General Market News

The S&P/TSX Energy Index surged 16% in July, becoming the top-performing sector in Canada's equity market. Despite this strong rally, Canadian energy equity ETFs saw CAD 244 million in net outflows, contrasting with CAD 18.2 billion in total inflows to Canadian-listed ETFs. The market showed narrow leadership with energy gains offset by declines in clean technology and tech stocks.

• Oil & Gas led performance with large-cap gaining 12% and mid-cap up 7%, while clean technology and renewable energy fell 6% in large-cap and small-cap segments
• Canadian-listed ETFs attracted CAD 18.2 billion in net capital including CAD 12.5 billion into equity ETFs, driven primarily by broad-market and international equity funds
• Canadian Natural Resources was the most actively traded large-cap stock with 257.6 million shares, followed by TELUS Corporation with 207.4 million shares

Target's stock fell 5% following backlash over a children's Halloween costume that consumers criticized as resembling a racist caricature. The retailer apologized and removed the 'Kids' Glows Under Blacklight Circus Clown Halloween Costume' from sale, but the incident adds to ongoing challenges including a difficult consumer environment and eroded trust from previous controversies.

• Target issued an apology stating the costume 'should never have been part of our assortment' and acknowledged it was 'especially hurtful for our Black guests, team members and partners'
• The 5% stock decline reflects market concerns about Target's 'fragile competitive positioning when merchandising missteps or brand controversy occurs,' according to Morningstar analyst Brett Husslein
• The incident compounds existing troubles for new CEO Michael Fiddelke's turnaround efforts, following previous controversies over the 2023 Pride Collection and DEI policy changes after Trump's return to office

Bitcoin tested $80,000 after surging 22% in a week following the U.S. Treasury Department's announcement to at least double long-term bond buybacks to a minimum of $4 billion starting September. The rally was fueled by $2.99 billion in crypto liquidations (eighth-largest in history) and $1.92 billion in bitcoin ETF inflows last week, the best week of 2026.

• Bitcoin peaked at $81,235 overnight Monday (highest since May 6) before easing to $79,200 Tuesday morning, paring its 2026 decline to less than 10%
• LMAX Group analyst Joel Kruger forecasts bitcoin's next major upside target at $83,000, calling the recovery 'only getting started' with substantial room to reach previous records
• Cryptocurrency stocks surged with Coinbase up 3.5% Tuesday (after rallying 26% last week), while bitcoin ETFs like iShares Bitcoin Trust (IBIT) formed fresh bases amid renewed institutional buying

India's Competition Commission is investigating global fragrance giants Givaudan, Firmenich, and International Flavors & Fragrances for alleged price collusion since 2024. This marks the second antitrust case against these companies in India, following earlier accusations of labor anti-poaching agreements. The investigation has been delayed after the CCI recalled its initial report due to inadequately redacted commercial secrets.

• The CCI's investigation report was recalled in July 2024 after Givaudan and IFF complained their commercial secrets were not properly redacted, potentially slowing the two-year-old case
• India's flavors and fragrances market is projected to double from $2.5 billion in 2024 to $5 billion by 2033
• The three companies are already facing multiple global antitrust investigations, including probes by Swiss, British, and European Commission regulators over similar collusion concerns

The U.S. is threatening to sanction Chinese banks that help Iran evade sanctions, potentially cutting them off from the dollar system. China previously bought roughly 90% of Iran's exported oil (about 12% of China's total crude imports), making it Iran's largest trading partner. While China has strong incentives to maintain dollar access, it is building alternative systems like CIPS as a hedge against U.S. financial pressure.

• U.S. Treasury Secretary Scott Bessent warned that entities facilitating Iranian sanctions evasion risk being cut off from the U.S. financial system as part of 'Economic D-Day' against Iran
• The U.S. dollar still dominates global payments at over 50% and nearly 80% of trade finance, while China's yuan accounts for only 8.4% of trade finance as of July
• China's Cross-Border Interbank Payment System (CIPS) transactions have increased since 2022, with 157 financial institutions globally participating, serving as a geopolitical hedging tool rather than a full dollar replacement

U.S. stock futures edged higher on August 25, 2026, with the Nasdaq 100 up 0.7% rebounding from tech weakness, while markets awaited Nvidia earnings after seven consecutive down days, new Fed Chair Kevin Warsh's Jackson Hole speech, and key economic data including PCE inflation. Bitcoin surged above $80,000 for the first time in three months amid Treasury bond market intervention concerns.

