Finance Evening | Carney Pitches Canada at Toronto Summit; Treasury Yields Near 5% Rattle Tech Stocks

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Carney Kicks Off Toronto Summit to Pitch Canada to Trillions in Global Capital

Source: BBC

Canadian Prime Minister Mark Carney is hosting a global investment summit in Toronto this week, pitching Canada to more than 100 investors who oversee over C$100 trillion ($72 trillion) in assets. The two-day event opens Monday with a private dinner hosted by Carney, followed by a keynote address Tuesday morning.

Ahead of the Sunday gala, Carney said the investors "will come to 'peer into our shop window' because the world is looking at Canada differently." Attendees include sovereign wealth funds from the United Arab Emirates and Norway, as well as finance executives such as BlackRock CEO Larry Fink and Blackstone president Jon Gray. Former prime minister Stephen Harper will close the conference.

The summit is co-hosted by the Canada Pension Plan Investment Board. Carney hopes to pitch Canada's energy and resource sectors and its political stability, aiming to draw money into AI, defence, transportation and infrastructure projects. Protests are also planned in Toronto on Monday.

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Ahead of the Fed Decision, Bessent Reminds Markets of the Bond Market's Power

Source: Fortune

Markets widely expect the Federal Open Market Committee meeting that concludes Wednesday to deliver a rate hike — the opposite of what President Trump wants from monetary policy. The latest jobs report came in stronger than expected, while inflation remains stubbornly above the Fed's 2% target.

Treasury Secretary Scott Bessent, asked at the Economic Club of New York whether Chair Warsh faces pressure from the White House to cut, said he is "confident" Warsh will "optimize the path for both inflation and economic growth," and cited Trump's remarks at Warsh's swearing-in that he should be independent. Bessent added: "the bond market has taken out more governments than howitzers."

The report notes that Bessent recently launched a multi-billion-dollar Treasury buyback scheme that briefly pushed yields lower to ensure greater market liquidity. Oxford Economics chief global economist Ryan Sweet warned that if a central bank sits on the sidelines while inflation runs hot, the bond market could read it as policymakers "accepting a higher path for inflation," driving long-term rates higher.

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Analyst: U.S. Stocks Are in a 'Late-Stage Bubble' and Could Crash 21% Next Year

Source: Fortune

James Reilly, senior markets economist at Capital Economics, reiterated a forecast for the S&P 500 to end this year at 8,250 — up 7.7% from Friday's close — then plunge 21% to 6,500 by the end of 2027. "On balance, we think the data look consistent with a late-stage bubble," he wrote in a note.

Reilly flagged several bubble indicators: the market's cyclically adjusted price-to-earnings ratio is close to its dotcom peak; forward 12-month earnings-per-share growth for the S&P 500 is in line with the dotcom peak; combined free cash flow for the top AI hyperscalers is expected to turn negative in 2027; market-cap concentration is at extreme levels; and equity issuance is booming.

Rockefeller International Chairman Ruchir Sharma recently warned the AI bubble could pop when the 10-year Treasury yield "decisively breaches" 5%. The 10-year rate hit 4.97% on Friday. Wall Street veteran Ed Yardeni lowered the odds of his "Roaring 2020s" scenario from 80% to 70%.

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'Big Short' Investor Burry: AI Leaders' Calls for a Slowdown Are 'Self-Serving'

Source: Business Insider

Investor Michael Burry, known for "The Big Short," said in a late Sunday post on X that it was "self-serving" for bosses of OpenAI, Anthropic and other AI companies to push for a slowdown. The comments came after Anthropic CEO Dario Amodei published an essay urging his peers to "slow the pace" of AI advances to give risk prevention time to keep up.

In his Substack, "Cassandra Unchained," Burry said Anthropic and OpenAI's top brass backed a slowdown "to increase the perception of their power before their IPOs." He also said large language models like Claude and ChatGPT won't achieve "true capacity for reason," so there is "nothing to fear," at least for now.

Investors reacted to the prospect of slower growth by selling AI stocks on Monday. Nvidia, the world's most valuable public company and a key supplier of AI chips, slid 3% in premarket trading, while peers including Intel, Micron and SK Hynix slumped more than 5%. OpenAI's Sam Altman, xAI's Elon Musk and Alphabet's Demis Hassabis all posted in support of Amodei on X.

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Oracle Stock Falls as Ellison Abandons a Sale, Adding to the AI Selloff

Source: The Motley Fool

Shares of AI cloud provider Oracle slid on Monday after a weekend report showed co-founder Larry Ellison was abandoning plans to sell up to $7.5 billion worth of Oracle stock. Such news would typically lift the stock, but it came as investors sold some AI shares amid calls from Anthropic and OpenAI for more AI regulation.

Ellison changed his mind about selling up to 50 million shares, a plan originally set in motion in June. He controls about 40% of Oracle, so his sales are watched closely. Oracle stock was down 4.5% as of 11:04 a.m. ET.

Investor pessimism is also driven by the growing belief that the Fed may hike rates at its next meeting, which could make Oracle's AI spending even more expensive — higher rates mean its debt expenses could climb. An inflation report last week showed wholesale prices kept climbing in August, while oil prices kept rising because of the war in Iran.

