The Close for Monday, July 20, 2026

[00:00:09]Thanks for joining [music] us today on the close. I'm Mela Fernandez. Markets close in 30 minutes. Let's get to the stories we are following in the BNN Bloomberg newsroom.

[00:00:20][music] Canada's inflation rate slowed down last month. data from stats can shows the annual rate of inflation is [music] to 2.8% for June, lower than the 2.9% economists [music] were expecting. Gas prices eased and core CPI, which is the Bank of Canada's preferred measure, dropped [music] below 2% for the first time in about 6 years. Grocery prices [music] increased, shelter prices fell, and accommodation surged more than 10% as the FIFA [music] World Cup kicked off.

[00:00:56]>> [music] >> Cadillac Vines Corporation is aiming to raise $363 million [music] in its initial public offering. The Toronto-based mineral exploration company offering 50.2 million shares at >> [music] >> $6.90 each. The share is expected to trade on the Toronto Stock Exchange [music] under the symbol C A D Y.

[00:01:18]Cadillac will not trade in the US.

[00:01:21][music] Blockbuster earnings from AMC Entertainment, boosting the share price today. The theater chain company reported revenue of $1.6 [music] billion US for its second quarter, beating estimates. Adjusted earnings also topped expectations along with admissions and food and beverage sales.

[00:01:41][music] AMC says in the US and internationally, more than [music] 4.3 million movie goers attended theaters driven by the opening of Christopher Nolan's The [music] Odyssey.

[00:01:55]A quick look at where we are on the markets right now with the TSX down 224 points [music] or 6%.

[00:02:03]Let's have a look south of the border.

[00:02:06]The S&P not a material move on the day.

[00:02:08]The Dow Jones down [music] 5% or half of 1% 274 [music] points. The Nasdaq uh up today 56 points or 2% so far [music] on the day.

[00:02:23]The volatility in chip stocks continues as they rally today after a rough week.

[00:02:28]My next guest says dips are buying opportunities. Let's go to Nick Msh, portfolio manager at Purpose Investments. Nick, thanks for joining us today.

[00:02:37]>> Thanks for having me.

[00:02:38]>> What's causing the whiplash volatility in chip socks, surging one week, plunging the next, but demand is still high?

[00:02:45]>> That's right. There's still an absolute roller coaster going on here in the semiconductor index. And if you look at it on a year-to- date basis, it's still up very, very strongly. And what we saw here over the last little while was this drastic momentum unwind. So we saw a lot of these names really start to trade off together. And this is due to sort of a little bit of these market mechanics.

[00:03:02]There are a couple of these names that have run a little bit too much a little bit too quickly. And we've also got now levered ETF products which create a cascade of sort of triggered selling when you think about these sell-off moves to the downside. So I think a lot of these names people were going back to the drawing board saying like hey look do they look does it look like they make sense here and what really triggered it was this momentum unwind and if you look at kind of the factor of momentum itself it had the worst performance over the last 17 days since 2001. So we're seeing these kind of um quantitative based adjustments in the overall um stock market really uh factor to the downside when it comes to the price movement. But if you look at the fundamentals, look, the fundamentals still look super strong to me and that's why I think it's a buying opportunity here.

[00:03:44]>> Okay, let's talk about the rise of open source LLM, so large language models, and how that could impact demand for the higherend chips. We we talked about or we've seen China's moonshot as an example. Factor that in for me.

[00:03:57]>> [snorts] >> Yeah. So everybody's going here and they're saying look on one side as soon as you get these open source models the cost on an overall basis from a token perspective is starting to plummet which erodess the kind of competitive advantage of the frontier base. So those um anthropics and open AIs which a lot of money is going into and a lot of capital is attracted. So the theory there goes a hey if they can compete on a much cheaper basis with near equivalent intelligence then the unit economics at the frontier model level starts to look a little bit weaker which then can ripple through the system because of how interconnected all these individual components are. So I think that people are looking at this open source model and starting to kind of have that deepseek 2.0 I know a little bit of a panic moment, but they're reading this the wrong way because if you think about these companies overall, what this is all leading to is just more compute at the end of the day and wider adoption, which is really increasing the overall demand um from that perspective rather than shrinking it. So to me, I think of this as just really um the concept of Jevans paradox where as the incremental cost gets a little bit cheaper, people use net more of it to the effect where you're still increasing demand. So, I think the market is misreading this one. Um, and could be again a solid buying opportunity here for chip stocks.

[00:05:10]>> Okay. So, you're talking about buying the dip. Where would you put money in today?

[00:05:15]>> Mhm. So, I still really like the memory complex here. And if you think about all these different kind of evolutions of AI really started from this kind of retrieval system to this reasoning system to this agentic system and if you've played with around a lot of these tools, they really have to think and they have to essentially waypoint what they're doing in terms of their process of reasoning. So they go out and they think about sort of these different tool cases or these different application layers and they're saying okay we need to call on all these different um sort of CPUs as the orchestration layer and all these different tools in the overall system and memory is becoming a much bigger component in that. So we're seeing the kind of bill of materials when you think about it um on a series over series basis and because memory is in such high demand the component cost for memory individually has skyrocketed.

[00:06:01]We're seeing it in the DRAM prices because you can track this like a commodity and all this is leading to pricing power because it's such a uh a massive bottleneck in the overall ecosystem and pricing power leads to more earnings for these players. So the Micron and the SKH highixes of the world and over long periods of time earnings power is very highly correlated with stock prices. So I really like the memory component here still in the overall ecosystem.

[00:06:24]>> All right, we have tech earnings that kick off this week. Who are you watching? What are you watching for? The number one thing here is going to be those capex numbers. And if you kind of backtrack a little bit towards kind of the period of 2025, we thought that we were going to spend um around 350 billion on capex this year. That number is going to be close to a trillion. So what we're seeing here is just how off the market was before. Now what matters here is the rate of change moving forward. So if these companies go out and these hyperscalers, so the Metas, um the Googles, the Amazons, and the Microsofts of the world, if they go out and move their capex numbers back up, that's when we can see this semi-trade really being reignited. Now, if they go out and say, "Hey, look, we're cutting our capex because we have an over supply of it." I think this could be a very big um sort of concern to the overall market. So you kind of have this goldilock zone where the capex numbers are high enough where the semiconductor trades is still on um but not low enough where the rest of the market panics and you kind of need that um balance in between the two because what we're seeing over this period of time is the free cash flow is moving from those hyperscalers to the semiconductors in a massive way. So for that trade to resume you still need those capex numbers coming up and that's what I'll be looking uh for as a number one factor over earnings over the next couple weeks here.

[00:07:41]>> Okay, let's talk about Shopify and Celestica. uh they are uh volatile.

[00:07:46]They're getting some momentum I guess uh in the US. But what else could be helping these stocks?

