Annoyance economy

Earnings to watch: It’s earnings week for U.S. banks. Goldman Sachs will kick it off this morning, JP Morgan Chase, Wells Fargo, and Citigroup will follow suit tomorrow, and Morgan Stanley, PNC, and Bank of America will wrap things up with their results on Thursday. Outside of the bank earnings, Netflix will report on Thursday. 

That ceasefire between the U.S. and Iran that every news story described as “fragile” may be about to break. 

What happened: Donald Trump announced that the U.S. would blockade the Strait of Hormuz and Iranian ports after peace talks with Iran broke down over the weekend. 

Catch up: Vice-President J.D. Vance left Pakistan empty-handed yesterday after 21 hours of talks between the U.S. and Iran failed to produce a deal. Vance told reporters Iranian negotiators “have chosen not to accept our terms,” leaving the fate of the two-week ceasefire declared last week up in the air.

Why it matters: There’s no clear path to bringing shipping levels in the strait back to normal until a more durable peace is found, particularly now that both the U.S. and Iran are restricting passage through the waterway.

What’s next: Expect oil prices to continue climbing and stocks to suffer as hopes for a quick settlement fade — and fears of the war restarting pick up.—TS

Péter Magyar toppled Viktor Orbán in a landslide. After 16 years in office, strongman Viktor Orbán has been ousted as Hungary’s prime minister, conceding defeat to the centre-right Tisza Party and its leader, Péter Magyar. It’s a shocking result considering the uphill battle opposition parties in Hungary have faced and the steps Orban took to cement his power over the years, something we documented in our World Dispatch this weekend for Peak Premium subscribers. (Reuters)

Christine Fréchette chosen as leader of Quebec’s ruling party. The 56-year-old Fréchette won the CAQ party leadership vote yesterday and will now succeed François Legault as Quebec’s premier. Fréchette, who is currently Quebec’s minister of economy, innovation, and energy, will serve as premier until the next general election on October 5. (CBC News)

At least eight more MPs are in talks to join the Liberal caucus. According to the Globe and Mail, as many as eight NDP and Conservative MPs are being courted to cross the floor and join what is likely to soon be a majority Liberal government. Since Mark Carney took office last year, five opposition MPs have crossed the floor, including longtime Conservative Marilyn Gladu last week. (Globe and Mail)

📡 What else is on our radar: 

🇨🇦 By-elections likely to hand Carney a majority. Three by-elections today will almost certainly return enough Liberal MPs to give the government a working majority in Parliament. That will give Mark Carney the option to govern until 2029 without another election. That breathing room could also embolden the government to pursue its agenda more aggressively, as it will no longer require support from opposition MPs to pass legislation.

🇱🇧 Lebanon, Israel to start ceasefire talks. Officials from Israel and Lebanon will meet tomorrow in Washington to discuss a potential ceasefire. Direct talks between the two countries are rare, but Iran has made a ceasefire in Lebanon one of its demands in peace talks with the U.S. Israel has said it would not discuss a ceasefire with Hezbollah, however, which could mean an end to its military campaign in Lebanon is unlikely.

🏀 NBA playoffs begin. The Play-In Tournament to finalize playoff seeding tips off tomorrow, setting the stage for the playoffs beginning on Saturday. The reigning champion Oklahoma City Thunder, led by Canadian star Shai Gilgeous-Alexander, are favourites to win again. The Toronto Raptors will take on the Cleveland Cavaliers in the first round, a team they have beaten every time they’ve met this season.

It turns out that making customer service interactions as insufferable as possible is a nine-figure business. 

Driving the news: A recent study by a Stanford University economist found that the so-called ‘annoyance economy’ — think long hold times, spam messages, and hidden fees — costs consumers in the U.S. $165 billion a year. 

Why it’s happening: Turning basic customer service interactions into a test of mental willpower is quite profitable, especially when it comes to cancellations. A separate study found that companies' revenue can jump by up to 200% by simply making it harder to cancel subscriptions to their product. 

Why it matters: These types of interactions have always been tedious, but AI has now given companies a convenient excuse to cut customer service jobs while making issues even more difficult to resolve — all under the guise of providing more efficient service.

Our take: Annoyance isn’t just a byproduct of cost-cutting, it’s a calculated strategy for many companies that are betting people would rather give up a few bucks than jump through a frustrating series of hoops. Unfortunately, that bet seems to be paying off.—LA

🇪🇺 57%. Share of Canadians who support the idea of Canada becoming a full member of the European Union, according to a new Globe and Mail and Nanos research poll. Less than a third of respondents said they were opposed to the idea of joining the EU, though as we reported last month, that would be easier said than done.

Treat yourself to a few games: We’ve got today’s mini-crossword, the daily sudoku, Codebreaker, and Who’s Who.