then oil, gas, potash and critical minerals, because nobody else can supply them in time.
That second half is the tell. The duty lands where the United States had a choice.
There is no grace period. The duty attaches when a truck clears the border, whatever day it left the plant.
So freight that rolled south on Friday under one rule got billed under another. Nobody repriced it. It was already moving.
A Duty With No Expiry Date
The duties rest on Section 338 of the Tariff Act of 1930.
No president has ever used it to set a tariff. No court has ever read it.
It lets the President hit a country that treats American trade unfairly. It never defines that.
Structural Setup
The cost is known. Its life is a guess. Importers pay and file, the way they are still filing on the tariffs the Supreme Court threw out in February. Every quarter it holds is margin. Every quarter it fails is a refund claim.
The Survey Closed Before The Border Did
The flash survey landed on Friday morning. Output grew at its fastest in more than four years.
The field work ran from the twelfth to the twentieth. The duty landed two days after that.
So the best reading in four years describes a border that was still open.
Nothing that led on Friday clears a truck at the Canadian border.
The names that do closed as if the deal was coming. Railroads. Brewers. Cement.
Half the tape has new information this morning. The other half has none.
Sector Read
Watch cross-border rail carloads before the share price. It is weekly and moves long before an earnings call. Beer, cement and dairy reprice on a shelf much later. The train tells you first.
The REAL Reason Trump Is Invading Iran
For a moment…
Forget about Trump’s ties to Israel.
Forget about reports of Iran’s nuclear program.
Because my research has led me to believe we’re risking World War 3 with Iran for a completely different reason.
Click here to find out what it is.
If you have even a single dollar invested in the U.S. stock market, this is going to directly impact you.
Canada's Answer Has A Date On It
Canada will match the new American tariffs dollar for dollar. Prime Minister Mark Carney said so at the weekend and named the targets.
Steel. Dairy. Appliances. Farm equipment. Pulp and paper. Electronics.
The measures start on the Tuesday after Labour Day. That is September 8.
Two weeks is a long time in a supply chain. Sellers on that list can push goods north first. Expect a rush, then a hole.
A three day pause last week bought talks and nothing more. No new round is booked.
Watch Signal
Watch whether Canada spares goods that qualify under the North American trade pact. It lifted its counter tariffs on those exact goods last September and kept only metals and autos. If it spares them again, dollar for dollar is a headline and not a number.
The Quarter Closed In Between
Bank of Montreal (BMO) and Bank of Nova Scotia (BNS) report tomorrow before the open.
Their quarter ended on the last day of July. The duty was signed on the twentieth and took hold on Saturday.
So it was dated and pending while the books were open. Read the provision line.
A bank charges for two kinds of credit loss. Loans already gone bad. And loans that might go bad.
The second is the provision on performing loans. It moves on a forecast. No borrower has to miss a payment.
So two banks have to price a trade war that was dated inside their quarter and arrived after it.
Neither set of statements is audited. Both are still the first numbers filed on this, and they land before any American company has spoken.
The Read
The provision on performing loans is the only forward looking line in the release, and it moves the sector. Royal Bank of Canada (RY) and Toronto-Dominion (TD) follow on Thursday. If the first pair build and the second pair build more, the banks are telling you September 8 is real.
Jim Rickards Predicts: Trump's Next Big Buy
This tiny $2 stock holds the exclusive rights to the largest gold reserve in the country.
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Economic Data: Chicago Fed National Activity Index for July, 8:30am ET. Treasury sells 3-month and 6-month bills, 11:30am ET.
Fed Speakers: None scheduled. Chair Kevin Warsh speaks at Jackson Hole on Friday, 10:00am ET.
Earnings: PDD Holdings (PDD), XPeng (XPEV), NAPCO Security Technologies (NSSC) before open | Tuya (TUYA) after close. Palo Alto Networks (PANW) does not report today. The company has confirmed Tuesday September 1.
Overnight: Nikkei 225 -0.7%, Shanghai Composite -0.6%, FTSE +0.02%, DAX -0.01%
Two dates sit in front of this market. Only one is on a calendar.
September 8 you can plan around. Canada's answer lands and its targets learn the price.
The other date has no number. It is whenever a judge first reads Section 338 of the Tariff Act out loud. Ninety-six years of silence tell you nothing.
At 8:30 the Chicago Fed publishes its July activity index. July is the last full month before the border repriced.
If the market calls this a cost, industrials and food names wear it. If it calls this a court case, nothing reprices until someone sues.
Nobody has to choose today. The trucks queued at the crossing this morning already have.