The Weekly Setup: What every investor needs to know about tariffs, Aritzia and job numbers
Here are five things to watch for this week:
Want ads: Economists estimate Canada added zero jobs in June. That's not a typo. The consensus estimate for net job growth in a country of 20.7 million workers is 0.0. The unemployment rate is expected to advance to 7.1 per cent – the highest since the pandemic peak, or, apart from that, since April, 2016. Tariffs provide ample reason for pessimism. The manufacturing sector could post a third straight month of job losses, notes Benjamin Reitzes, Bank of Montreal managing director for Canadian rates and a macro strategist. 'U.S. steel and aluminum tariffs doubled in June, which will hit those already struggling sectors even harder,' Mr. Reitzes wrote in a note to clients. The data will be key for the Bank of Canada, which is set to make an interest-rate decision at month's end. The central bank has held rates steady at 2.75 per cent for two consecutive meetings, but the market is pricing in only a slight chance of a rate cut. If payrolls disappoint, this could sway the odds in favour of another cut.
Let's make a deal: The deadline for deals with the United States on tariffs is fast approaching. President Donald Trump set July 9 as the deadline for country-based tariffs to begin on trading partners without deals in place. With the deadline days away, deals have only been hammered out with Vietnam and Britain. Although the U.S. and China have agreed to a truce, which involves cooling it on reciprocal tariffs and lowering export controls, Canada has promised a deal by July 21. Does a deal matter to markets? The S&P 500 INX and the TSX TXCX are at record highs. So far, tariffs aren't hitting inflation; does that mean companies are absorbing them at the expense of margins? Could margins be the undoing for investors? BMO chief investment officer Sadiq Adatia says tariffs may actually increase a company's profitability. 'Let's say a 10-per-cent tariff is imposed on goods crossing the border,' he said on my podcast. 'Most consumers think prices will go up by 10 per cent. But only 40 per cent of the product's cost comes from raw goods. So, 10 per cent on 40 per cent is only a 4-per-cent tariff. Companies know people expect 10 per cent, so they might raise prices by 7 per cent and say, 'We're doing you a favour. We're not doing 10.' But they've increased their profits by another 3 per cent.'
High fashion: Someone forgot to tell Aritzia Inc. ATZ-T there's a consumer slowdown. The stock hit a record high last week, creating an interesting set-up for quarterly results due Thursday after markets close. Aritzia is expected to show a 150-per-cent rebound in profitability and a nearly 15-per-cent jump in same-store sales. In this economy? Apparently. With the stock trading at a hefty premium to peers (UBS estimates it at 48 per cent) it will make the quarterly results a nail-biter. Will Aritzia continue to buck the trend of weak consumer growth? Can it continue to manage around tariffs? As with most companies, it may come down to the outlook it provides. 'We believe the 'bar' for the event is ATZ maintains its FY26 operating guidance and provides a 2Q26 outlook supportive of the Street's C$0.37 EPS forecast,' Mauricio Serna of UBS wrote in a preview note. Jamie Murray of Murray Wealth Group flagged Aritzia as a winner on my podcast back in February. It promptly went straight down before recovering and reaching new highs. He's still holding. 'They've beat quarterly guidance by at least 5 per cent the past 3 quarters and we expect a similar result,' he wrote in an e-mail.
Hungry for change: Shares of MTY Food Group Inc. MTY-T have been grinding lower for years, and this week investors will get to assess if catalysts for the stock remain elusive when it reports results on Friday. MTY is known as a food-court purveyor of such brands as Manchu Wok and Mr. Sub, but it has diversified and has many free-standing restaurants. It is also known for its growth-by-acquisition business model – except recently it hasn't been growing or acquiring. Its last deal was in 2022 for Wetzel's Pretzels. While sales of that brand are strong, other brands haven't fared as well and same-store sales have struggled for five consecutive quarters. Even so, it is worth pointing out that MTY is a cash-flow machine reliably spitting out more than $100-million a year. Bank of Nova Scotia's John Zamparo wondered out loud, in a June note to clients, if this makes MTY an attractive takeout candidate. 'MTY's valuation is overly punitive,' he wrote, noting that MTY owns 90 brands but only three are interesting to investors (Wetzel's, Cold Stone, sweetFrog). 'Strategic buyers typically want simpler businesses … which leads to private equity as the likeliest acquirer,' Mr. Zamparo said.
