Dear valued client,
Markets rose again this week as Canadian inflation dropped to 1.6% in September (compared to 2% in August and 2.5% in July), its lowest level in three and a half years. This sharp decline, well below the Bank of Canada’s 2% target, has prompted economists to call for a more aggressive interest rate cut at the Bank’s next meeting on October 23rd. Many now predict a 50 basis point cut to stimulate the slowing economy, which has been struggling with high unemployment and weak consumer and business sentiment.
In Canadian political news, Prime Minister Justin Trudeau testified for the second time at the Foreign Interference Inquiry, taking a notably different tone by alleging that he has received highly classified intelligence indicating that some Conservative Party members, as well as politicians from other parties, are either involved in or vulnerable to foreign interference by unnamed hostile states. This explosive testimony comes at a time when Trudeau’s leadership is under significant pressure, with some Liberal MPs quietly calling for his resignation. Sources indicate that these calls may soon become formal demands, potentially starting with a written request, followed by discussions at the upcoming caucus meeting. Moreover, tensions between Canada and India have escalated after the federal government and the RCMP alleged that Indian government agents are linked to violent criminal activities in Canada, prompting Ottawa to expel Indian diplomats. India dismissed the claims as “preposterous” and retaliated by expelling six Canadian diplomats. NDP leader Jagmeet Singh has called for an emergency study into these allegations. Relations between the two countries are now at their lowest point. The U.S. may play a key role in resolving the impasse.
Election prediction markets have surged in popularity, drawing billions as platforms like Kalshi, PredictIt, and Polymarket compete with traditional polls as indicators of political outcomes. Polymarket leads the market, having handled $1.9 billion in election bets. However, betting markets (currently favoring Donald Trump) often reflect different probabilities than national polls which indicate a much closer race. Israeli forces have confirmed the killing of Yahya Sinwar, the leader of Hamas and mastermind behind the deadly October 7 attacks that left 1,200 Israelis dead and resulted in the abduction of roughly 250 hostages. Sinwar, who had been hiding and overseeing Hamas’s military operations, was a key target for Israel, particularly after those attacks, which triggered a massive Israeli assault on Gaza. Sinwar’s death was confirmed through DNA testing after his body was found following a firefight in Gaza. While Israeli Prime Minister Benjamin Netanyahu called it the “beginning of the end” of the conflict, he emphasized that military operations would continue. Some U.S. officials expressed hope that Sinwar’s death could lead to a reduction in violence and suffering in Gaza.Netflix exceeded earnings expectations in Q3, adding 5 million new subscribers and bringing its global total to over 282 million. The streaming giant generated nearly $10 billion in revenue for the quarter, a notable increase from the same period last year. Despite its growth, the pace has slowed, leading analysts to predict another potential price hike in the U.S., as Netflix has done in the past.
In a groundbreaking achievement, SpaceX successfully caught the booster of its Starship rocket using metal “chopsticks” at its Texas launch pad, marking a major milestone in reusable rocket technology. The test flight, Starship’s fifth, showcased its powerful design, standing nearly 400 feet tall and consisting of the Super Heavy booster and the Starship spacecraft. After separating at an altitude of 40 miles, the booster returned to Earth and was caught by the launch tower while Starship splashed down in the Indian Ocean. This successful catch highlights SpaceX’s vision for reusable rockets, which significantly reduce costs and turnaround times for space missions. Starship is crucial to NASA’s plan for landing humans on the moon and aligns with Elon Musk’s long-term goal of sending people to Mars, with multiple test flights planned for the next two years.
“I don’t create companies for the sake of creating companies, but to get things done.” – Elon Musk
Have a terrific weekend,
PW
