TARIFFS: US Supreme Court To Hear Arguments In Trump Tariff Case Nov. 5
Reuters reporting that the US Supreme Court will hear arguments over the legality of President Donald Trump's tariffs on November 5. The Supreme Court agreed to hear the case earlier this month after two lower courts ruled the 1977 International Emergency Economic Powers Act that Trump tapped to unilaterally impose his Liberation Day tariffs on dozens of trading partners was unlawful.
- Trump used the law to declare emergencies over drug trafficking and illegal immigration to impose tariffs on Canada and Mexico. He then tapped the law again to impose sweeping tariffs on April 2, citing a national security emergency over trade deficits.
- Other tariffs imposed via Section 232 and Section 301 authority, relating to specific sectors like metals and lumber and upcoming tariffs on pharmaceuticals and semiconductors, would not be affected.
- Politico notes that US has collected "more than $70 billion in tariff revenue from Trump’s country-specific duties, imposed under emergency authorities…” US Treasury Secretary Scott Bessent has acknowledged that the US government would be compelled to repay tariff revenue if the Supreme Court rule against the Trump administration.
- The prevailing view is that the Supreme Court is unlikely to rule against the Trump administration. The court’s conservative majority is “typically reluctant to second-guess executive power” in matters of foreign affairs and national security, writes The Atlantic Council in a piece arguing that the SCOTUS ruling will “shape US economic policy for years to come,” regardless of the outcome.
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EQUITIES: Stocks Plumb New Lows, But S&P Ex-Mag 7 Still Higher
- e-mini S&P pulls back to touch a new daily low through the London close at 6439.00 - before markets stabilise off lows. Tech is notably underperforming: NASDAQ is leading the decline, with S&P 500 now in negative territory - although the DJIA holds small gains.
- Of note, Russell 2000 futures have come off highs, but are generally seeing a much shallower pullback relative to the larger cap indices.
- The NYSE Tick Index shows evidence of a sizeable sell program going through at 1101ET/1601BST - with 872 names sold on the downtick, the largest since Thursday last week and the response to the higher-than-expected PPI print.
- Megacap tech stocks look to be leading declines - Netflix, Alphabet and Meta Platforms are dragging the communication services sector lower, while soft semiconductors and chip names (NVIDIA, AMD, Oracle) drag the IT sector with them.
- Bloomberg's S&P 500 excluding the 'Magnificent 7' is still higher by 0.2% on the day, while trading lower by 0.2% when including those names.
- Supports to watch remain 6399.62, the 20-day EMA, and 6275.86, the 50-day EMA.
BELGIUM AUCTION PREVIEW: On offer next week
Belgium has announced it will be looking to sell the following at its auction next Monday, August 25:
- the 3.00% Jun-33 OLO (ISIN: BE0000357666)
- the 2.85% Oct-34 OLO (ISIN: BE0000360694)
- the 3.50% Jun-55 OLO (ISIN: BE0000361700)
CANADA: Conservative Leader Returns To Commons After Easy By-Election Win
Leader of the main opposition centre-right Conservative Party of Canada (CPC), Pierre Poilievre, has been returned to the House of Commons following a comfortable by-election win on 18 August. With 99.65% of the vote counted, Poilievre won the rural Alberta riding of Battle River-Crowfoot with 80.4% of the vote. Independent candidate Bonnie Critchley came second with 9.9%. The result was never in doubt, with the sparsely populated area of Alberta to the east of Calgary one of the most conservative areas of the country.
- Poilievre's win will enable him to debate PM Mark Carney in the House of Commons, a privilege he has never held. Prior to the 28 April federal election, Carney did not hold a seat in the Commons and so could not take part in the PM's Question Period. In a disastrous result for the Conservatives on election night, Poilievre lost his own riding in Ottawa. Since then, he has not been able to directly question Carney.
- The CPC leader's return to parliament does little to alter the gov'ts policy direction or Carney's position as PM. Indeed, Poilievre will face another challenge in the new year. In Jan 2026, CPC members vote on his leadership following a review of the election disaster, where the party went from leading the Liberals by 20% just months before the vote to seeing Carney win an overall majority after CPC support cratered in the face of trade and security threats from the Trump administration in the US
