January 15, 2025
The markets: The S&P 500 ticked up to 5,842.91 last night. Bitcoin went over $97,000 again — it is up nearly 4% YTD. Asia and Europe markets were quiet this morning. U.S. futures are up moderately at $5,890.50 this morning. The drama in the bond markets continues.
Today: Israel and Hamas have reached a peace deal but Hamas is refusing to sign off on the final document, according to the WSJ. It is not clear why the Palestinians are holding out.
CEO Daily insight: Lululemon’s Calvin McDonald wants Canadians to dream bigger
Lululemon Athletica CEO Calvin McDonald is in good shape right now, with double-digit earnings, popular new products, ambitious growth plans and a Whoop fitness tracker that helps him stay fit and well-rested. But one thing that bothers the Canadian CEO of this Canadian success story is, well, Canada.
“I’m a proud Canadian. It’s an incredible country,” the apparel retailer told me and my colleague Phil Wahba—both Canadians—yesterday. He thinks we “need to create a vision and inspiration for the country that challenges Canadians to think bigger, to dream bigger, and to create and innovate more than we’re doing as a nation today.”
Forget all that 51st state stuff. [Here’s Don Tapscott’s take on Trump’s ‘offer.’] McDonald’s advice is to “look for ways in which innovation and entrepreneurship is setting a vision of what can be, and really encourage Canadians. And it has to start with the youth. It has to start through our academics and academia and it has to start with regulations and taxes and incentives.”
“They increased the capital gains tax [to where] you’re being taxed almost as much as income now as on investment in the country,” McDonald said. “It makes no sense to me.”
It made no sense to RBC CEO Dave McKay when I spoke with him a few months ago. “We’re definitely on the wrong path,” the head of Canada’s largest bank said at the time, arguing that Canada needs to adopt a more competitive tax structure and tighter ties to the U.S. He noted that a “very senior” leader had earlier told a group of Canadian CEOs “you’re not serious people” because their country was out of sync with its largest trading partner.
If so, what better place for Mark Carney, the man whose prudent policies as Bank of Canada Governor helped Canada emerge from the 2008 financial crisis in enviable shape, to announce his potential bid to replace Prime Minister Justin Trudeau than on The Daily Show on Comedy Central?
“We’ve got an economic crisis because of what Mr. Trump is about to do, or saying he is about to do. We also have challenges in housing, the cost of living,” he told host Jon Stewart. “We need to get the economy moving.”
And what about joining with its high-fiving neighbor to the south? “We find you very attractive, but we’re not moving in with you. It’s not you, it’s us,” Carney told the comedian, instead suggesting the two countries “be friends with benefits.”
Those who wonder about what the country’s political leadership might look like next should also check out the policies of Conservative leader Pierre Poilievre.
Also on the radar
President-elect Trump’s team thinks it will collect about $500 million from political donors even though he cannot run again. The money will be used as a warchest to favor candidates Trump likes.
Disinformation, extreme weather events, and armed conflict are the biggest risks facing the world according to a survey of 3,000 leaders by the World Economic Forum. Its A-list Davos event kicks off on Monday. Fortune will be there — drop by and say hello!
Greenland is ready for “cooperation” with Trump, prime minister Mute B. Egede says. Remember: cooperation is not the same thing as being owned by the U.S.
Starbucks has changed its bathroom policy. Now you will actually have to buy something if you want to use the facilities. “We don’t want to become a public bathroom, but we’re going to make the right decision a hundred percent of the time and give people the key,” chairman Howard Schultz said a while ago.
South Korea’s suspended president Yoon Suk Yeol was finally arrested in a pre-dawn raid on Wednesday. He had been fending off authorities in a standoff at the presidential palace since January 3.
LA landlords are doubling rent prices in some cases as demand soars following the fires. About 12,000 structures have been destroyed by the fires.
Carrie Bradshaw’s house will be gated off from tourists. Too many people wanted their photo taken on the famous front stoop from Sex And The City.
From the analysts
• Wedbush’s Daniel Ives on the possibility that Elon Musk might buy TikTok: “… in the scenario that ByteDance sold the US operations of TikTok this would be without the algorithm (ByteDance will never sell this key DNA) at a price tag likely in the $40 billion to $50 billion range. This would significantly enhance the value of Twitter/X platform and likely Musk would take outside investments for this potential golden asset pickup. It’s also possible that instead of an outright sale this results in a joint partnership with Musk playing a major role and helping avoid a true ban of TikTok in the US,” according to a note seen by Fortune.
• Going viral amongst finance types: This chart from Apollo’s Torsten Sløk which shows interest rates on 10-year bonds going up right now when normally they go down: “The Fed has cut interest rates 100 basis points since September, and over the same period, 10-year interest rates are up 100 basis points. This is highly unusual,” he says. “Is it fiscal worries? Is it less demand from abroad? Or maybe Fed cuts were not justified? The market is telling us something.”
• JP Morgan’s Dubravko Lakos-Bujas and team note that once again, passive investors beat active investors in the previous 12 months. “Last year was another challenging year for active managers with two-thirds of equity funds underperforming benchmarks … the persistence of ‘winners winning’ in the crowded Mega-caps favored passive funds. In contrast, active managers with a relative underexposure in Mega-caps, higher portfolio diversification requirements, and greater Value-sensitivity led to underexposures in Mag-7, Tech, and Comm. Services,” per a note to clients seen by Fortune.
More news below.
Diane Brady
diane.brady@fortune.com
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