Turbulence: Delta Air Lines Inc. DAL-N reports Thursday and will give investors a sense of travel demand. Between tariffs, geopolitics and a spike in gas prices, not to mention generally lower travel into the U.S., there was no shortage of volatility for airlines. We will see how all of this plays out. The airline is poised to report a 7-per-cent drop in revenue and 12-per-cent drop in earnings per share.
In the Money with Amber Kanwar brings you actionable insights from top portfolio managers and business leaders. New episodes out Tuesdays and Thursdays.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


CTV News
44 minutes ago
- CTV News
Windsor aims to make downtown cleaner with new electric street sweeper
The City of Windsor is hoping a new street sweeper will help cleanup the downtown core. As part of ongoing efforts to revitalize the downtown area through the Strengthen the Core: Downtown Windsor Revitalization Plan, the city introduced Monday a new electric-powered Glutton Zen street sweeper to its fleet. Officials say this investment reinforces the city's commitment to maintaining a clean, vibrant, and sustainable downtown environment and it's the first of its kind in the region. 'The new electric-powered sweeper will play an important role in creating the Downtown Windsor we all want to see, which is essential as we continue to implement improvements aimed at attracting more residents, businesses, investments, and visitors,' says Ward 3 councillor Renaldo Agostino. The Glutton Zen is a compact, 100 per cent electric vacuum designed for sidewalks, pathways, and paved alleyways, areas that are often difficult to access with traditional equipment. The unit's silent, emission-free operation makes it ideal for use in pedestrian zones, laneways, heritage areas, and mixed-use spaces, minimizing disruption to residents and businesses while supporting environmental goals. 'Cleanliness is one of the most visible and immediate ways we show that we care about our downtown; by investing in modern equipment like the Glutton, we're taking real action to support our local businesses, make our public spaces more enjoyable, and deliver on the promises of the Strengthen the Core strategy,' said Jim Leether, manager of environmental services. While initially deployed to support the Strengthen the Core initiative, the Glutton Zen will eventually be used across all business improvement areas (BIAs) citywide. This summer, the focus will be on the area of the Downtown Windsor Business Improvement Association (DWBIA), with plans to expand to other BIAs in the coming year. 'The deployment of the Glutton Zen sweeper is a visible step forward — one that supports a higher quality of life for current residents and helps attract new ones,' says DWBIA ChairChris MacLeod. Officials say this initiative builds on the success of the city's 'Curb the Trash' campaign. To learn more about the City's Strengthen the Core: Downtown Windsor Revitalization Plan, visit

Globe and Mail
an hour ago
- Globe and Mail
Market Factors: Buy utilities and let others stress about markets
In this edition of Market Factors, a Wall Street strategist suggests buying defensive stocks and forgetting about chasing growth stories. A prominent sentiment indicator brings bad news and a physicist makes a remarkable discovery about dense crowds of people. Prominent Wall Street strategist Richard Bernstein thinks equity investors should more or less throw in the towel on risk assets, buy utilities and collect dividends and stable earnings. In a recent report called A bird in the hand, Mr. Bernstein writes that 'Investors' guidelines regarding the basics of building wealth seem distorted by the current speculative period.' In his mind, investors have lost the plot – scrambling to chase the riskiest sector returns while forgetting the time-honoured route to wealth. Mr. Bernstein notes that the returns of the stodgy U.S. utilities sector is neck and neck with the tech-heavy Nasdaq Composite since 1971. Investors in utilities, to state the obvious, don't have to endure anything close to the volatility experienced by Nasdaq investors. The logic transfers to the domestic market in remarkable fashion – returns for utilities and the broader S&P/TSX Composite Index are virtually the same. Since 1990, as far back as my data goes, the average annual return including dividends for the S&P/TSX Composite is 7.98 per cent. For utilities it's 7.69 per cent annually. Domestic investors in utilities would likely have slept a lot better than speculative investors over the past 35 years. They'd be mostly unaffected by the wild swings in the benchmark caused by Bre-X Minerals Ltd. as well as Nortel Networks and the rest of the late 1990s technology favourites. Utilities investors generated the same returns for the period, making the risk-adjusted returns better than the overall benchmark by orders of magnitude. It's not difficult to understand Mr. Bernstein's timing in writing his