Dear valued client,
Markets posted moderate gains following a week of light economic news.
In Canadian Parliament news, after an initial failed attempt, the Conservative Party has introduced a second non-confidence motion aimed at toppling Prime Minister Justin Trudeau’s minority government. Conservative Leader Pierre Poilievre’s latest motion accuses the Liberals of driving up housing costs, increasing taxes, and mismanaging crime, while calling for an election to “axe the tax, build the homes, fix the budget, and stop the crime.” Despite the Conservatives’ efforts, the first motion was defeated by a 211-120 vote, with the Bloc Québécois, NDP, and Greens siding with the Liberals. If passed, a non-confidence motion would force a snap election. The Bloc has given the Liberals until October 29 to pass two of its bills, threatening to withdraw support and discuss bringing down the government if the demands are not met. Tensions have escalated in Parliament, with Trudeau and Poilievre exchanging heated words and Trudeau apologizing for using unparliamentary language. The Conservatives plan to introduce additional non-confidence motions before the end of the year as they ramp up pressure on the Liberals, whose support has hit a new low according to recent polling.
U.S. ports on the East and Gulf Coasts are on high alert as dock workers prepare for a potential strike if a new contract is not reached by October 1. The International Longshoremen’s Association, representing up to 45,000 workers, is in tense negotiations with the United States Maritime Alliance, which represents port operators. The primary disputes are over worker pay and plans to automate certain container operations. A strike could significantly disrupt major ports handling 60% of U.S. shipping traffic, impacting supply chains for critical goods like medicine, car parts, and perishable foods. Analysts estimate that a labor stoppage could result in $5 billion in economic losses per day and cause weeks of shipping delays, despite some businesses rerouting shipments to the West Coast. The potential disruption could also slow manufacturing, create shortages, and accelerate inflation—factors that may have political consequences in the upcoming November elections. The U.S. Department of Labor may step in to mediate and expedite negotiations to prevent a strike and the economic turmoil that would follow.
The United States has urged Israel to seek diplomatic solutions and avoid an all-out war with Hezbollah amid a dramatic escalation of violence along the Lebanese border. Over the weekend, Israeli airstrikes targeted 1,300 sites in southern and eastern Lebanon, killing over 490 people and injuring 1,600 others, making it the deadliest day in Lebanon since the 2006 conflict between Israel and Hezbollah. Hezbollah has responded by launching deeper missile attacks into Israeli territory, prompting fears of a wider regional conflict that could potentially draw in Iran, Hezbollah’s primary backer. The Biden administration, including Defense Secretary Lloyd Austin, has pushed Israel to de-escalate the situation as thousands of Lebanese flee the south and more than 60,000 Israelis remain displaced from northern border areas. The continued exchange of fire, targeted killings, and Israeli strikes on Hezbollah’s communications network have increased tensions to a critical level, with both sides seemingly on the brink of full-scale war.
Caroline Ellison, the former CEO of Alameda Research and key accomplice in the FTX fraud case, has been sentenced to two years in a minimum security prison for her role in the collapse of the crypto exchange. Despite her cooperation with investigators and expressions of remorse, Judge Lewis Kaplan ruled that Ellison could not entirely avoid prison time for her involvement in defrauding investors. While her defense team argued for no jail time, citing her assistance in building the case against FTX founder Sam Bankman-Fried (who received a 25-year sentence in March), Kaplan emphasized that the seriousness of the crime warranted incarceration, stating, “there cannot be a get out of jail free card” for such offenses.
“It takes something more than intelligence to act intelligently.” – Fyodor Dostoevsky
Have a terrific weekend,
PW