• Nvidia stock declined for seven straight sessions ahead of its highly anticipated earnings report, making it the most-watched results in the market
• Bitcoin rallied past $80,000 for the first time in three months as Treasury bond market intervention sparked dollar debasement concerns, while gold also advanced
• Key economic data releases include ADP employment, new home sales, manufacturing data, and Wednesday's PCE inflation print, with Fed Chair Kevin Warsh set to deliver his first speech at Jackson Hole

Russia is set to extend its diesel export ban through September due to persistent domestic fuel shortages, with some sources indicating the ban could continue through year-end. The shortages stem from multiple refineries remaining idle following Ukrainian attacks on Russian oil infrastructure. The government initially imposed the ban from July 8-31 and has already extended it once through August 31.

• Russia has also banned exports of gasoline until January 31, 2027 and jet fuel through November 2026 for non-producers
• Fuel shortages re-emerged in some regions in August despite a brief improvement in late July when local restrictions were eased
• Deputy Prime Minister Alexander Novak claimed there is no diesel shortage domestically, noting several refineries have completed maintenance and resumed fuel supplies

UBS expects the Federal Reserve to keep interest rates unchanged at 3.5%-3.75% despite pressures from a strained housing market and strong AI investment. Fed Chair Kevin Warsh faces competing forces as mortgage rates hit 6.66% and housing sales decline, while tech companies plan $820 billion in data center investments. The bank views AI-driven inflation pressures as temporary bottlenecks rather than signs of broader economic overheating.

• The FOMC voted 9-3 in July to hold rates steady, with three regional presidents dissenting in favor of an immediate increase as 30-year mortgage rates reached a one-year high of 6.66%
• Annual home sales have slowed to four million units, well below the historical norm of 5.2 million, with families now spending 34% of income on median-priced home payments
• AI-related memory chip prices have added 20-30 basis points to core inflation, but UBS considers this temporary while noting that wage inflation remains subdued compared to the dotcom era

Oil prices fell 3% to a 12-day low as Brent crude dropped to $89.40 per barrel and WTI to $82.32, despite escalating U.S.-Iran tensions. The decline came as Washington launched what it calls 'economic D-Day' sanctions against Iran, while Tehran claims it has a two-year plan to withstand the pressure. China, a major Iranian oil buyer, vowed to defend its interests against secondary sanctions.

• U.S. Treasury Secretary Scott Bessent described the sanctions initiative as 'the single greatest financial offensive ever,' targeting Iran and countries that continue trading with it
• Iranian Economy Minister Ali Madanizadeh stated Tehran is 'fully prepared' with a two-year plan to manage sanctions, saying 'we have our own tools and we know how to play the game'
• China's Foreign Ministry warned it will 'do everything necessary to firmly safeguard its rights and interests' and opposes sanctions lacking UN Security Council authorization

Ukraine is escalating its drone campaign against Russian e-commerce infrastructure, now targeting Ozon after striking Wildberries warehouses since mid-July. The attacks aim to disrupt Russian supply chains and pressure Putin's wartime economy by targeting logistics hubs that Ukraine claims provide dual-use goods to Russian forces. Putin has accused Ukraine of opening 'Pandora's box' and pledged retaliation against Kyiv's economic sectors.