[00:07:52]>> Yeah. And I think that this is really part of those that trade in on the overall basis in terms of everything being a little bit more correlated and all the kind of um high beta positions really being caught off in that riskoff trade. But if you think about Celeste like they're very tightly um integrated with the overall kind of Google ecosystem. So that's why that's going to be one that's specifically very exciting to watch. um as Alphabet does report tomorrow and we're going to see those kind of capex numbers come out. There's also different kind of supply chain components you have to look at in terms of what kind of contracts and what kind of um sort of uh battles in terms of the competitors that they're winning on a year-over-year basis and then on a contract over contract basis as well. So that's on the Celestica component in terms of that component of the supply chain overall. Now on Shopify, this is one where it's people are still trying to figure out hey what's the kind of disruption here? um and is people were basketing into this kind of software basket in the early days, but we figured out that hey look, these guys are actually playing very nice with the AI systems overall. They're integrating into the back end. They're enabling the entire process through it. So I think these names, while they do kind of trade a little bit with risk on baskets, they're also um very idiosyncratic in terms of being able to pick these names and being a little bit more out of an active stock picker in the market overall. So something to pay attention to in terms of over times of volatility everything correlations tend to move together. But when you have this sideways chop here, which is what I think we're going now that we already kind of went through that massive capitulation, that's when you can start to be a little bit more active of a stock picker. And that's when it's going to be really important to really check back to original thesis and track the fundamentals here over earnings period.

[00:09:27]>> Nick Mur, good to have you, sir. Thanks for joining us today.

[00:09:30]>> Thanks so much. Coming up next, oil prices higher again today after the US confirmed at least three service [music] members were killed in recent fighting with Iran. More in a moment.

[00:09:50][music] Oil prices edging higher today after the US president said Iran would pay for the deaths of three American service members killed in strikes on a military base in Jordan. Let's go to Treat Parsy, co-founder, executive vice president at the Quincy Institute for Responsible Statecraft. Thanks for joining us today.

[00:10:09]>> Thank you.

[00:10:10]>> You've called this a prelude. What does the next step look like?

[00:10:14]What I was referencing is that the initial military attacks that we have seen that frankly appear to be somewhat haphazard and not particularly strategic may just be a prelude towards a much larger escalation that we may see this week or the week after. Uh bottom line though is that so far out of after nine days of bombings, we've seen absolutely nothing that has changed the facts on the ground in a manner that Trump desired. And if there is a return to the negotiating table, and I'm saying if because I find that to be at least unlikely in the short term, we're not going to see a different posture from the Iranians. If anything, probably a hardened position.

[00:10:53]>> Okay. So, how would you characterize the conflict as it is for now? Is it tit for tat or the targets for each comparable?

[00:11:00]>> Uh, it is still tit for tat. We have not seen either the US side or the Iranians saying that they're going to escalate beyond. You know, there was a moment in which Trump said that he would hit 20 targets for each target the Iranians hit or the Iranians at one point so that they would retaliate with a scale of 1.5. That's not what we're seeing right now. So there seems to be at least so far a desire from both sides not to escalate in an uncontrollable fashion.

[00:11:25]That however does not mean that they necessarily have a deescalatory plan in mind or at least a deescalatory plan that potentially could work in mind.

[00:11:34]What would you see as an escalation?

[00:11:36]What would that look like?

[00:11:38]>> Well, for instance, if the United States were to uh exercise the threats that it has issued, such as taking out Iran's oil installation, starting to bomb the the capital again, that would definitely be a break of the with the pattern that we've seen in the last nine days. And that would prompt a retaliation from the Iranian side. Similarly, and if we start seeing the Iranians going after GCC oil infrastructure, then we're going to be in for a much much larger energy crisis than what we've seen so far.

[00:12:06]>> So, at this point, what is the reaction of other Middle Eastern countries?

[00:12:11]>> No, there's a tremendous amount of anger. Many of them are very angry at Iran because Iran continues to hit them and and the US bases or bases that the US uses on their territory. And as the US has gone after critical infrastructure in Iran, the Iranians have went after critical infrastructure in Kuwait for instance. Now of course these countries are deeply upset with Iran for targeting them. The Iranians believe that this is a tit because these countries are allowing their entire territory to be used by the US. Uh it is a terrible situation. We should never have gone into this war in the first place but also this second war. uh and it was quite clear because at least at this point the president should have had the benefit of uh looking in the rear view mi mirror and knowing that this would not lead to a better situation.

[00:12:58]Nevertheless, he still went down this path >> with gas prices rising in North America in the US. Do you think that American consumer sentiment will be a factor at this point for the American president?

[00:13:10]>> Well, it should be, but it appears that it is insufficiently. Uh, and I think perhaps the administration thought for reasons I don't understand that this could be over within two or three weeks.

[00:13:20]That does not appear to be the case. Um, the administration may have calculated that after a couple of days of bombings there would be a return to the table and the Iranians would be building to come.

[00:13:29]I suspect that they won't. I suspect that they are going to calculate that they're going to have to drag this out so that they're not in a situation in which whenever it's convenient to the United States, there return to military action. And whenever it's convenient to the United States to end those military actions, go back to the table, the Iranians would go along with that.

[00:13:49]Instead, I think they're going to drag this out to make sure that this is as costly as possible for the US before there is any further negotiations in order to significantly diminish, if not eliminate any temptation on the American side to go back to military action.

[00:14:04]>> What about the status of the Red Sea route, which Yemen's Houthies now say they will close? What is your take on what that fallout could look like?

[00:14:14]>> If that happens and if it happens in tandem in coordination with the Iranians, then we're talking about another 5 to6 million barrels a day that would be out. Uh uh the Saudis would either have to go north or not at all.

[00:14:28]And if they go north, they would significantly increase the cost of oil because much of that oil, if not most of it, is going towards Asian countries.

[00:14:39]And going through the Red Sea in and of itself was an additional cost compared to going through the Persian Gulf. But now they would have to go around all of Africa in order to be able to make it to the Asian market. So this will dramatically impact cost. It will reduce the amount of oil on the market. Um it will be one of those nightmare scenarios that in the first 38 days of this war we did not see. Thankfully we never went there but we may be going there right now.

[00:15:02]>> Is your take then that the price of oil will continue to be elevated perhaps go higher?

[00:15:09]>> I believe so. And I think contrary to what we saw in the 38 day war, the US's ability to manipulate or push down the oil prices by using strategic reserves and other uh measures including oral interventions in the market is going to be far more limited than what it was in the past. And as a result, not only will it likely go higher, it will likely go higher faster.

[00:15:30]>> All right, I do have to leave it there.

[00:15:31]Treaty is co-founder executive VP at the Quincy Institute for Responsible Statecraft. Thank you for joining us today.

[00:15:37]>> Thank you. Shares of LXB Industrials Trust are up. We'll tell you why when we come back.

[00:16:00]Brookfield Asset Management and CPP Investments are taking US-based LXB Industrials Trust private in an allcash deal valued at about $5.2 billion US.

[00:16:11]Joining us to talk about this and the industrial property market is Jonathan Peterson. He's managing director at Jeffre. Thanks for your time.