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Microsoft Unveils 37-Page 'Humanist AI Code of Conduct'

Source: Fox Business

Microsoft on Monday revealed a draft of a new "Humanist AI Code of Conduct" outlining the principles that will govern its AI model development, seeking feedback before publishing a revised version later this year. The company said it will take feedback over the next six weeks, incorporate it into the revised version, and use it to guide development of Microsoft AI (MAI) models.

The document stresses that "people matter more than AI" and that "humans must retain meaningful control over AI." Microsoft added that the code will "guide our model development in 2027 and beyond." The document runs 37 pages and was developed over five to six months.

Mustafa Suleyman, CEO of Microsoft AI, told Reuters it's "clearly now time to coordinate among the labs so we can ensure that we have control of this technology." The release comes as OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei call for third-party oversight of AI model development. Microsoft CEO Satya Nadella has also emphasized that superintelligence must remain "under human control."

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Iran War Lifts Freight Rates; This Fund Is Up About 3,600% This Year

Source: CNBC

As investors hunt for returns far and wide, an unlikely corner of the global economy has racked up the biggest gains of all: oil tankers. The Breakwave Tanker Shipping ETF (BWET) is up roughly 3,600% year-to-date as of early September, making it the best-performing non-levered fund in the U.S. The U.S.-Iran conflict has squeezed tanker traffic through the Strait of Hormuz, turning an obscure freight investment into one of Wall Street's best trades.

The report notes that Iran-backed Houthi rebels took control of Yemen's key seaport of Mocka last week, threatening Red Sea shipping, and that Saudi officials ordered a shutdown of the kingdom's crucial East-West crude oil pipeline last week after drone attacks from Iraq. John Murillo, chief business officer of B2BROKER, noted that BWET tracks the price of shipping oil rather than crude itself: "It has very little to do with the oil price itself... and depends mainly on geopolitics."

Rates on the Middle East oil tanker routes it tracks are up close to 500% year over year, according to BWET's Sept. 8 report. Eric Fullerton of supply-chain platform Project44 said 140,276 total shipping disruptions have been flagged this year. The report also noted that air freight rates were up 18.1% year over year in August.

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As Diesel Hits a Record, Costco Starts Rationing Motor Oil

Source: CarBuzz

Global oil supply has been hit hard by Middle East unrest, and diesel recently hit an all-time high, climbing above a nationwide average of $6. Now motor oil is tight too: according to The Auto Wire, Costco started rationing its house brand, Kirkland Signature motor oil, earlier this week.

According to the report, Kirkland Signature full-synthetic oil roughly doubled in price in just a few months — 10 quarts now cost $58, compared with about $30 in April. Costco also put a weekly cap on purchases: no more than two 5-quart jugs per customer per week.

Motor oil supply is squeezed because refiners find it more profitable to turn crude into gasoline and diesel. GM's Dexos certification licensing fees and the American Petroleum Institute's strict guidelines also push up costs. With the Strait of Hormuz closure blocking around 20 million barrels a day, other retailers may follow suit.

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Report: U.S. Winter Heating Bills Expected to Rise Nearly 9%

Source: WESH

The National Energy Assistance Directors Association (NEADA) projects that heating a U.S. home could cost nearly 9% more than last winter, even with El Niño expected to bring warmer weather. From mid-November through mid-March, households are expected to spend an average of $1,030 on heating, an $82 increase.

Among heating sources, heating oil is expected to see the highest increase, costing consumers an average of nearly $2,300 — up 31% from last year's estimate of nearly $1,800. Heating oil prices are tied to global oil markets: before the U.S.-Iran conflict, Brent crude traded at about $72 a barrel; now it costs more than $100, with shipping through the Strait of Hormuz limited.

Households relying on electricity can also expect about 9% higher bills, with AI data centers pushing up power demand. The Northeast will feel the greatest impact, with electricity averaging about 24 cents per kilowatt-hour versus 16 cents in the Midwest and 15 cents in the South. NEADA executive director Mark Wolfe said, "We need to think about this as the era of cheap energy is over," recommending caulking leaks, replacing old furnaces, or seeking energy-assistance programs.

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Study: Even Used Cars Are Becoming Unaffordable in the U.S.

Source: AutoGuide

According to an iSeeCars study analyzing more than 11.4 million used vehicle sales, finding a late-model used car under $20,000 is rapidly becoming a thing of the past. In 2019, a $20,000 budget gave buyers access to nearly half (49.4%) of all 3-year-old used cars; today that same budget covers just 11.4%.

The average price of a 3-year-old used car has climbed 38.2% (over $9,000). "A lot of people keep a car for 5 to 6 years, so when they re-enter the market, they aren't tracking this every year. They get completely blindsided by how much prices have gone up," said Karl Brauer, executive analyst at iSeeCars.

The study also found that affordable sedans saw far higher percentage increases than many SUVs — models such as the Hyundai Elantra, Toyota Camry and Honda Civic became destinations for budget-conscious buyers, and the surge in demand pushed prices up. The high end rose even more: the average used Porsche 911 climbed 74.0% to over $230,000, while the Mercedes-Benz G-Class rose 72.8% to over $172,000.

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