• Recent drone strikes hit Ozon warehouses in Makhachkala, Enem near Krasnodar, and Samara region, with over 500 employees evacuated from the Samara facility following a fire
• Russia's top three e-commerce companies (Wildberries, Ozon, and Yandex Market) generated combined revenue of approximately $140.3 billion in the previous year, equivalent to over 5% of Russia's GDP
• Ukraine's Ministry of Defense reported hitting 15 of Wildberries' largest logistics hubs before pivoting to Ozon, claiming the facilities store dual-use goods including drone components and navigation equipment for Russian forces

Global markets entered a holding pattern on Tuesday as investors assessed multiple U.S. economic conflicts, including new Iran sanctions announced by Treasury Secretary Scott Bessent and escalating trade tensions with Canada, where 50% tariffs on $20 billion of goods took effect with threats of additional levies on automotive products. Markets showed muted reactions despite the geopolitical noise, with attention turning to Wednesday's key macro events including Nvidia earnings and U.S. PCE inflation data.

• The U.S. imposed 50% tariffs on $20 billion worth of Canadian goods, with President Trump threatening additional tariffs on Canadian-made cars, trucks, and automotive parts in response to Canadian retaliation
• Treasury Secretary Bessent's Iran sanctions plan targeting countries and entities financing Tehran drew criticism from billionaire Stanley Druckenmiller, who warned it 'spends the one asset that took two centuries to accumulate: U.S. credibility'
• China's reduced oil demand over the past six months has helped offset Gulf supply disruptions from the Iran conflict, with the country cutting imports by approximately 400 million barrels, equivalent to 16-50% of lost Gulf supply

The boom in high-risk leveraged single-stock ETFs in the US appears to be cooling as the market becomes oversaturated. Average assets in leveraged ETFs have plummeted from $272.2 million at end-2024 to $63.3 million currently, with 63 funds shutting down in 2026 compared to just three closures in 2025. The trend reflects market saturation as issuers increasingly target smaller, more speculative stocks after exhausting larger, stable companies.

• Half of the 474 leveraged ETFs now hold less than $7 million in assets, well below the $50-100 million threshold analysts say funds need to survive their first year or two
• A record 244 leveraged ETFs launched by mid-August 2026, but successive waves are 'scraping the bottom of the barrel' by targeting smaller companies and even pre-IPO firms
• Despite widespread closures, some firms like Corgi Invest remain undeterred, having launched 127 new products this year with plans for more, betting that lower fees will attract investors

Energy markets face pressure from intensified U.S. sanctions on Iran and Strait of Hormuz shipping disruptions, creating refined fuel shortages despite adequate U.S. natural gas supplies. Chinese imports of Iranian crude have fallen from 823,000 bpd to 534,000 bpd, while Iran has sanctioned 45 tankers and threatened vessel seizures. The crisis primarily affects diesel, jet fuel, and gasoline markets rather than crude oil itself.

• Refined product imports dropped 21% in May compared to pre-war levels, with global diesel supplies particularly constrained due to limited Middle East refining capacity
• U.S. natural gas production is projected to average 111.2 Bcf/d in 2026 with storage expected to reach record high of 3.985 Tcf by October, contrasting with tight global LNG markets
• WTI crude rejected resistance at $87.42 forming a double-top pattern and trades near support at $84, while Brent tests triangle support around $90.60 and natural gas holds trendline support at $2.74

Melrose shares rose 8% after the company announced plans to resume full production at its Garden Grove facility on September 28 and allocated up to $100 million to settle damage claims from a May chemical tank overheating incident. California prosecutors closed their criminal investigation without charges, providing relief to the GKN Aerospace owner.

• The facility has been operating at 50% capacity since May, reducing sales, profit and cash flow by approximately 6 million pounds per month
• Melrose will pay up to $100 million to settle local resident damage claims, an amount analysts view as 'significant but manageable'
• California district attorney closed the criminal investigation into the incident without bringing charges

Treasury yields remained steady on Tuesday as investors awaited key economic data releases, including July's personal consumption expenditure reading and second quarter GDP estimates due Wednesday. Markets are also focused on Federal Reserve Chair Kevin Warsh's keynote address at the Jackson Hole Symposium on Friday for guidance on monetary policy direction.