[00:16:18]>> Great. Thank you for having me. Happy to be here. What is Brookfield and TPP seeing in the industrial real estate market, do you think that other investors maybe aren't?

[00:16:27]>> Yeah, the the industrial reach sector overall has actually had a pretty solid year. Um, we're seeing a number of tailwinds in the market. I'd say one is onshoring of manufacturing which really if you go back to the the Biden infrastructure bills in the US has really kickstarted um a big investment uh in the US market that's showing up in advanced manufacturing solar panels you know EVs uh biio manufacturing all of those sort of things. The other thing that we've written about and talked about more recently and has shown up this year is demand from data center related supply chain. So not turning warehouses into data centers but this whole industry that is supplying construction of data centers needs warehouse capacity um to uh or sorry we need needs warehouse space to kind of store all this capacity that goes everywhere from the suppliers uh to the hyperscalers um as well too. So those are a lot of the interesting uh demand dynamics and so not not surprised to see a company like Brookfield come in and uh and do a take private of uh of one of the companies in in this uh in the sector >> and they have about well 100 plus properties I guess uh mostly sort of Midwest along the coast. Where are they?

[00:17:40]>> Yeah, this is the important part. So LXP is primarily Sunb Belt and Midwest markets. I think in the public markets, a lot of investors have gravitated towards wanting to be in the coastal markets, those global trade markets, the ones that really benefited from e-commerce. But these tailwinds that I talked about with onshoring and manufacturing and data center supply chain is really happening in the Midwest and Sunb Belt. And that's primarily where LXP is. Their top markets are places like Phoenix, Greenville, Spartanberg, uh Atlanta, Indianapolis, Memphis, Cincinnati, uh places like that. Okay. Uh what makes this a longer term uh asset for something like a pension fund? Because you mentioned uh there's onshoring which yes could be a longerterm play but will that AI sort of storage space be a longerterm play as well?

[00:18:30]>> Well that that is a great question. So one so what I'll say is over the past few years rent growth has been uh fairly steady um in these markets while some of the coastal markets have seen a a downdraft um in rents. leases tend to be five to 10 years on average. So, as we've seen this recovery in rents and LXP's markets, there is a longer tail uh to moving those rents to market. We actually estimate that LXP's portfolio relative to other industrial REITs has the widest spread between in place rents and where market rents uh should be. Uh and so that that in of itself should be a demand driver. You ask a really great question on the data center uh supply chain. I I I'm also a data center analyst. I'm a I'm a big believer in AI infrastructure being one of the biggest drivers in the market today and continuing for the next number of years.

[00:19:19]The impact it's having on this sector is relatively new. Uh but I'd say I lean towards thinking this is you know this could be a tailwind that does last for multiple years in the future similar to how e-commerce was you know basically the big demand driver for the last 10 years of this sector.

[00:19:35]>> Okay. So shareholders getting uh 6120 a share US uh premium of about what 4.6%.

[00:19:41]So, uh, are you seeing that as a fair price?

[00:19:45]>> Yeah, I mean, I I think the price is is relatively fair for what it is, you know. So, they trade about a six. So, this implies about a 6.1% cap rate. Uh, you know, at that price, it is only about a 5% premium to where they closed on Friday. To be fair, last I'm sure they negotiated this a number of weeks ago. Uh, the stock and and all the industrial reads had rallied pretty strong um last week. And so the the the premium versus the 30-day average is closer to uh to 12%. If you look across the whole industrial RE group, the average cap rate in that group is about 4 a.5%. So there's there's an argument that there's that there's upside to this valuation. Private markets do tend to pay higher cap rates, in other words, lower multiples uh to to be in LXP's markets, more of some of these secondary markets. Uh, but we do think there's opportunities for a potential competing bid to come in. I doubt it would be another public company uh that would be interested in LXP. I do think it would be more likely another private equity uh buyer. So, it'll be interesting to watch and you know see where that might go.

[00:20:51]>> You touched on this at the top of the discussion, but tell me a little bit more about what you're seeing in the REIT space generally or industrial REITs more uh specifically so far this year and what you foresee for the rest of the year.

[00:21:03]>> Yeah, sure. So um so yeah so the so for this year we we've seen a lot of this data center demand um which is which has really been driving things if you if you kind of back up over the past few years or maybe through the pandemic years. The pandemic drove a huge amount of e-commerce demand uh in in the economy overall. E-commerce drives a lot of warehouse demand because warehouses are the storefront for e-commerce. Um that drove up rents very substantially uh from let's say 2020 through 2022. we've kind of been in this uh we've kind of been on the other side of of that in markets particularly ones like Southern California have seen rents move down uh you know pretty substantially over the past few years. Uh so we we've kind of uh you the market has been retreating a bit and part of that is also a decent amount of over supply in the market. A lot of those things have kind of worked their way through. Uh supply new supply deliveries are uh you know falling to you know cycle lows uh this year. So we're starting to see rents recover um across the industrial sector overall. So the stocks have done uh have done fairly well this year. So it actually has been a pretty constructive backdrop. Uh and just to to kind of mention it one more time, I do think this like AI infrastructure data center uh demand really kind of came out of nowhere. um and has taken what was already going to be, I think, a more constructive year and really sort of pushed it um up to the next level.

[00:22:29]>> All right, Jonathan Peterson, got to leave it there. So, thanks for your time.

[00:22:32]>> Thank you.

[00:22:33]>> Up next, the closing bells on Bay Street and Wall Street.

[00:22:49]Here are the closing bells [music] for the end of the trading. day at the NASDAQ, Avalo Therapeutic ringing the bell. And for New York, it's Bank of Montreal and Rex ringing the bell. You're watching the Close on BNM Bloomberg. I'm Mela Fernandez. Here's how we ended the day on Bay Street and Wall Street.

[00:23:41]We're starting with oil right now, which uh was which did end the day higher. But here are the North American markets with the TSX down over 300 points or.9% almost a full percent down on the day.

[00:23:53]The S&P 500 not a material move. It's dropped 14 points today. The NASDAQ also a softer day. It's 12 points down.

[00:24:01]Let's get to the movers in Toronto.

[00:24:05]Starting here with Empire Co. which is up at 3.7% or $181 to 5076 as Stephanie Hughes has more on this one in just a moment. Moving to Arrow Copper, it is up over 4% today or $142 to 3531. It did have its recommendation raised by Bank of America to buy from neutral and BDESCO BBI to outperform from neutral.

[00:24:29]That was a few days ago.

[00:24:32]Vistla Silver also moving today 3.3% up or 14 cent gain per share to $442.

[00:24:41]In the flips on the flip side and in the red is Acon Group. It is down 6.6% or a loss of $3.54 a share.

[00:24:50]Fitting International also down today close to 4%. As Scotia Bank recently raised the price target to 118 from 114.

[00:24:59]The stock is down today. And the Turmont Industries also had its price target raised from CIBC recently to 240 from 215. Uh the stock's down today 3 and a4% or $7.66.

[00:25:13]Uh some of that enthusiasm may be waning today.

