On Friday Carney announced that tariffs on USMCA-compliant imports would be lifted, while retaining retaliatory measures on steel, aluminum, and autos. The rollback should provide a small boost to near-term trade activity…

… while the government looks for relief in key export categories targeted by the Trump administration (lumber, autos, steel, etc.).

A lot has been said about the position of our elbows, shifting the conversation away from the use of our brains. “Elbows up” was always a campaign slogan, not an economic reality - time to make some concessions and move forward.

June’s retail sales shaped up largely as expected, gaining 1.5% M/M on an identical gain in volumes.

But the mix behind the print was different, with strength in food and clothing retailers carrying weaker growth in vehicle sales. With that, core retail sales jumped 1.9% - outpacing estimates of 1.1%.

At a regional level, strength in key provinces more than offset weakness in smaller economic regions…

… but that looks set to reverse course in July, with preliminary estimates suggesting a 0.8% slowdown versus this print.

Cenovus (CVE) is stepping up to the plate with a $7.9B bid for MEG Energy (MEG), funded by $5.2B of cash and the remainder in stock. Many consider CVE the most logical home for MEG’s assets given proximity…

… and technology overlap, with the combined company being the clear leader in SAGD production. All in, management expects to achieve $400M of run-rate synergies…

… which would make this deal accretive despite Cenovus offering a premium to its current multiple for MEG’s assets. Should it get over the finish line, pro-forma debt would sit well above target…

… causing management to more aggressively target leverage reduction with free cash flow and potential asset sales.

But it’s not a sure thing yet, with MEG trading above the $27.25/sh offer and closer to Strathcona’s stock-heavy bid that at current prices, represents over $28/sh.

Markets ate up Powell’s Jackson Hole speech, where the Fed chair shifted policy focus from inflation to employment, opening the door for a rate cut in September.

I don’t know what’s the bigger challenge for Powell: threading the needle between two key economic indicators at odds with each other, or cutting rates without people thinking it was because Trump bullied him into submission.

Flagging the Aecon (ARE) buy, as it’s by far John’s (founder) largest on record at $1.4M. Like Bird Construction, ARE trades in-line with its long-term average…

… but its backlog is sitting at record levels.

Combined with a multi-year nuclear tailwind and the near-term roll-off of some ugly legacy contracts, the chairman likes what he sees.

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