piece. U.S. valuations are very extended while investors are pushing the market higher despite risks presented by arbitrary tariff policy, a potential threat to Federal Reserve independence and military conflicts in the Middle East. Risk tolerance might be higher than it should be, in other words. There is one important caveat here and that's interest rates. From September 1990 to 2020, the Government of Canada ten-year bond yield fell from 11.2 per cent to 0.5 per cent, and has since retraced some ground to 3.4 per cent. Every move lower made the dividend yield on utilities stocks more attractive. The trend now is likely flat to higher so the tailwind from steadily declining rates is no longer in effect. Even with this in mind it is tempting to move assets to utilities and worry less about the course of broader equity markets. Citi's Levkovich index, named after the late strategist Tobias Levkovich, has entered euphoria territory, signaling a high probability of a market pullback. The Levkovich index comprehensively measures investor sentiment using NYSE short interest, GDP growth, profit expectations, inflation, bond spreads, two-year Treasury yields and the New York Federal Reserve recession probability index The Levkovich index is contrarian – at extremes the equity market is likely do the opposite of investors' expectation. The median forward 12-month S&P 500 performance when the index is in the euphoria range, for instance, is -9.7 per cent. The probability that equity returns will be positive in the 12-months following a euphoria reading is a meagre 29 per cent. A new study published in Nature showed how fluid dynamics can be applied to predict the oscillations of movements in densely packed crowds. The crowds must be really packed in tight for it to work – four people or more per square meter. The insane, chanting Spaniards at the San Fermin Festival in Pamplona were used for the study. Previously, attempts to model the movement of large crowds extrapolated the activity in small crowds. Didn't work. The successful study was done by physicists who treated people in crowds as more mindless, like water molecules, instead of accounting for 'active-matter hydrodynamics' or individual choices or forces. Videos of the crowds in Pamplona were found to feature 'asymmetric orbital oscillations' at predictable intervals. Speaking of videos, Nature produced an excellent one on the topic here. This study is not entirely a diversion for investors. Benoit Madelbrot's study of cotton pricing is only one of many examples of academics continually attempting to render the complexity of asset prices, which seem on the surface to be as random as the movements of large crowds, into predictable formulas. Looking for our updates on market movers, analyst actions, stock technicals, insider trades and other daily, weekly and monthly insight? Click here to visit our Inside the Market page. David Berman explains why Deere has been a strong, off-the-radar, recent outperformer David Rosenberg says he's profoundly disappointed in the U.S. budget bill, and has some portfolio tips on how to position for the ticking demographic time-bomb Tim Shufelt brings us up to date on the domestic economy - and reports that, rather surprisingly, it's not broken yet The net change in employment for June on Friday is the domestic economic data highlight for the coming week. Economists expect a loss of 1,500 jobs. The unemployment rate for June will be released the same day and one tick higher to 7.1 per cent is expected. There are no earnings releases of note on the schedule. U.S. wholesale inventories for May are out on Wednesday and a drop of 0.3 per cent month over month is forecast. The FOMC minutes will also be released Wednesday where we'll find out if any governors were leaning towards cutting rates. The earnings calendar is also light south of the border for the coming week. Conagra Brands Inc. (US$0.587 per share expected) and Delta Air Lines Inc. (US$2.066) on Wednesday are the only two of note. See our full earnings and economic calendar here


CBC
an hour ago
- CBC
Transport committee to debate whether to study B.C. Ferries' Chinese ship contract
The House of Commons transport committee is meeting Monday to decide whether to study B.C. Ferries' decision to purchase four Chinese vessels. B.C. Ferries announced last month that it hired China Merchants Industry Weihai Shipyards to build four new ships after a five-year procurement process that did not include a Canadian bid. Federal Transport Minister Chrystia Freeland sent her B.C. counterpart a letter on June 20 saying she is "dismayed" by the deal and expects B.C. Ferries to mitigate potential security risks. She also asked the B.C. government to confirm that no federal funding will be diverted to purchase the ferries. The Canada Infrastructure Bank contributed $1 billion to the deal and said in a June 26 statement that the new ferries "wouldn't likely be purchased" without this financing.