[00:25:17]Let's go to Bloomberg's equities reporter Stephanie Hugh. She joins us now to talk some more. All right, Stephanie. Empire, the grocery store chain. What moved that stock up?

[00:25:28]Yeah, that's right, Mela. Uh, so Empire sh uh those shares gained by nearly 5% at their highest point today and it's been its biggest intraday move higher since March and as you mentioned um before throwing to me it that made it one of the top performers on the TSX for um the entire trading day today. In fact, it took the top place for a good chunk of the trading session earlier in the session. Didn't quite I don't believe it held that uh position till the day's end, but uh that's okay. it was still outperforming the broader market for most of the day. And sorry, that's because of uh that's thanks to the Beimo Capital Markets team reinstating coverage on the grocery store operator to a market outperform rating uh from a perform just a market sorry outperform rating from a market perform rating uh from before when they suspended coverage. So that's the equivalent of moving it to a buy from a hold. And the analyst uh Tammy Chen, who's now taking over that coverage, said she believes Empire is starting from a lower or is coming from a lower starting point in several areas like Discount Grocery and Pharmacy. Uh and that's compared to some of its other grocery store operators uh operating peers like Lola and Metro. So Chen also added that the CEO Pierre St. Lauron has really expressed that he's focused on catching up in these segments. So that's uh sounds like music to her ears. She's really encouraged by that. Uh and she also said that even incremental improvements uh to capture the lowhanging fruit opportunities should yield uh good growth over the next few years and really close that valuation gap. Empire has more for its part has more or less stayed steady over um a year-to-ate basis and a one-year basis.

[00:27:08]Um hasn't really made any major swings on the upside or downside. Um you know under 10% moves in both those uh timelines. And I should also add it's actually been doing pretty well compared to its peers from a uh share price perspective. It's been keeping pace with Lola uh with a 7% gain so far this year last time I checked this morning. And it was actually Metro that was more of a lagard. I was kind of expecting to see maybe with um these comments about it starting from a lower uh starting point uh with some of these segments that maybe Empire would be on the the back foot there. but looks like it's um it it's got more room to run and according to Beimo and it's still kind of holding its own so far this year. So, looks like a good showing for uh Empire Mela.

[00:27:52]>> All right, Bloomberg Stephanie Hughes in Toronto. Thanks for that. Let's go to move her south of the border. Bloomberg senior equities reporter Bailey Lipshel's joining us there. Uh Bailey AMC reporting some big theater numbers, but they also included the premier of Odyssey in this I guess as well.

[00:28:09]Yeah, it was a big uh kind of win-win for AMC, the best day in a number of years. Obviously, this is one of the kind of core meme stocks from that 2020 2021 craze. But we did see a double-digit move after earnings beat expectations in the second quarter, and the company was able to talk up the demand that they saw for movie goers going to see Christopher Nolan's The Odyssey over the weekend. It was a really strong start for the film.

[00:28:32]obviously kind of leaning into and trying to recuperate some of what has been a slower start uh to the summer movie season. But as you can see, a big move uh today for the company up 26 27% if you round up, but still again below where it was this time last year. And if you step back and look at where it was back back in 20 and 2021, really a shell of itself. But when you look at some of the comments management made uh addressing their balance sheet, the fact that they don't have any uh debt maturing in the next four years and trying to get the fundamental story kind of back in a position that can get investors at least from the equity side of things excited.

[00:29:07]>> Okay, let's get to Archer Aviation up double digits today as well. What led to that?

[00:29:13]>> Yeah, this is a company that announced a partnership with Andero which is seen as one of the pre-minent private companies here in the US. This is for a military uh votal which is vertical takeoff and landing vehicle. So according to analysts kind of potentially trying to lean into the military uh Anderil has partnerships with the US government. So some bullish an analysts on Wall Street saying that this could be a signal that this partnership with the military craft or the partnership with Andrew excuse me could potentially lead to a partnership with the US government. As you can see 20% move higher. Again this is a smaller company. It went public via spa some time ago. It's another company that's relatively heavily shorted. So about almost 20% of shares currently sold short. But it does seem like at least the bulls on Wall Street kind of stepping back and thinking that this could be an opportunity for the company to lean into aside from its consumer business which it's been trying to really ramp up and and has fallen behind some of those competitors. So certainly a big step forward at least if you're looking at optionality as it relates to Archer Aviation. But again 20% move to the upside gets you back to 532. still nowhere near where it had been a little while ago.

[00:30:20]>> Okay. Tempest AI acquiring Personalis.

[00:30:22]Tell me about the deal.

[00:30:25]>> Yeah, Tempest AI is a company that develops drugs or at least decides drugs and helps screen out uh drugs.

[00:30:31]Personalis is a company that operates in the cancer diagnostic space. So, this had been kind of in the works. It did seem we did see some uh reporting from a number of financial media, but as you can see, Tempest falling down 7% today.

[00:30:43]This is an all stock deal, $1.7 billion on Personales. It does have a pretty uh hefty stake in the company already north of 15%. So, this would be to acquire the remaining outstanding shares of Personalis. Again, it could be a bit of uh Wall Street ARBs trying to game out the company's deal just again because you would short Tempest and buy Personnelis, but we did see some push back at least from sellside analysts warning about regulatory uncertainty.

[00:31:07]So, that's kind of why Personalis itself is trading at a wider spread. So, it could be a case when you talk to some investors of investors being a little bit jittery where it could be management from Tempest taking their eye off the ball trying to get this deal uh through all the regulatory hurdles. So, it'll be something to certainly keep an eye on as it continues to uh march towards a potential close later this year or according release early next year.

[00:31:29]>> All right, Bloomberg's Bailey Lipshells with the latest out of the US. Thanks for that. Up next, chip stocks rebounding today helping the US market a little bit. We're back in a moment.

[00:31:40]>> [music] [music] >> With big tech earnings kicking off this week, a rebound from chip stocks helping the markets out today. For more with his outlook for the market and stock ideas, let's go to David Deetsz. He's chief investment strategist at Deetsz Wealth Management Group. David, thanks for joining us today.

[00:32:14]>> Thank you so much, Moretta. Good to be with you.

[00:32:16]>> Markets seem to take any signal that the Middle East conflict is ending and then amplify it. Why are investors so easily persuaded given that this conflict has now been going on since February?

[00:32:28]>> Yeah, I think investors are focusing on as to, you know, Washington and Trump's behavior throughout this conflict. I think they know at this point that he has no interest in having a prolonged war. The American people don't want that. He's facing midterm elections come November. And of course, there's a big red line to ever put US troops on the ground. So, I think they know that despite, for example, recently nine days of strikes against Iran, there's no appetite really to push this into a much more severe conflict. Uh and of course we heard some good news that despite the nine days of bombings by uh the United States uh that representatives of Iran are interested in getting back to the table for a diplomatic solution. I think what I've been telling clients and so forth is to look at that oil price. We saw in the beginning of the conflict it soar to well above $120 a barrel. Right now we're I believe in the 80s depending on which oil index you look at. I don't think that there's any belief that that oil is going to soar back up there on the on the idea that there's going to be uh a wider regional conflation. So investors are I think ultimately confident that this too shall pass.

