Out of stocks

Good morning. If you’re looking to upgrade your office lunches, this piece in The Guardian featuring 52 writers sharing the best sandwich of their life is not a bad place to start. 

For us, nothing is better than a hot turkey sandwich (chicken is also acceptable, but homemade gravy is non-negotiable). This is obviously not a practical choice for a work environment, but it is a delicious one.

Today’s reading time is 4½ minutes.

Markets this week: We still have a little bit of earnings season left to go (Constellation Software, Cisco, and Canadian Tire are some of the bigger names reporting this week), but with the Magnificent 7 out of the way, markets will likely be more attuned to what’s going on in the Middle East and the progress (or lack thereof) on a peace deal.

Ask Claude how well it can pick stocks, and it will tell you (or at least it told us), “Honestly, not very.” That turns out to be true. 

What happened: A slew of experiments to test the stock-picking ability of AI models found that even the best ones still usually lose money. 

Why it’s happening: It’s not that surprising that off-the-shelf AI tools struggle with picking stocks. The professionals who do it successfully (and many don’t) depend on access to real-time, and sometimes proprietary, data that gives them an edge. 

Why it matters: 14% of Canadian investors have used AI to get investment advice, according to a Scotia Wealth Management survey, though only 7% say (or are willing to admit) they have made investment decisions solely on the basis of AI recommendations.

Yes, but: None of this is to say that AI can’t be helpful in some aspects of the investing process, like company research — at least that’s what the world’s biggest investment banks seem to think.

No deal between the U.S. and Iran. Donald Trump rejected Iran’s counter to the U.S. proposal for a framework to negotiate a peace deal. Follow all that? The bottom line is that the two sides still seem to be negotiating, and the ceasefire is (mostly) holding, despite the United Arab Emirates saying it was attacked yesterday by Iranian drones and Iran exchanging intermittent fire with the U.S. (BBC News)

Canadians disembarked from the hantavirus-stricken cruise ship. Four Canadians who were aboard the MV Hondius, the cruise ship that experienced a hantavirus outbreak, are self-isolating in B.C. The passengers were asymptomatic and B.C. health officials said they will have no contact with the public for at least 21 days. (CBC News)

Ottawa is planning more changes to speed up infrastructure project review. The planned reforms will aim to get projects through the regulatory review process within a year by streamlining the approvals process and remove the need for certain assessments, among other changes. The new process would apply to all large projects requiring federal review, not just those falling under the purview of the Major Projects Office. (CBC News)

Every day, people count on public services to access benefits, keep food safe, protect communities, and respond when disaster strikes.

But Prime Minister Carney’s government is cutting those services, leaving workers and their families who are already stretched thin, without support. The consequences are real: longer waits, growing backlogs, and greater uncertainty when support is needed most.

Great nations aren’t built through austerity – they’re built by investing in the public services people rely on and the workers who deliver them.

If this government is serious about a strong Canada, it should invest in strong, reliable public services.

For you, for your loved ones, for your community — For You, Canada.

🇨🇳 Donald Trump and Xi Jinping will meet in Beijing. If all goes to plan (this trip has already been delayed once), Trump will arrive in China this week for a two-day summit, marking the first visit to China by a U.S. president since 2017. For all the hype around this trip, however, few expect much of substance to come from it, as the Iran war consumes much of the White House’s attention and this year’s midterm elections mean that China has little reason to make any concessions.

📈 U.S. inflation report. This week brings the last U.S. Consumer Price Index reading of Jerome Powell’s tenure as Fed chair, and it’s a big one. This will be the first real chance to see whether higher energy prices are bleeding over into other parts of the economy and creating the sort of inflationary pressure that the central bank may feel merits a response in the form of rate hikes. And speaking of rate hikes…

🏦 Kevin Warsh takes over the Fed. Warsh is expected to be voted to succeed Powell as Fed chairman on Friday, and he stands to inherit a tricky situation. Last month’s Fed decision was not unanimous, with four members of the committee that makes these calls voting against Powell’s recommendation. The last time there was that much dissent on a Fed vote was 1992. There are also questions still lingering about just how independent Warsh will be from the man who appointed him, Donald Trump. All of this equals more uncertainty, which is not what markets are looking for in the world’s most important central bank.

Kevin O’Leary garnered some mild praise for his performance in Marty Supreme, but people are less positive about his data centre plans.

Driving the news: O’Leary’s “Stratos” data centre project in Utah is drawing serious blowback from residents who are concerned that the facility — which, if built, will be two-and-a-half times the size of Manhattan — could have some negative effects on the local environment.

Catch up: Stratos will consume nine gigawatts of power when fully operational (more than double Utah’s entire electricity consumption today) supplied by dedicated natural gas plants.

Why it matters: The backlash to O’Leary’s project is the latest flare-up of an issue that’s swiftly become a political lightning rod around the world — and one that threatens to become a major problem for the AI boom.

Zoom out: Canadians are split when asked whether they support building data centres in general, but oppose them by a margin of more than two-to-one when asked if they’d support one in their community.

Our take: Some forecasts project demand for data centres to double by 2030. If that’s the case, the opposition to these projects is only going to grow, and this is almost certain to turn into a very hot political issue.

While Canada’s target of 100% zero-emission new vehicle sales by 2035 was scrapped this year, the federal government has still committed billions of dollars to building a domestic EV supply chain. But the existence of a domestic EV market assumes something that currently isn't true for a large share of the population: that Canadians can charge where they live. Roughly 30% of Canadians live in condos, apartments, and other multi-unit residential buildings, and the vast majority of those buildings have zero EV charging infrastructure.

Go deeper into how the fractious internal politics of condo boards have become a stumbling block for Canada’s EV ambitions.

🍻 63%. Decline in U.S. alcohol exports to Canada last year, according to a U.S. industry group. The steep drop was driven by provincial bans on the sale of alcohol from the U.S. introduced by all provinces except Alberta and Saskatchewan.

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