1. Canada-U.S. Trade War Is Getting Worse
The trade war between Canada and the U.S. seems to be escalating.
The war of words is also escalating — primarily from the U.S. President Trump is calling for the name change of Lake Ontario to Lake America. VP Vance called Canada a state, etc.
Look, there will be a deal eventually. There will be TACO. Canada will concede on some of its positions too. But the uncertainty and fear of a trade war are going to hurt.
The longer this goes on, the longer the economy remains in a state of stalemate.
2. Lots of Economic Data This Week
Several data sets are due this week.
Today: some U.S. housing market data.
We get U.S. GDP tomorrow and Canadian GDP on Friday.
Also, on Friday for the U.S., we get the “Preliminary Benchmark Payrolls Revision.” This is going to be watched carefully, as it could tell us whether jobs were understated or overstated.
3. Canadian Banks Are Reporting
Canadian banks are starting to report.
A few things to keep in mind:
- Headwinds are likely coming from tariff-related issues, so guidance and what’s ahead are important.
- Watch for bad loans amount. Is it increasing or decreasing?
- Canadian consumers have a debt problem – way too much of it.
- Mortgage renewals are mainly done. 2025–2026 were big years. Not much broke.
- Overall valuations are getting a little bit frothy.
4. The Bond Market Isn’t Buying It
Even with the amount of U.S. Treasury interventions touted as being much higher now, yields on long-term bonds haven’t come down much.
This should be a little concerning. Why? Because the bond market is saying there’s an error happening.
Don’t forget that the bond market is massive, and it impacts the average person’s life probably more than the stock market on any given day.
Also, a lot of money is tied to the bond market. So, if something breaks, it becomes a big problem very quickly.
And remember U.S. bonds tend to have some gravitational pull. If U.S. yields rise, global yields also increase.
5. Gold, Bitcoin, Oil & AI
Gold is finding some sellers this morning. But the short-term trend continues to point up for now.
Bitcoin briefly crossed above $80,000, but couldn’t hold.
Oil is selling off a little.
Memory stocks are getting sold. Lots of hopes around Nvidia. Is the AI trade losing some steam?