[00:33:40]>> Yeah. 83 is West Texas Intermediate uh spot for today so far. Okay, let's get to uh the earnings uh that are coming out this week. We've seen chip stocks rallying, but they really have been volatile for the past little while. what are you looking for in earnings and what do you think the longerterm prospects are in the space?

[00:34:00]>> Yeah, so I mean you know earning season have started out coming up all roses with the big banks um having record profits and basically extolling the health of the US economy. Of course, we were mindful of Jamie Diamond, chairman of JP Morgan, saying, you know, for every flow, there's an EB and there are tectonic shifts below uh the surface here involving the ever growing federal budget deficit and the inflationary tendencies in the economy. Nevertheless, that was just really the first course.

[00:34:32]Uh the main course of course is going to be these tech earnings which are going to start this week and continue next week. Of course, Nvidia doesn't report till late August, and we could be seeing well, analysts are expecting up to 70% year-over-year earnings growth in in a number of names. So, expectations are very heady, we think they are going to come in very strong. But the fact of the matter is when your expectations are so high, um, we have seen that it's awful hard to keep the street happy. I think some of that now has already been foreshadowed because we've seen for example a leading um semiconductor ETF the Van E1 pull back close to 20% about 18% since middle June with investors I think now secondguing as to exactly whether the uh blowout earnings and whether the [clears throat] extent that they surpass expectations are going to be enough to uh fulfill uh you know a rise in uh these chip stocks which are now the AI darlings they're still up double over a year ago even despite that 20% pullback which means I think that investors need to keep their seat belts fashion for any sense that it's just merely business as usual and not enough to keep that uh keep those chip stocks going.

[00:35:51]>> Okay. So your stock picks are from seclers that reflect the pessimism that's out there right now. How does Accenture fit in?

[00:35:58]So you know what was interesting is that we found in the late 1990s that for every bubble there can be an anti-bubble. I think that's what we have with the whole software sector particularly the ones that are allegedly maybe blown apart by AI. And so to the extent that we've seen a bubble in some of the chip stocks uh and the AI data centers the hyperscalers in companies like Accenture which basically does IT data consulting there's the anti-bubble.

[00:36:28]Now, this is a stock that was close to $300 a share as recently as January and now it's trading about 140, but I've seen no real slowdown in their business.

[00:36:40]In fact, if you look at the orders coming from their biggest companies, it's still showing a 13% year-over-year growth. But you've got a very cheap stock for something that can grow perhaps double digits at least on the bottom line. You've got a stock that's um has about a 4 and a.5% dividend. that dividend has grown 13% per year over the last five years. You've got a stock that has no net debt. In fact, it's close to 7% of their market cap is really cash.

[00:37:08]Okay. Um and at the end of the day, when people are starting to think about it's like we need the data consultants to teach companies and others how to incorporate AI into the business. You can't just push a button and AI dramatically reform your business. I believe you need the consultants from from Accenture and this is a great entry point because the sell-off is so not welld deserved.

[00:37:32]>> Okay, let's get to Constellation Brands which relies uh on US consumer sentiment but what is your take on how consumers are doing right now?

[00:37:39]>> Um so obviously they're very sensitive to energy particularly at the lower uh lower income levels. Uh there was a nice pullback in gasoline prices in June.

[00:37:49]They started to creep higher. We're now over $4 a gallon here. Uh but at the end of the day we believe that constellation as the largest beer distributor in the country with some of two of the key brands that would be Corona that would be Modello. I attended a watch party here yesterday for soccer. They ran out of Modello. I mean it's the fave of the uh the fans for the soccer. So the point is that they're gaining market share.

[00:38:15]They are well situated with some of the top brands. But at this point, what I like is that since about April, the stock has gone from about 170 down to about 134. I don't understand why that sell-off is deserved. I get the stuff that get the idea that there's other choices besides beer out there, but it hasn't changed that radically so quickly. You're now trading at about 12 times earnings with again a 3% plus dividend with I believe the market leader, the innovator uh with the top brands. I say this is a good entry point for consumer staple uh like constellation brands particularly if you're a little queasy on the runup in the tech stocks.

[00:38:54]>> All right, got to leave it there. David, I appreciate your time. Thanks for joining us.

[00:38:57]>> Thank you.

[00:38:58]>> Coming up in June, Canada's core inflation fell below 2% for the first time in nearly six years. More in just a moment. [music] Inflation [music] slowed more than expected last month, driven by a drop in gas prices. Core inflation dropped below 2% for the first time in six years. To break down the data, we're joined by Robert Capsik, senior economist, Bumo Capital Markets.

[00:39:36]There are a lot of factors on the surface driving inflation that we that we see every day in the headlines, whether it's food inflation or the, you know, the big spike and then retreat in gas prices. But underlying that, um, it's pretty clear that the Canadian economy has come off, you know, a 12 16-month period of of underperformance relative to potential, that there's some slack in the Canadian economy, and that underlying core inflation pressure is just relatively mellow. So when we look through all of the noise, um it does suggest that the Bank of Canada probably is, you know, pretty comfortable here with where inflation is.

[00:40:09]>> Inflation data though, it did come in slightly lower than what economists were expecting. What's behind that discrepancy, do you think?

[00:40:16]>> Uh so beyond just underlying softness across, you know, pretty wide spectrum, um the the June number obviously was impacted by the pullback in oil prices, right? So the market responding to the to the, you know, at the time ceasefire between US and Iran. um that that pulled headline inflation down. Of course, the flip side is that we get the July numbers, we're probably going to see gas prices um pop back up. So, that was that was really the easy the headline grabbing factor in June. And then beyond that, I mean, we see service inflation kind of mellowing down, inflation across the spectrum of of housing in particular, relatively soft. Things like rents and mortgage interest costs continue to kind of apply broader disinflationary pressure on the Canadian economy. Uh does this latest inflation data tell us anything about whether if there's inflationary effects from the war in Iran that are spreading to other sectors as well or or not yet?

[00:41:09]>> Um no not not yet. The short answer is is not yet. Uh you see it in in headline gas prices moving around obviously but the bigger concern like as you say is whether or not that's spreading across the economy and that's something the Bank of Canada has a pretty close eye on. Um and the answer is is really no at this point. And and one thing we look at is is is just how how kind of broad the inflation pressure is across the basket of goods in Canada. Whether we look at, you know, 150 categories across the whole spectrum or if we look at, you know, 40 or 50 really core inflation categories. Um for the most part, the kind of the distribution of inflation across the spectrum is is relatively normal. you know, you probably have about a third that are above 3%. You have a third that are, you know, below 1% and then you probably have a third that are kind of converging in that 1 to 3% range where the Bank of Canada wants it. So, um, it doesn't look like it at this point and and it does take time for for these shocks to filter through, but where we're sitting today, we're we're just not seeing a whole lot of concern on that front.

