At the NATO summit this week Carney made the formal commitment to ramp up defense spend to 5% of GDP by 2035, a target we framed as ambitious in January.

The news is the latest in a long line of defense wins including Carney’s recent 2% target for 2025 and a proposed 13% defense increase in the U.S. budget, but the enthusiasm in markets was less widespread this time around.

While there’s still a fundamental case to be made for owning the sector I’m betting the “narrative shift” part of this trade has played out, with both the short and long-term stage now set and reflected in Canadian defense valuations.

With multiples on most of the basket now sitting well above the three year average, companies will have to earn their premium on a go-forward basis and a selective approach to sector exposure could outperform from here.

It’s been a slow news week as everyone gears up for Canada Day, so I took a deeper dive into the elevated buyback activity from last Morning Meeting. Spark notes: it’s financials this time, not resources.

Within the group the banks are doing the heavy lifting, as TD looks to redirect capital from it’s handicapped U.S. business while BMO and CIBC ramp up activity.

The life insurance companies haven’t been slouches either, deploying a sizeable chunk of their excess capital over the past year.

For a breakdown of what’s driven the increased buybacks and if it’s a good idea, check out the full piece: https://www.bullpen.finance/content/177

In what reads like the sequel to the movie Money Monster, Robert Granieri - co-founder of the quant firm Jane Street - has come out saying he was “duped” into funding AK-47s for a coup in South Sudan to the tune of $7M…

Ignoring the obvious red flags, let’s assume the founder of one of the biggest market making firms in the world was tricked… can you imagine how good that pitch must have been?

Flagging the PHX Energy Services (PHX) transaction, which has been a recurring one throughout the last two months. John (the CEO) has trimmed his position from more than ~4.5M to ~3.2M shares over that time period, while the stock has traded flat.

Highlighting the section 899 news - reminder that had this gone through, a tax of up to 50% could have been imposed on dividends from U.S. companies held by Canadian investors. When it was first released, we estimated it could have impacted ~$25B of pension capital.

Flagging Blackberry (BB) here, which gave some of its ~15% post-earnings jump back yesterday. It’s been a retail favourite over the past year, more than doubling over that time frame and sitting well above the $3.88 strike price on $200M of convertible notes that are eligible to be rolled into stock in late 2028.

That’s roughly 7% of the market cap waiting to hit the tape. Without a material change in the underlying business, I’d be hesitant to chase this if it gets too far ahead of that strike price.

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