Market News

• Trump on Canada: Someone should get these clowns to “fall in line"
• Bessent says no one is outside the reach of US sanctions on Iran, including China
• Trump says 50% tariffs on Canadian autos coming on January 1, 2027
• Canada July advance manufacturing sales -0.2%
• US set to impose a 7.5% tariff on Chinese goods - report

Markets:

• Gold up $51 to $4653
• US 10-year yields down 3.2 bps to 4.71%
• WTI crude oil down $2.02 to $85.04
• USD leads, CAD lags
• S&P 500 down 0.3%

The US dollar started the day soft but steadily climbed back. The turn came as Bessent spoke and delivered more threats on Iran than actual sanctions and a plan that was lightly throught through. In addition, his comments on the bond market sounded less like someone who wanted a real…

U.S. stocks closed mixed, with the Dow managing a gain while technology shares—particularly semiconductor and AI-related stocks—came under heavy selling pressure.

The closing levels:

• Dow industrial average rose 140.03 points, or 0.26%, to 53,422.35
• S&P 500 fell 21.40 points, or 0.28%, to 7,652.96
• Nasdaq composite dropped 200.26 points, or 0.76%, to 25,980.19
• Russell 2000 declined 22.79 points, or 0.76%, to 2,995.08
• Nasdaq 100 fell 285.68 points, or 0.97%, to 29,023.18

The biggest sector story was the sharp decline in semiconductor, memory and AI-infrastructure stocks. The weakness extended across chipmakers, networking companies, optical suppliers and data-center-related names.

Some of the notable losers included:

• SanDisk:…

Morgan Stanley's upgraded forecasts point to a market that is tightening faster than expected, with falling oil-on-water and onshore inventories, including in China, reinforcing the bank's deficit call through into early 2027. The unusually wide gap between crude and refined product prices, with gasoil trading far above Brent, points to strained refining capacity alongside the crude-side tightness. On the equity side, Wilson's framing of oil as the single biggest risk to US stocks adds a cross-asset dimension, tying any renewed crude spike to higher bond yields and potential pressure on the Fed to respond. His preference for energy shares as a portfolio hedge, alongside quality names more broadly, signals how positioning may shift if the…

Crude sold off sharply despite the ratcheting up of US pressure on Iran, underlining how much of the recent risk premium had already been priced in after two straight weekly gains of over 5%. Traders treated Bessent's sanctions rollout as broadly telegraphed, with little fresh detail to justify holding onto recent length. Attention now shifts to whether Washington's threat of secondary sanctions can meaningfully curb flows to Iran's remaining buyers, chiefly China, since analysts flagged that outcome as the real swing factor for prices. Morgan Stanley's more bullish Brent call for the fourth quarter suggests the market is still pricing meaningful upside risk even after Monday's pullback, keeping the door open for renewed strength if…

There is something disquieting about a government fighting markets. There is a certain futility about it in large part because it rarely works. When it does work, it's usually of the Mario Draghi "whatever it takes" variety and some dramatic actions. Treasury Secretary Bessent talking about $4 billion in shifting maturity buying is almost comically under-armed.

Now they're floating using the Treasury general account but it's starting to look like they don't have a real plan. It goes back to Trump's impulsiveness and you get the sense that he tasks deputies with impossible goals.

Reuters is just out with a poll showing Trump's approval at 33% to match the lowest of his Presidency and the Iran war is increasingly unpopular as well. Just 31%…

The USDJPY is pressing against an important technical ceiling after rebounding from last week’s lows.

On Wednesday and Thursday last week, the pair briefly traded below its 200-day moving average (lower green line on the chart above at 158.33 currently), but sellers could not keep the momentum. Support emerged against the swing level near 157.96, and the failure to break lower gave buyers the opportunity to push the price back toward the shorter-term moving averages.

On Friday, the rebound initially stalled against the 100-hour moving average, but the price has now moved above that level at 158.91 and is testing the 200-hour moving average at 159.12. The current price is trading near 159.17.

