HEADLINES
Aecon Buys South Carolina Facility to Strengthen U.S. Nuclear Fabrication Capabilities
Aecon expanded its footprint in the U.S. nuclear industry with the acquisition of a fabrication plant in South Carolina, bolstering its ability to support growing demand for nuclear-power projects across the country.
The Canadian construction company said the 120,000-square-foot facility in Jackson would strengthen its ability to provide localized fabrication capacity for U.S. customers.
Aecon has used the site since 2015, and said advancing the facility's operations would play a key role in delivering manufacturing services for nuclear refurbishment, life extension, new build and federal projects. The facility also would support conventional power and industrial projects, it said.
Aecon's shares rose 1.3% to C$44.61.
Satellos Bioscience Shares Climb After FDA Fast Track Designation
Satellos Bioscience's shares jumped after the Duchenne treatment being developed by the biotechnology company received fast track designation in the U.S.
Shares climbed 10.3% to C$11.25.
Satellos said the Food and Drug Administration granted SAT-3247 fast track designation, a process designed to help development and expedite the review of drugs that treat serious conditions and address unmet medical needs. The company is currently advancing SAT-3247 through ongoing Phase 2 studies in children and adults living with Duchenne muscular dystrophy.
BlackBerry Target Lifted by RBC Though Shares Have Already Jumped
RBC Capital Markets bumped up its target for BlackBerry's shares but views the risk-reward as less attractive in light of the sharp rally the stock has seen.
The Canadian tech company reported its largest earnings beat in the last year for the first quarter, thanks to what RBC's Paul Treiber says was solid development seat license sales at its QNX unit and perpetual license revenue at its Secure Communications business.
"While quarters may be lumpy due to one-time revenue, BlackBerry is moving into a period of headline growth following a period of transformation."
RBC's target rose to $9 from $4.50 but it maintains a sector perform call.
BlackBerry's shares jumped nearly 10% to C$17.74 in Toronto. The stock rose 9.5% to $12.48 in New York.
Aegis Brands CEO Steven Pelton Steps Down
Aegis Brands President and Chief Executive Steven Pelton will relinquish the company's reins before his successor is picked, leaving an executive committee to lead day-to-day operations.
The owner of the St. Louis Bar & Grill brand and holder of the master franchise for the Sweet Jesus ice cream brand in Canada said Pelton stepped down to pursue another professional opportunity.
Aegis in late May said Pelton would be stepping down after seven years leading the company but that he would remain at Aegis after his successor is appointed to ensure a seamless leadership transition.
Chair Anthony Longo said the board was confident the leadership team of Chief Financial Officer Melinda Lee, Chief Operating Officer Chris and Vice President of People Tara Ramsay can run operations while it searches for a new CEO.
Gold and Silver Prices Are Falling Like Rocks
Precious metals prices are on track for their largest quarterly losses on record, dragged down from the peaks in late January by doubts about the path of interest rates and investors who are shedding riskier assets.
Gold futures fell Monday to $4,022.30 a troy ounce, bringing the second-quarter decline to a record $625.30. Gold has shed more than $500 an ounce, or roughly 12%, in June alone on pace for its worst month since June 2013.
Silver futures are down 22% this quarter, which would be the worst quarter in 13 years percentage wise. In dollar terms, a troy ounce of silver, which settled Monday at $58.175, is on track to fall by a record $16.515 during the quarter.
IsoEnergy Suspends Exploration at Saskatchewan Project Due to Wildfire Risk
IsoEnergy evacuated most of the field workers and suspended exploration due to a wildfire near its Larocque East uranium project in northern Saskatchewan.
The fire doesn't currently pose a threat to the project site but the conditions are considered too dangerous for exploration work to proceed, IsoEnergy said.
The Saskatchewan Public Safety Agency guidance suggests personnel could remain away from the project for up to one week. IsoEnergy said a one-week evacuation shouldn't impact its ability to complete the current planned drilling program for the project.
TALKING POINT
Brace for More Trade Limbo Between the U.S., Mexico and Canada. These Sectors Could Feel It Most.