• The 10-year Treasury yield held flat at 4.7021%, while the 30-year yield stayed unchanged at 5.2297%, with investors seeking insights into the U.S. economic picture
• Yields had declined Monday after Treasury officials indicated the department could use its nearly $1 trillion Treasury General Account to finance ramped-up government bond repurchases
• Analysts expect Fed Chair Warsh to maintain the approach from the first two FOMC meetings, potentially disappointing markets or increasing pressure on long-end yields already under significant stress

The U.S.-Canada trade dispute escalated sharply as President Trump warned Canadian leaders to 'fall in line' or face worse consequences, while Canadian Prime Minister Mark Carney accused the U.S. of trying to subordinate Canada. Canada is set to announce retaliatory tariffs on Tuesday in response to U.S. tariffs on approximately $20 billion worth of Canadian goods including wine, furniture, and dairy products.

• The U.S. imposed tariffs on Canadian goods and threatened to raise tariffs on Canadian cars, trucks, auto parts and steel to 50% beginning January 1, 2027
• Canada plans 'dollar for dollar' retaliatory tariffs on U.S. steel, electronics and other products, expected to take effect September 8
• Relations deteriorated after trade negotiations collapsed late Friday, with both sides blaming each other and Carney stating Canada will not accept being treated as a 'subsidiary of the United States'

Leonardo Maria Del Vecchio, son of Luxottica's late founder, is stepping down from his management positions at EssilorLuxottica effective August 31. He will leave his roles as Ray-Ban brand chairman and chief strategy officer, reportedly criticizing CEO Francesco Milleri's management style as 'distant' and 'impersonal'. The move affects one of the world's largest eyewear companies, where the Del Vecchio family holding Delfin remains the leading shareholder.

• Del Vecchio will quit as chairman of Ray-Ban and chief strategy officer, effective August 31, 2024
• He criticized CEO Francesco Milleri's leadership, describing the company as being run in a 'distant' and 'impersonal' manner
• The Del Vecchio family's holding company Delfin remains the leading shareholder in the Franco-Italian eyewear group

Online fast-fashion retailer Shein's Hong Kong IPO has been fully covered by investor demand, according to sources. The offering aims to raise up to $1.8 billion and values the company at up to $27 billion. The IPO was launched on Monday with orders coming from a number of existing investors.

• The IPO book was fully covered, indicating strong investor interest in the fast-fashion retailer's Hong Kong listing
• Shein is valued at up to $27 billion in the offering, which could raise as much as $1.8 billion
• Investor orders have come from a number of existing backers, demonstrating continued confidence in the company

The Trump administration announced plans to isolate Iran from the global economy by threatening penalties against any entity that continues trading with Tehran, potentially cutting them off from the U.S. dollar system. This move targets Iran's economic lifelines that have sustained its economy through six months of war. The policy puts the U.S. on a potential collision course with Iran's major trading partners including China, UAE, Turkey, Iraq, and India.

• China is Iran's largest trading partner, buying about 90% of Iranian oil exports (roughly $31.2 billion in unreported crude in 2025), often rebranded as Malaysian or Indonesian crude to avoid sanctions.
• The UAE had bilateral trade of around $28 billion with Iran in 2024, serving as a major financial hub, though it suspended trade last week after Iran fired ballistic missiles toward Emirati territory.
• Iraq depends heavily on Iranian energy, with a five-year contract for up to 660 billion cubic feet of natural gas annually and Iranian electricity accounting for over 30% of Iraq's generation in 2023.

Six months after U.S. and Israeli attacks on Iran triggered a major oil crisis, countries affected by various conflicts now produce over 43% of global oil supply (about 45 million barrels per day). The disruptions, combined with the Russia-Ukraine war, conflicts in Libya, and U.S. restrictions on Venezuela, have caused more than 10% of global refining capacity to go offline, driving fuel prices higher and contributing to inflation and rising government debt.

• Current Gulf oil disruption stands at 5-7 million barrels per day, with Saudi Arabia re-routing oil to the Red Sea and Gulf exporters finding alternatives to the Strait of Hormuz
• Global refining capacity has been cut by about 10%, with Ukraine targeting Russian refineries as far as 2,700 km from Ukrainian territory, forcing Russia to ban gasoline and diesel exports
• The IEA has released record volumes from emergency stockpiles to cushion the supply shock, but those releases are now largely complete even as global inventories continue to decline