[00:42:09]>> And as you mentioned, like gasoline prices fell by 10% month over month. Um but do you expect gas prices to maybe rebound now that we've seen hostilities flare up once again in the straight of horm?

[00:42:22]>> Yeah, almost certainly when we get the July numbers, we're going to see gas prices bounce back up. So that's going to you potentially lift that headline rate uh you know again back closer to 3%. But, you know, again, this is something that we're going to going to look through, probably something the Bank of Canada is going to look through and unless there's evidence that that particular component of inflation is broadening. And, you know, as as we said to this point, there's really not a whole lot. So, um, probably putting more focus when we're thinking about where policy is going or what underlying inflation is in Canada, we're putting a lot more focus on the core measures, especially at a time like this when when something like gas prices is moving around so volatile.

[00:43:02]>> And obviously now like the like the core is now below the Bank of Canada's 2% target rate. So, I wonder what does that tell you? How do you expect this to factor into the Bank of Canada's next rate decision?

[00:43:13]>> Yeah. So what's interesting, you look across, you know, four or five different measures of core inflation that the Bank of Canada focuses on and and almost all of them are below 2% from a year ago. Um we we tend to look a lot as well at what's happening over the last three or six months to kind of give us indication of where momentum is going and kind of ask okay well great core inflation is sub 2% from a year ago but what about the last three or six months given what we're seeing um globally and and still there core inflation is you know bouncing right around that 2% mark on a three and six month annualized basis. So um from that perspective again it just kind of gives the Bank of Canada more evidence that there is some slack in the economy uh and that they probably are comfortable here at you know two and a quarter holding rates at the lower end of what they consider neutral and and probably the most important takeaway here for markets as as we've argued for the last you know six months or so is that there's not really a very compelling case for the Bank of Canada to be raising rates this year and we've already seen a lot of that pricing kind of scrubbed out of the market for for later in 2026.

[00:44:18]>> I wonder was there anything else in the report that surprised you? Like we saw grocery price inflation drop since May?

[00:44:24]Uh anything else that really stood out to you as something you weren't really expecting to see?

[00:44:28]>> No. Yeah, grocery price inflation is an important one, too, because there's a little bit more stubbornness there than you would probably see in something like oil prices. And and look, let's face it, Canadians go out and buy food every couple days or every week. And that does kind of anchor into inflation expectations, right? if they see persistent grocery price inflation. But um the fact that we've stabilized on that front is probably encouraging. It's not great news. We're still seeing, you know, almost 4% grocery price inflation.

[00:44:55]So it's not great, but we've seen some stability. Um the other thing that we kind of saw in June, just given what was happening with the World Cup, obviously in Toronto, Vancouver, we saw some upward pressure on hotel prices. We saw some upward pressure on like spectator ticket prices, but that's all makes for a good headline. But it's all temporary.

[00:45:11]It's all going to kind of go away as we get into the July and August numbers, >> right? Because I wonder like also there's the tariff uncertainty that's obviously still in the backdrop here. Uh what's your base case for CPI for the rest of the year, maybe into the second half of the year? Uh do you see reaceleration risk at all in the second half of the year?

[00:45:28]>> No. So we're probably through the worst of it now with with oil prices off the high again. Like July might be a little bit of a hiccup in in that, assuming pump prices for the month do do edge up again, which which it looks like they will. Um, but as we go through the second half of the year, just given our base case for oil prices, we're probably going to see that headline cool down to probably the mid 2% range. And as kind of an anchor, if you look at where core price pressure is in the Canadian economy around 2%, we should eventually gravitate back towards those levels as we get into 2026 for headline overall.

[00:45:59]>> And then just lastly, like what does this mean for the Canadian typical Canadian household? Like do you think Canadians are really going to be feeling any relief or or seeing any relief after we see these numbers today? like is that actually translating into households and spending?

[00:46:13]>> Well, so so this is where it gets a bit difficult for consumer psychology, right? Because we can say as an example, um, great grocery price inflation has leveled off. It's below 4%. Fine. That's probably good news at the margin. But if you're a typical Canadian household going out there and doing your grocery run every week, um, your bag of groceries isn't getting any cheaper. uh the the rate at which that grocery bag is getting more expensive has has has slowed down and leveled off. Um but it certainly doesn't feel like a whole lot of relief when you're walking out of the grocery store. So from an inflation expectations perspective out there in the economy at the household level, which ultimately is what drives this, um, one reason why the Bank of Canada probably is a little bit hesitant to get even more doubbish on numbers like this is that they know that those expectations are still kind of out there in the economy and they really don't want to let them root um, and then have to turn around and go through a whole, you know, type of uh, inflation battle that we just kind of went through over the last three or four years.

[00:47:16]Robert Cassich is senior economist Beimo Capital Markets. Up next, Paramount Sky Dance's proposed acquisition of Warner Brothers Discovery [music] hits a snag.

[00:47:25]Back in a moment.

[00:47:33][music] Here are the stories we are following today. Mediators have put forward proposals to help ease hostilities [music] between the US and Iran. The two countries have engaged in renewed fighting for 9 days over control of the straight of her moves. [music] Qatar and Pakistan are the main intermediaries in the conflict. One proposal is for a [music] 10-day ceasefire to find ways to revive the previous peace deal. There is no indication of a return to [music] formal talks.

[00:48:08]Cadillac Mines Corporation aiming to raise $363 [music] million in an initial public offering.

[00:48:14]The Toronto-based mineral exploration company is offering 50.2 [music] million shares at $6.90 a piece. The shares are expected to trade on the Toronto Stock Exchange [music] under the symbol TY.

[00:48:28]Cadillac will not trade in the US.

[00:48:32]Ford Motor Company Unifor ratifying a new [music] three-year agreement. The new contract includes a 9% wage increase for hourly workers over a [music] three-year span and a ratification bonus for eligible employees. The collective agreement [music] also includes a new $700 million investment at its Essex [music] engine plant which is in Windsor, Ontario. Ford CEO says the agreement is about investing in [music] people and Canada's future.

[00:49:02]Paramount Sky Dance's takeover of Warner Brothers Discovery hit a roadblock today. Uh, US judges put a pause on the merger. My next guest argues that the best outcome for Hollywood would be if the deal doesn't happen. Let's go to Ross Gerber. He's president CEO Gerber Kawasaki Wealth and Investment Management. Ross, what's your argument based on? Too much concentrated power?

[00:49:24]uh it's not less about power and I think it's more about just how would I say just bad management. I I just don't think that merging these two companies and taking these different properties that all have different management and then putting them together in one company with an inexperienced manager will ultimately lead to worse off results because they're paying such a high price for Warner Brothers that the debt, you know, payments alone will cause such financial stress that they're going to end up having to lay off people. They're going to have to do a lot of things to get this business to work and all of it is ultimately bad for the people who work in Hollywood.

[00:50:02]>> Okay. So, obviously Paramount Scott would have to explain to regular regulators why they don't see this as a monopoly kind of deal or anti-competitive anyway. What kind of argument are they making?