By Reshma Kapadia and Molly Bordoff
Trade is back on the agenda this week. The U.S., Mexico and Canada need to decide by Wednesday to renew their trade pact, which governs roughly $2 trillion in goods trade, scrap it-or enter a limbo period of continued negotiations and annual reviews of the deal over the next decade until one calls it quits or they compromise on changes for an extension.
The pact, known as USMCA, was heralded as one of the biggest successes of the President Donald Trump's term. But as the July 1 deadline for the agreement's first formal joint review approaches, analysts don't see a clean renewal of the pact that governs America's largest trading relationship, with 30% of U.S. exports going to Canada and Mexico.
Trump has said he would like to terminate it, and prefers bilateral rather than trilateral deals. While formal discussions have begun with Mexico, which has a larger amount of issues on the table including security and immigration, relations with Canada remain fraught.
Analysts see more trade limbo ahead, with no renewal nor withdrawal but instead continued negotiations and the pact subject to annual review for the next decade-or until a country pulls the plug or the three agree to renew it. While this purgatory may not rattle the market like last year's tariff battles, it will be an irritant for sectors reliant on the relationship such as autos, metals and agriculture.
Analysts are also bracing for threats this week from Trump that he will pull out of the pact. Follow-through would require six months' written notice and Congress to signoff-moves that would likely trigger a market and economic earthquake by raising tariffs on a swath of goods that have been exempt from last year's levies.
But geopolitical strategists note recent frustration among Republicans with the war in Iran and worries about further cost increases ahead of the midterms lowers the odds of a withdrawal. Another consideration: Nine of the 10 states with the biggest chunk of their exports coming from Canada or Mexico voted for Trump in 2024, according to the Peterson Institute.
That lowers the odds of an actual withdrawal. But even limbo could mean higher costs. "The prospect of annual reviews is fatal to long-term investment, such as mining or refining," says Gary Hufbauer, an analyst at the Peterson Institute for International Economics. "Just too much business uncertainty."
That uncertainty will be felt most in sectors dependent on the trade such as autos, metals like aluminum, energy, fruits and vegetables. The North American trading bloc's competitiveness could end up as collateral damage if the extended delay slows investment plans, says Grace Fan, head of global policy at TS Lombard. The most likely beneficiary: China.
One of the changes the U.S. is seeking pertains to rules of origin-increasing the required local content percentage for tariff benefits-to prevent China from using neighboring countries to evade tariffs. Meanwhile, Mexico and Canada want some reprieve in sectoral tariffs such as the 50% levies on aluminum, steel and copper.
The U.S. is unlikely to reduce these much unless it gains ground on thornier issues, especially with Canada on lumber or dairy, says Owen Tedford, an analyst at Beacon Policy Advisors. If they get some reductions, it could be a boost for U.S. autos and manufacturers impacted by the levies.
Autos
Jefferies analysts see autos as the "core fault line" in negotiations, as more than a fifth of USMCA-related trade is auto-related. U.S. Trade Representative Jamieson Greer wants to see more auto production move back home, with more content of each car coming from the U.S.
One complication: Carmakers can't make a vehicle without China because it is an electronics powerhouse and often the exclusive provider of cameras and sensors, said Flavio Volpe, president of Canada's Automotive Parts Manufacturers' Association, during a trade panel held by Cato Institute.
In a letter to Greer, U.S. auto trade groups said that extending the pact would signal to them to invest, innovate and hire in the U.S. while a move toward separate bilateral pacts would "undermine the very supply chains the agreement was designed to strengthen."
A bilateral deal with Mexico that increases U.S. car content would boost production and benefit U.S. auto makers, with General Motors the most exposed to USMCA of the U.S. auto makers, says RBC Global's lead auto analyst Tom Narayan.
But bilateral deals would create more complexity and undermine the investments that have integrated supply chains. U.S. auto prices could see a 10% increase if the deal was unwound, estimates Hufbauer.
