Puck portfolios

Good morning. The World’s Ugliest Dog contest was held over the weekend in Santa Rosa, California, and the contestants sure brought their A-game. Beating out a field of tough competition, a pug named Jinny Lu (whose tongue appears to permanently hang out of her mouth) took home the $5,000 grand prize. 

That’s like $35,000 in dog money. Do you know how many treats Jinny Lu can buy with that kind of cash? 

Today’s reading time is 5½ minutes.

Earnings to watch: In an otherwise quiet week on the earnings calendar, Home Depot and Walmart — two bellwethers of consumers sentiment — will report results on Tuesday and Thursday, respectively.

It’s one thing to watch your RRSP shrink because the stock market slumps. It would be quite another to have to push back retirement because the Leafs suck again this year. 

What happened: A firm called Volatility Shares (can’t say they didn’t warn you, with a name like that) has filed plans with the SEC to offer ETFs that track the performance of each NHL team. 

Why it matters: These ETFs bear a striking resemblance to sports betting, except that they come packaged as an investment product, meaning that they would (if approved) be tradable inside registered accounts, like RRSPs and TFSAs, and sidestep gambling regulations. 

Our take: The vast majority of sports bettors and prediction market users lose money, but there’s clear demand among retail traders for riskier products that more closely resemble a roulette table than a traditional investment. Whether it’s zero-day options, leveraged crypto ETFs, or indexes tied to how many goals the Habs score, expect the finance industry to keep supplying more creative ways for people to gamble.—TS

China’s Alibaba is now the most downloaded AI model in the world. Qwen, Alibaba’s family of AI models, has hit 3 billion downloads globally, surpassing the likes of open-source rivals Meta and Google. Open models like Qwen and Moonshot are free and can be downloaded and customized to build new AI products. That value proposition has caused many businesses, including tech giants like Apple and Airbnb, to use Chinese models over those from frontier labs like Anthropic and OpenAI. (Bloomberg News)

Ottawa and Ontario announce $1 billion to fund infrastructure for homes. The Ontario government and the feds will each provide $500 million to help cover the cost of infrastructure needed to build more housing units. The funding will only be available to municipalities that don’t already have development charges for infrastructure like roads, bridges, and water systems. (The Canadian Press)

Quebec and Newfoundland are set to sign a major power deal. The two hydro-rich provinces will reportedly announce a new electricity supply agreement this afternoon that will provide Newfoundland with 58% more power than what was agreed to in a tentative 2024 deal. The provinces have been fighting for years over a deal that has long given Quebec access to Newfoundland’s power at extremely low rates. (CBC News)

📡 What else is on our radar: 

🇺🇸 Deadline day for U.S. tariffs. Donald Trump has promised to implement new tariffs of 50% on around $20 billion worth of Canadian exports to the U.S., including goods that had previously been exempt from duties under CUSMA, starting Wednesday at midnight. Negotiations look set to continue until then, and rumours about those talks are flying fast and furious. Ottawa is reportedly pursuing a “comprehensive” agreement and is willing to make concessions on provincial alcohol bans and dairy quotas, according to media reports. The U.S. has reportedly demanded the right of first refusal to buy Canadian critical minerals, Canadian participation in the “Golden Dome” missile defence project, and guarantees of future oil and gas exports.

🇮🇷 New sanctions could be coming against Iran. U.S. Treasury Secretary Scott Bessent promised to impose “measures like have never been seen in the history of the economic isolation of a country” against Iran this week. But what could that actually mean, given that the U.S. has spent months bombing that country? Some possibilities are secondary sanctions against countries and companies doing business with Iran, measures targeting Chinese companies doing business with Iran, and a crackdown on ports and other infrastructure Iran uses to ship its exports.

📊 July’s inflation print. Statistics Canada drops the Consumer Price Index for July this morning, the last report before the Bank of Canada’s September interest rate call. Forecasters expect headline annual inflation to come in just under 3% with higher gas and food prices driving much of the price growth. That’s unlikely to prompt the central bank to start hiking rates, though markets are pricing in a reasonable (around 40%) chance of higher rates before the end of the year.

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Canada is making the world’s “most desperately needed airplane”. The only problem? There aren’t enough of them to go around. 

Driving the news: Calgary-based De Havilland, the manufacturer of the Canadair water bomber aircraft, is looking to build a second production line to keep up with soaring demand for the firefighting planes.  

Why it matters: Canada and the rest of the world need these aircraft far faster than they can currently be built. At full capacity, De Havilland can only manufacture 10 water bombers per year, but that number would double with another production line. 

Zoom out: The water bomber is a uniquely Canadian innovation that, so far, hasn’t been replicated elsewhere. If countries can’t get their hands on enough of them, there’s a good chance that a foreign competitor will emerge to fill the gap.—LA

📉 13%. Share of large-cap active investment funds in the U.S. that outperformed passive indexes, like the S&P 500, over the past decade. Those stock-picking funds did slightly better over the last year, with 27% outperforming the passive indexes, but have disappointed overall given the higher fees that they charge.

Treat yourself to today’s mini-crossword, the daily sudoku, Codebreaker, and Who’s Who.