[00:50:14]Well, I I think it is hard to argue that it's sort of like anti-competitive from a global entertainment perspective because there's just absolutely like so much competition in the entertainment industry from so many players. What they're really focused on is in the actual like filmed moviegoing experience that Warner Brothers merging with Paramount would control about 25% of the actual theater experience. and and and I don't know if that argument is is a good enough argument because there's so many other players that could come into the theater business at any time. But I think what it's really about ultimately is there's a lot of politics involved with all of this and and part of this is about CNN and part of this is about you know what are the plans for these studios after the you know fact and so I think in general Hollywood doesn't like the deal um investors don't like the deal um pretty much the only one who likes this deal is Ellison >> okay so let's talk about the American states 12 of them which are are suing on the argument that uh it would be a monopoly as you mentioned some of the numbers they would control 25% of sort of what goes in into the theaters do you do you see that then as a feasible argument if you talk about sort of a worldwide entity >> you know once again I think it's a weak argument I I think that the entertainment business is so competitive and so difficult today I've been an investor in the entertainment business my whole career and and you look at the stock prices even Netflix is struggling at the moment and you know they're the king of the entertainment industry indry. So when you actually look at the industry, this merger will not create practices that would be anti-competitive. I think it this merger would create a loss to the industry that doesn't need to happen. And and that's really where I I feel the issue lies. So I think that these cases will lose. I I don't think that they're they're strong arguments that that this is a monopoly power that they're gaining. I think they're two weaker companies merging together to make one big weak company that ultimately loses jobs and makes less good movies and has less results and and and so the deal shouldn't happen because it's just a bad deal. But the fact that regulators are now making it harder for this to happen is even more proof that this deal is just it's like a triple albatross around the Ellison's neck and and Warner Brothers has never made anybody any money ever except the original people who started it. So, I I still this this whole thing just doesn't make a lot of sense to me other than when you get into the politics and the power and all the elements of trying to convert the media to be more of what the right-wing wants. And and that's where I I think all this comes to head is it's all around politics. And so from an anti-competitive practice, I I don't think there's a case here.

[00:53:02]>> That being said, how much of a hiccup do you think this could be uh for Paramount? I know the judges put a temporary pause on of only 14 days. Do you see that being extended as they discuss some of the issues you're talking about?

[00:53:14]>> You know, ultimately I think that this will be reversed because as I said, it's a really tough argument to make that somehow these two weak companies are have some sort of monopoly power in an industry that's essentially struggling with some major competitors. Like how about Apple is putting, you know, movies in theaters and they could they could just decide tomorrow to release 10 more movies in theaters to compete. So it I mean a two-bit lawyer could get them out of this, you know. So I I I think this is just more pain and struggling that is involved with this deal because it's not just not a good deal and this is part of the pain and struggling to get this done. But Ellison seems, you know, no matter what to want to do this because after all, what would the kid do anyways if he wasn't making movies? So So his dad wants him to have a job. [laughter] >> We'll leave it there, Ross Gerber.

[00:54:04]Thanks for your time. Appreciate it.

[00:54:07]Thank you.

[00:54:08]>> Coming up, Andy Burnham, the new prime minister for the United Kingdom. More in a moment.

[00:54:15][music] [music] Andy Burnham is the new UK prime minister, the seventh in a decade. We spoke with Thomas Burns about this distinguished fellow at the Center for International Governance Innovation.

[00:54:44]>> Most governments, they come in hoping to do a lot but find that circumstances constrain them. I think markets and and we're seeing that markets are giving him a a positive sign but bond markets uh will really determine how much room he has. I think there will be some flexibility if he follows a disciplined approach. [snorts] um markets will support a disciplined approach that brings stability that that brings transparency uh and enhances productivity. Uh if he cannot show that he's enhancing productivity, if he's simply postponing uh hard decisions, then markets will react against it. So he's got um he's got a little bit of time to really define his priorities. He's got a lot of priorities. He's going to have to focus in on what's really possible.

[00:55:41]>> You say market support stability. That's somewhat difficult to do for any leader right now. Uh particularly any other country that has to deal with the US and Donald Trump. And I wonder how much of a test that will be seeing Burnham's relationship with US President Donald Trump who has called Burnham extremely liberal and a quote mayor of a town.

[00:56:00]Like what do we know so far about that relationship?

[00:56:04]Well, it's a challenge facing every international leader these days, how to manage uh Donald Trump, but I think Vernon will be no exception to that. I think he will probably follow a a pragmatic cooperative approach.

[00:56:19]Cooperative where it's in the interests of both countries to uh to move ahead.

[00:56:26]Um, and where it's not, then I think we'll see what others do, which is is quiet disagreement and and to try and avoid turning it into a a political football. It's a challenge, but um uh that's the way ahead, but you know, it's interesting. It's a sim similar challenge which we face in Canada and and the UK and Canada.

[00:56:50]>> Well, our circumstances are quite different. We both face a similar strategic challenge. The UK trying to redefine their relationship with the European Union and which they left because of Brexit and Canada not having left the United States but uh uh but having to redefine our relationship with a more transactional and a more unpredictable United States. Mhm.

[00:57:17]>> And so for both of us, it's a question of of where we can cooperate where possible, but how we can diversify our relationships um and and minimize risk in that sense.

[00:57:31]>> Well, with those two things in mind, like as you say, Britain and Canada's economic challenges are starting to resemble each other as you just pointed out, like what does that mean for cooperation between two kind of middle powers?

[00:57:43]Well, I think it means that that we can identify areas where uh we can uh cooperate in in in terms of investment in in terms of AI in in in terms of defense industries. Uh there are a number of areas where I think there are opportunity windows of opportunity um and and we need to explore those. Going back to Andy Burnham, he had said he will use flexibility within the UK's existing fiscal rules to fund his next budget. What do you think of that comment and and what exactly are you going to be watching for, particularly in the first couple weeks or months uh as he begins his role as prime minister?

[00:58:27]>> Well, flexibility is a word that uh that most uh leaders and finance ministers use. When I was with the Department of Finance, we used that as well. And I think markets don't fear flexibility. Uh they fear unpredictability. And I think the question is and what he will have to address is how is flexibility applied? You can apply flexibility to make uh productivity improving investments uh in a number of areas. You can have flexibility to address shocks like the oil price shock which the world is currently going through or you can have flexibility to uh not make tough decisions and postpone the day and I think depending which way he goes is it will markets will define their reaction.

[00:59:23]I think his challenge is uh he has a lot of of ambitions and he's a very fiscally constrained leader and so he's he can't do everything. He's going to have to narrow that down. So markets I think over the next uh few days and weeks will watch very carefully. Does he show the necessary discipline to to go along with flexibility?

[00:59:48]>> And obviously uh Andy Bernham has said he wants to put an end to political instability in the UK. Um what do you think he needs to do to maintains Britain's to maintain Britain's confidence kind of long term and actually put an end to the instability we've been seeing for about a decade now?