Energy
The trade pact offered a regulatory framework and investor protections for cross-border energy investments-including the electricity, natural gas and refined product trade critical for data centers, according to a recent report by analysts at the Center for Strategic and International Studies. Without USMCA, the analysts caution that the capital needed to expand and modernize energy infrastructure could dry up.
Agriculture Farmers rely on integrated supply chains running through the continent to export livestock, grains and produce and unraveling the deal would mean higher food prices and lower margins for food producers who would face more inspections and need to navigate differing standards. The trade pact has reduced Americans' average grocery bill by $700 a year, Scott Linciome, vice president of general economics at CATO said during a panel the think tank held last week.
About a third of U.S. agricultural products go to Canada and Mexico, with Mexico consistently one of the top two buyers of U.S. corn and Canada the largest importer of U.S. ethanol. Those positions give the countries bargain power, especially as farmers have already been hit by last year's tariffs, losing share to Brazil that could gain even more share if the pact unravels.
Companies to watch include grain processors and traders like Archer Daniels Midland and Cargill, ethanol producers and machinery and fertilizer companies with direct exposure to the economic fate of U.S. farmers. Any moves that reduce U.S. production could hit these companies as well as agricultural commodities broadly.
Elijah Nicholson-Messmer contributed to this article.
Write to Reshma Kapadia at [reshma.kapadia@barrons.com] and Molly Bordoff at [molly.bordoff@barrons.com]
Expected Major Events for Tuesday
04:30/JPN: May Preliminary Report on Petroleum Statistics
05:00/JPN: May Housing Starts
05:00/JPN: May Construction Orders
06:00/GER: May Foreign trade price indices
06:00/UK: 1Q Balance of Payments
06:00/UK: 1Q Business investment revised results
06:00/UK: 1Q UK quarterly national accounts
06:00/GER: May Retail Trade
06:45/FRA: May Housing starts
06:45/FRA: May Household consumption expenditure in manufactured goods
06:45/FRA: May PPI
06:45/FRA: Jun Provisional CPI
07:55/GER: Jun Labour market statistics (incl unemployment)
08:00/ITA: May PPI
08:00/GER: Jun Bavaria CPI
08:00/GER: Jun North Rhine Westphalia CPI
08:00/GER: Jun Saxony CPI
08:00/GER: Jun Brandenburg CPI
08:00/GER: Jun Hesse CPI
08:00/GER: Jun Baden-Wuerttemberg CPI
08:59/JPN: Jun Monthly Economic Report
09:00/ITA: Jun Provisional CPI
09:00/ITA: Jun Cities CPI
12:00/GER: Jun Provisional CPI
12:30/CAN: Jun Principal field crop areas
12:30/CAN: Apr GDP
12:55/US: 06/27 Johnson Redbook Retail Sales Index
13:00/US: Apr U.S. Monthly House Price Index
13:00/US: Apr S&P Cotality Case-Shiller Indices
13:45/US: Jun Chicago Business Barometer - ISM-Chicago Business Survey - Chicago PMI
14:00/US: Jun Consumer Confidence Index
14:00/US: May Job Openings & Labor Turnover Survey
20:30/US: API Weekly Statistical Bulletin
23:50/JPN: 2Q Tankan Survey of Enterprises in Japan
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Tuesday
Constellation Brands Inc (STZ) is expected to report $3.16 for 1Q.
Fathom Holdings Inc (FTHM) is expected to report $-0.06 for 1Q.
Mega Matrix Inc (MPU) is expected to report for 1Q.
NIKE Inc (NKE) is expected to report $0.12 for 4Q.
National Beverage Corp (FIZZ) is expected to report $0.47 for 4Q.
Progress Software Corp (PRGS) is expected to report $0.39 for 2Q.
Scorpius Holdings Inc (SCPX) is expected to report for 4Q.
Scully Royalty Ltd (SRL) is expected to report for Full year.
WeShop Holdings Ltd (WSHP) is expected to report for 1Q.
Wins Finance Holdings Inc (WINSF) is expected to report for Interim.
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This article is a text version of a Wall Street Journal newsletter published earlier today.