Morning. In focus this week, we’re watching frozen food prices, dialling into Rogers earnings and checking in across the pond.
Up first
In the news
Energy: LNG Canada co-owners Shell PLC and Mitsubishi Corp. are poised to take advantage of soaring demand for infrastructure assets from the insurance arms of massive private-equity funds.
Immigration: Thousands of home-care workers are stuck in limbo as permanent residency stream faces delays.
China: Facing pressure at home, Trump turns to an old scapegoat.
Smoke rises from the Signal Hill wildfire in Pemberton, B.C., on Saturday. Nearly 1,000 fires were active across the country yesterday.Brenna Owen/The Canadian Press
In focus
What’s on our radar
1. Burning up: Wildfires continued to rage across Canada, after a violent lightning storm ignited more blazes in British Columbia. But a thick haze of smoke that loomed over many eastern North American cities eased off, in part owing to thunderstorms.
Criticism mounted over the weekend for Ontario’s handling of wildfires, even drawing a threat of tariffs against Canada by U.S. President Donald Trump, Sean Silcoff reports.
Canada has “invaded” American cities in recent days, Trump wrote on social media, calling the smoke “Willful Negligence” on the part of Canadian authorities.
2. Oil under pressure: Renewed hostilities sparked concerns about global oil supplies, pushing crude prices back to levels seen before the U.S. and Iran signed a ceasefire agreement in mid-June.
Both countries intensified attacks for an eighth consecutive day yesterday, resulting in casualties and reigniting fears of outright war. The renewed conflict led to an unravelling of a fragile ceasefire between the two countries that was set to lead to a final peace agreement, Sophia Bertuzzi reports.
Brent, the international crude oil benchmark, surged more than 10 per cent over the past week, reversing the recovery of oil flowing from the Gulf region. Traders are weighing the risks that global crude and product stocks – which stabilized energy markets when the conflict began – are reaching new lows.
Iran has again closed the Strait of Hormuz – the world’s most important oil transit chokepoint.
I worked really hard on this.Composite/iStockPhoto / Getty Images
3. Price check: The going rate of tomatoes might be the most extreme food spike reported in last month’s consumer price index, but that doesn’t make other rising grocery costs much easier to swallow.
The vegetable (yeah, that’s right: vegetable. I’ll see you in court) rose 45.2 per cent year-over-year – far outpacing grocery prices, which rose by 4.3 per cent during the same time period. Still, that’s the 16th consecutive month that groceries have exceeded the headline rate of inflation.
In this morning’s June consumer price index, reported by Statistics Canada, economists are expecting the broader measure of consumer goods to have slowed to 2.8 per cent from 3.2 per cent in May.
But most of that easing likely came from lower energy prices – also little comfort for anyone following the war in Iran.
Food prices, however, are expected to stay frozen.
After the Bank of Canada announced last week it would be holding its benchmark lending rate steady at 2.25 per cent, Governor Tiff Macklem told Mark Rendell he’s “cautiously optimistic” about the country’s economic outlook.
» Thursday: Analysts are estimating retail sales for May rose by 1.1 per cent, driven by car purchases and sales at the pump. Stronger job growth might also have spurred spending.
4. Radio silence: Rogers earnings on Wednesday mark almost two weeks since the telco announced it would be shutting down its Sportsnet 650 radio station in Vancouver and Sportsnet 960 station in Calgary, as well as four other stations in cities including Kitchener and Halifax.
The company cited declining audience numbers and lower advertisement revenue for the decision.
“The media business continues to face headwinds driven by declining advertising revenue and changing audience habits. These changes are part of our plan to focus our investment in areas that will drive growth long-term,” a Rogers spokesperson told The Canadian Press.
The company announced a day earlier it would acquire the remaining 25 per cent stake in Maple Leaf Sports & Entertainment that it didn’t yet own for $4.35-billion.
As Rogers shops a stake in its teams to institutions such as pension plans, the company can afford to take its time, Andrew Willis writes. Credit ratings agencies are giving the company up to a year to sell minority stakes and pay down debt.
5. On Wall Street: Many investors appear to be wary that renewed tensions could lift energy prices back to levels reached following the start of the war – stoking inflation fears ahead of the U.S. Federal Reserve decision at the end of July.
Entering a week of major reports from companies such as Alphabet, Intel and Tesla, concerns are growing again about the sustainability of the AI-driven surge. AI and semi-conductor stocks sold off sharply on Friday on reports that a new model from a Chinese startup had achieved similar results to cutting-edge U.S. models.
Still, with more than 40 companies having already reported, overall S&P 500 earnings are expected to rise by 25.7 per cent from a year ago.
6. Eurovision: Bonus item! In Britain, Andy Burnham, who was acclaimed as leader of the Labour Party, heads to Buckingham Palace today to be sworn in as Prime Minister by King Charles III.
Investors there were feeling more confident that Burnham (who, as the top politician in the world’s oldest continuous constitutional monarchy, must surely go by Andrew now?) will keep markets calm by sticking to the government’s strict rules on borrowing and spending. But it wasn’t immediately clear what his plans were, exactly. Britain’s economic growth has been flat, and there’s little fiscal room for big spending initiatives, Paul Waldie writes from London.
» The European Central Bank is likely to stand pat on Thursday, after it became the first of the biggest central banks to hike rates since the Iran war began last month.
With files from Reuters, AP and CP
Charted
The pathway
An agreement signed by Alberta, Ottawa and Canada’s five largest oil sands companies to advance the Pathways carbon capture project includes a 400-kilometre pipeline that would transport carbon trapped at oil-sands facilities to an underground hub near Cold Lake, Alta.
Quoted
It was a goal scored by 47 million people.
— Ferran Torres, backup striker and World Cup hero
Spain scores on Argentina in extra time to win its second World Cup.
Morning update
Global markets were mixed as investors awaited a key slate of earnings that could test Wall Street’s AI-driven rally, while caution prevailed due to escalating tensions in the Middle East.
Wall Street futures were in positive territory, while TSX futures followed sentiment higher.
Overseas, the pan-European STOXX 600 was up 0.05 per cent in morning trading. Britain’s FTSE 100 fell 0.46 per cent, Germany’s DAX gained 0.32 per cent and France’s CAC 40 advanced 0.26 per cent.
In Asia, Japan’s Nikkei was closed for a holiday, while Hong Kong’s Hang Seng rose 2.36 per cent.
The Canadian dollar traded at 71.30 U.S. cents.