That puts buyers in position to make another run…

US Vice President JD Vance said today that trade negotiations with Canada remain ongoing in something of a turnabout that's a hint that not everything is lost. Notably, Canada's counter-tariffs won't go into effect until Sept 7 and Trump is threatening Jan 1 tariffs on auto parts. The longer Canadian timeline and even-longer Trump timeline, suggest that both don't want to push things too far now.

I'm reminded of this great graphic from BCA, which is also a Canadian firm, it sketched out Trump's negotiating tactics based on plenty of precedents. 

You can even read today's message about Doug Ford as one where Trump doesn't actually want to escalate and wants a deal. But he doesn't want to be embarassed and used as a punching bag by Ford. The…

WTI crude oil futures are settling at $85.01, down $2.05 or 2.35% on the day. The low reached $84.36, while the high extended to $86.57.

Fundamentally, several factors helped pressure crude prices today.

First, there was some profit-taking following last week's gains, particularly ahead of the U.S. announcement of additional sanctions against Iran.

Second, although the U.S. announced a new campaign aimed at further isolating Iran economically, the initial measures stopped short of immediately imposing tougher secondary sanctions on countries continuing to trade with Iran. That appears to have reduced fears that significant amounts of Iranian crude would suddenly disappear from the global market. Iran also continues to export oil to China…

The EURUSD is testing a key short-term support area after buyers failed to sustain a break above an important retracement level last week.

Last week, the EURUSD moved above the 50% retracement of the decline from the January 28 high to the June low. That midpoint level comes in at 1.1702. Buyers had their shot, with the price reaching near 1.1710 on both Thursday and Friday, but each attempt above the midpoint failed. The inability to extend higher ultimately helped push the pair back below the 50% level, with the price moving lower into Friday's close.

That failure has carried over into trading today, with the EURUSD extending to the downside and now testing an important cluster of support.

The first key area comes between 1.1655 and…

Trump is upset about comments from Doug Ford, who is the Premier of the province of Ontario (the largest province and home to much of Canada's manufacturing sector).

Trump writes:

Lots of “bluster” from Doug Ford, who is the Premier of the Canadian Province of Ontario, but who is better known as the less charismatic, intelligent, and overall unimpressive brother of the late, great, Rob Ford. America has been carrying Canada for decades, but no longer! The U.S.A. will always be far bigger, richer, and stronger than Canada. Without the United States, Canada couldn’t survive — It’s where they get all of their money and, because of their current bad leadership, primarily Governor Carney, and his Flunky, Ford, they will not be allowed to…

• Trump is calling leaders to ask them to cut ties with Iran
• Wants 'zero leakage' on sanctions
• Countries will ahve a finite timeline to shut down activities we have identified, if they don't we will use Treasury authorities
• Will not set specific timelines for cutting ties, we don't have infinite patience
• Every country should be prepared to face US sanctions if they support Iran
• I expect a major financial institution to be sanctioned this week
• Do not take use of secondary sanctions lightly
• Would like Canada to come to the table and negotiate in good faith

I'm surprised to see oil lower today. There is a real debate on how much oil Iran is blocking in the Strait but eventually it's a number that matters and the US has entered some kind of war of…

The price of Bitcoin is up $2,300, or 3.0%, at $79,765, with the high for the day reaching $79,989 — just short of the natural resistance at the $80,000 level. Since bottoming at $57,735 at the end of June, Bitcoin has now rallied more than 36%.

Technically, the move higher follows an extended period of consolidation. From July 4 through August 18, Bitcoin traded above and below its 100- and 200-bar moving average on the 4-hour chart (blue and green lines on hte chart above) as buyers and sellers battled for control. Since then, however, the buyers have taken a firmer grip.

The move higher has taken the price above both its 100-day moving average, currently at $66,113, and its 200-day moving average at $69,092. Those breaks helped shift the…