Here are five things you need to know this morning:
Tariffs on Chinese EVs, steel and aluminum are coming: The federal government is set to announce new tariffs on Chinese-made electric vehicles, as well as on steel and aluminum from that country, in a move aimed at bolstering domestic manufacturers and standing alongside Western allies making similar moves. Prime Minister Justin Trudeau will unveil the news today at a press conference in Halifax, where his cabinet is on an annual policy retreat. The levy will be as high as 100 per cent on EVs and 25 per cent on steel and aluminum, Bloomberg is reporting, citing anonymous sources. Those figures are in line with what the Biden administration rolled out earlier this year, but harsher than the levies that the European Union is going with.
Rail strike is over: The labour disruption at Canada’s two major railway companies is seemingly over after an independent tribunal ordered striking workers back to work as of midnight while imposing binding arbitration to hammer out a deal. The Teamsters union, which represents almost 10,000 workers at CN Railway and Canadian Pacific Kansas City, says it will abide by the Canada Industrial Relations Board ruling even as it appeals the decision and workers are set to return to their shifts this morning.
Bank earnings continue: Canada’s big banks are set to reveal financial results in the coming days, and the numbers should give investors some solid clues about which way the overall economy is headed. TD Bank kicked things off, but the focus at TD was on the additional $2.6 billion the lender set aside to cover fines tied to its probe related to a money laundering probe in the U.S. That swung the bank to a rare quarterly loss and overshadowed everything else. The other big banks are poised to reveal their results in the coming days and in the absence of any big one-time items, the trends should paint a good picture of whatever strength or weakness there is in the underlying broader economy.
Major 7-Eleven investor urges talks with Couche-Tard: A major investor in Seven & i Holdings Co., the owner of convenience store chain 7-Eleven, says it is critical for the Japanese company to engage in talks with TSX-listed Alimentation Couche-Tard about the latter’s takeover proposal. Couche-Tard went public with an offer to buy the Japanese chain earlier this month, a move that would make the company an even bigger player in the global convenience store industry. It would also be the biggest ever takeover of a Japanese-owned firm, after the Japanese government loosened rules on such deals earlier this year. Ben Herrick, associate portfolio manager of Artisan Partner International Value says the 7-Eleven owner is “an undervalued, mismanaged” asset and urged the company to take the $36 billion takeover offer seriously. Artisan has owned 7-Eleven shares since 2019.
Rate cut doubts are gone after Jackson Hole speech: “The time has come for policy to adjust,” Jay Powell said on Friday. In central-bank speak, it doesn’t get much more unequivocal than that, which is why whatever shreds of rate-cut doubt that existed before the Fed chair’s speech at Jackson Hole on Friday are now officially gone. A 25 point rate cut at the bank’s next policy meeting next month is fully priced in, and a larger cut of 50 points is on the table. While it would be extremely unlikely for the Fed to take such a big first step in a rate cutting cycle, the cuts are coming and the question is moving to how many and when. Markets are pricing in 100 points of cuts by the end of 2024, and more than 200 by next summer. Add it all up and the message is clear: The Fed is ready to join the rate cut party that Canada, the U.K., the ECB and a handful of other central banks around the world are already attending.