[01:00:05]Well, as you say, I mean, seven leaders in a decade is a great deal of instability. I think he's uh he has to show that this is not just a continuation of the previous government. And I think again it's it's very similar to the what we've seen in Canada with Prime Minister Carney that uh his challenge was to show that he was a different leader of the Liberal Party and was going to be a different prime minister. I I think Burnham faces the same challenge. He can't just be seen as a continuation of of uh stammer. He's got to show that he is indeed a new leader, that he's got a new plan, that he's going to be very disciplined in in in developing it and rolling it out. And I think that will be the key. Can he >> can he identify the differences uh fairly quickly? uh as you know he's made a big point of of devolving powers to the regions >> right >> the UK is a highly centralized country um if he does that in a way that transfers not just responsibility but resources and accountability uh he can make a big impact if it's just now your problem throwing tossing the football then I think that will just further exasperate the population.

[01:01:31]>> Thomas Burns is with the Center for International Governance Innovation. Up next, the billionaires after a piece of the past. A look at bids for dinosaur bones. Back in a moment.

[01:01:44][music] >> [music] >> Dinosaur fossils have become a high-end collectibles market with auction prices reaching tens of millions of dollars.

[01:02:01]The attempted sale of Shen, a rare T-Rex planned for auction at Christies, shows how questions around original bone, replica casts, and disclosure are testing a market where value can depend on what is real, what is reconstructed, and who gets to decide. Bloomberg's Originals takes a closer look.

[01:02:19]>> Shun was a T-Rex that the auction house Christy's [music] announced in 2022 and it was going to be the first T-Rex ever to go on sale in Asia. This was poised to be a major sale. Shen's auction never went forward. About 10 days before the scheduled [music] auction date, Christy's pulled the sale.

[01:02:38]Dinosaur bones have absolutely become an asset class in recent years. This wasn't always the case. About 20 or so years ago, dinosaur bones were more of a novelty. Recently, they've taken on a whole new kind of cache in the investing world. They've basically become a collectible. Auction houses are interested, collectors are interested, brokers have emerged, but this market of dinosaur fossils really is a wild [music] west of a market. There's no oversight body that's really overseeing what's real versus what's not.

[01:03:10]Interestingly, [music] the dinosaur bones you're likely to come in contact with at museums are sometimes partly, sometimes mostly fake. On average, 30 to 60% of that dinosaur specimen is real, meaning real fossilized bones, and [music] the rest are made up of cast parts or sculpted replica or some other kind of what we would call fake bone. In a museum, that kind of reconstruction can be expected. [music] But in a multi-million dollar auction, the amount of original fossil bone can affect how a specimen is valued. Christies is auctioning T-Rex bones as a way to diversify their [music] business.

[01:03:45]They're looking to reach new audiences and collectors and buyers who might not really have [music] an interest in fine art or contemporary sculptures, but can't deny the appeal of a T-Rex specimen. [music] The T-Rex market hit a new record in 2026 when an unknown buyer paid >> [music] >> $50.1 million for a T-Rex named Gus.

[01:04:05]Before that, a T-Rex named [music] Stan sold for $31.8 million at auction in 2020. There are fewer than 50 known [music] T-Rex specimens in the world.

[01:04:17]So, the sudden appearance of Shen out of the blue seeming was a little fishy to a lot of people in the paleontology community, which is small. People know each other. They know the specimens.

[01:04:27][music] They know what's coming to market. So, this raised some eyebrows, including Pascal Goodwa, who was a paleontologist in Brussels with a more than 30-year career and is an expert in the Cretaceous period. He found this unusual that Shen was [music] suddenly up for sale with a very high completion ratio. This roughly more [music] than half% complete T-Rex suddenly coming to market just raised some questions for him. Another person who was paying [music] attention to the Christy's auction of Shen was Peter Larson. Peter Larson is a commercial paleontologist and he's sort of a famous figure in the paleontology world. He is a T-Rex expert and he actually led the team [music] that excavated Stan. Larson is a controversial figure. In the 1990s, he served 18 months in federal prison for customs violations related to a fossil discovery. Now, when he saw the announcement, [music] he just instantly felt this jolt of recognition. He knew Shen, or at least he knew Shen's skull.

[01:05:28]When he discovered Stan, he made cast copies of all of Stan's bones. And that's a big part of his business is selling these cast copies. Can sell them to museums, can sell them to private collectors. Basically, he sells these bones so that somebody can have a copy of Stan. That's a bone by bone reconstruction without actually [music] having the real bones of Stan.

[01:05:51]Ultimately, Christies did pull Shen from auction. In a statement, Christy said that when questions are raised about a lot that it cannot answer in a timely fashion. The auction house withdraws the lot for further research. Today, fossils fall under import export laws, so they're subject to that just [music] like antiquities are. There's not a lot of regulation or rules or accepted [music] definitions of what's appropriate and what's not. When it comes to assembling dinosaur specimens, you need experts like preparators to put them together, but there's no formal schooling or [music] official accreditation when it comes to constructing dinosaur specimens or conveying what they are. So, the industry as a whole is trying to sort of feel their way through the ethics of this. The fossil market is here whether we like it or not. [music] And now it's up to the collectors and the scientists to work towards the goal of protecting these fossilized [music] remains.

[01:06:50]Humanity's prehistoric heirlooms.

[01:06:57]Some people in St. John's believe the city is a perfect spot to be Canada's defense hub as military spending set to increase. CTV's Garrett Barry is more.

[01:07:07]For generations, sailors have battled through the elements, the rain, ice, and fog for safe travel into the port in St. John's. Centuries of hardened knowledge now a key part of a pitch from business groups in this province for more consideration for defense spending from Ottawa.

[01:07:26]>> We've probably never been more relevant than we are in this moment. We're at the front of the continent. Our neighbors are is Europe. our neighbors as Greenland.

[01:07:37]>> In this new campaign, Newfoundland and Labrador says it is ready at the edge.

[01:07:42]That easy access sets the province apart. So does years of experience that the potential defense contractors here have on the water.

[01:07:51]>> They found their way into the defense sector because of the capabilities they've built in either oil and gas or in in fishing or in the marine environment. Prime Minister Mark Carney has promised NATO Ottawa will spend 5% of the country's GDP on military and defense spending in a decade's time.

[01:08:11]That will amount to almost $ 160 billion each year. And this week at the Maritime and Arctic Security Conference held in St. John's, potential contractors looked to meet with military members to make first contact. In order to overcome those hazards of the ocean, businesses here invested in new technologies.

[01:08:32]Technologies that advocates say could now find a second life in military or security applications like satellitebased iceberg tracking at Seor in St. John's.

[01:08:43]>> We flipped that on its head. So, we got really good at finding icebergs and if you flip that around, you can get really good at finding ships in iced waters.

[01:08:52]The company has signed deals with the Canadian Space Agency and the Department of National Defense before, but they, like others, are now looking to position themselves as the best possible partners as Ottawa rolls out a massive spending plan over the next decade. Garrett Barry, CTV News, St. John's. That does it for the close. Thanks for joining us today. [music] We'll see you back here again tomorrow.