Panic in Jalisco

Good morning. In the ever-growing world of wearables, we have rings that analyze our sleep, watches that track our heart rates, and soon, monitors that will measure our farts. 

University of Maryland researchers have built a “Fitbit for farts” as part of a study into human flatulence, which subjects will soon test. It might sound funny, but commercialization plans are in the works, and the device could one day give users unique insight into their gut health.

Silent, but deadly? Try silent, but valuable.

Today’s reading time is 5½ minutes.

Markets: Canada’s main stock index and top Wall Street indexes fell yesterday as growing concerns about AI disruption and reignited tariff rhetoric from Donald Trump rattled investors. Meanwhile, Canadian bank earnings season begins today with Scotiabank reporting its quarterly results.

Violent ripple effects were felt across Mexico yesterday following Sunday’s killing of Nemesio “El Mencho” Oseguera Cervantes by Mexican law enforcement.

Driving the news: El Mencho was the leader of the powerful Jalisco New Generation Cartel and died during a capture operation. His death sparked retaliation from the cartel, which set up roadblocks in at least 20 states and launched attacks that, as of writing, resulted in the deaths of at least 25 National Guard members. Thankfully, no civilian deaths were reported. 

Why it matters: The situation has calmed down measurably, but a Canadian travel advisory is still in place, with Global Affairs Canada registering 26,305 Canadians in the country as of yesterday morning. Canadian airlines that cancelled flights to the most affected region should resume service soon.

Big picture: Cartel drug trafficking has been a large hurdle in the U.S.-Mexico tariff talks, with Donald Trump even threatening to send troops into Mexico to “take out” the cartels, à la January’s raid in Venezuela. With the U.S. reacting positively to the El Mencho operation, Mexico could be motivated to pursue more anti-cartel actions to get in Trump’s good books.

Bottom line: It remains unclear what the long-term impact of El Mencho’s death might be. It could create a power vacuum that Mexican and U.S. authorities are able to take advantage of. On the other hand, it could also lead to a spike in indiscriminate narco-terrorism and a violent succession struggle.—QH

Feds will meet with OpenAI executives over Tumbler Ridge shooting concerns. The company’s top safety execs have been summoned to Ottawa to meet with AI Minister Evan Solomon today, following reports that OpenAI had flagged violent interactions between the alleged Tumbler Ridge shooter and ChatGPT. The AI startup banned Jesse Van Rootselaar’s account, but said the messages — which described several scenarios of gun violence — didn’t meet their bar for reporting to law enforcement. (Bloomberg News)

Uber launches an autonomous vehicle service venture. The rideshare platform rolled out a suite of new services for robotaxi companies, including roadside assistance, insurance, and a financing product to help companies pay for their fleets. Uber is vying to be the home of all things robotaxi. It’s struck deals with over a dozen autonomous vehicle firms so far and is planning to have robotaxis on its network in 15 cities by the end of the year. (Financial Times)

The sharks are circling PayPal. The online payment company, which has seen its stock tumble over 45% in the past year, is reportedly attracting takeover interest from multiple suitors. PayPal’s business has been hurt as more digital payment options emerge, but it still processes nearly US$2 trillion in transactions a year. (Bloomberg News)

📡 What else is on our radar:

What they’re saying: “This is a business deal, not a political deal,” Netflix co-CEO Ted Sarandos told BBC Today while discussing the in-flux Warner Bros. Discovery deal. The comment came after he was asked about Donald Trump’s recent demand that Netflix remove Susan Rice, a Democratic foreign policy adviser and former diplomat, from its board. 

Why it matters: Sarandos has leaned hard into the business case for Netflix’s acquisition, even pleading his case to Trump personally, but this comment sounds a tad naive. In the U.S., the Department of Justice, a body that Trump has exerted increasing influence on, will seal the deal’s fate. Sarandos looks ready to play hardball, and maybe Rice stays on the board, but Netflix will face pressure to appease Trump in some capacity to improve the odds of the deal getting approved.

After posting its first-ever $1 billion quarter, Aritzia is looking to tap into a ritzier market down south. 

Driving the news: The Vancouver retailer is buying luxury fashion brand Fred Segal, a deal that includes the brand’s intellectual property, trademarks, and the lease for its now-shuttered flagship store on Melrose Avenue in Los Angeles.

Why it matters: Even in the age of online retail, there is still demand for the type of experiential retail that makes an event out of in-person shopping. In that spirit, Aritzia has started to retrofit its stores with everything from swankier dressing rooms to cafes and lounge areas. 

Our take: While legacy brands like Gucci and Louis Vuitton struggle to lure customers, Aritzia’s strategy of mixing more accessible prices with the glitz of high street shopping could prove to be the happy medium that opens more wallets.—LA

📉 US$66 billion. Value that Canada’s tech hubs collectively lost between 2019 and 2024 thanks to a lack of startup investment, according to new research. The figure was calculated by comparing Canada’s growth to similar markets globally. Seed rounds in Canada’s top tech cities were also about 40% smaller than in comparable U.S. markets.

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