Weekly Brief #70
When is this mess going to end?... Plus, Bank of Canada cuts rate by 0.25%, CoreWeave signs $12 billion OpenAI contract, Google and Anthropic partner for AI security, and more.
A huge welcome to the 20 investors who joined The J. Nicholas since last week! Haven’t subscribed yet? Join 872 intelligent investors by subscribing here.
Good morning investor 👋,
Welcome back to the 70th Weekly Brief.
This week’s performance:
S&P 500: -3.57% | Nasdaq: -3.95% | Dow Jones: -3.98% | TSX: -1.55% | Gold: +2.24% | Bitcoin: +1.85% | The Quality Fund: -3.93%.
There’s no point in saying good morning because it certainly is not one (Nancy Pelosi meme—seemed fitting, though I already said good morning). Tariff wars and threats continue worldwide, with Canada and the EU strengthening their stances against a economically-aggressive America recently. U.S. recession fears are imminent, and Canadian depression fears are approaching—all coming together to cause a continual downtrend in equities this week. Awesome sauce. On the bright side, this probably won’t continue for the entire year. But until it does, consider Weekly Brief’s main story every week to be your go-to source for updates on tariffs.
And oh wait—another bright side—it’s giveaway time. If you’re new, every ten weeks of Weekly Brief, I host a giveaway of Amazon gift cards. With each 10-week milestone, the gift card amount increases by $10. This week marks the 70th consecutive issue of Weekly Brief, meaning today’s giveaway is (drum roll) A $70 Amazon gift card1. The rules to enter are simple (as a subscriber):
Share this newsletter with at least one person who would find it valuable.
Engage – Reply to this email (or comment on the web) with:
One key takeaway from this newsletter.
One suggestion for improvement.
Stick around until next week’s brief to see if you won. Now, onto tariffs.
Let’s get into it. (11 min read)
In this issue:
📉 When is this mess going to end?
🤝 Google and Anthropic partner for AI security
🇺🇦 Ukraine-Russia 30-day ceasefire(?)
FEATURED STORY
📉 When is this mess going to end?
“I don’t know about you guys, but since the tariffs have been going back and forth for the past two months, I’ve started getting sick of it, and I now don’t care about it until they actually mean it.” — a paraphrased message from an amazing supporter of this newsletter in the Discord this week (
).I thought it made for a great intro to today’s write-up because the current tariff situation... it does seem like a joke, right? The good news is it gives me a reliable topic to write about every Weekly Brief. But the bad news is global reccession? This isn’t a fair trade-off unfortunately.
I’m not going to give you much of a write-up this week on the details of tariffs, their impacts, or what it means for the stock market (this has been written about in a many past posts of mine on this newsletter). Instead, I’m simply going to give my updated opinion on what I think of the tariffs. Then, I’ll give you the actual details of the Ontario, EU, and U.S. tariff threat/war face-off we had. It’ll be quick, I promise. Dare I say, “brief.”
My thoughts
The reasons for these tariffs by America are one of the following: (1) Assuring Trump’s dominance globally as he enters his first year of the presidency, (2) Creating uncertainty around himself to confuse adversaries, or (3) Leveraging these tariffs with allies for new deals and/or further negotiations elsewhere.
I believe it’s probably a distorted mix of all three—plus reasons I didn’t include—but more easily, it’s a negotiation tactic. I’ve said the same in every tariff write-up, and this opinion of mine stands. Trump enjoys the ambiguity that we’re in right now because it brings attention to him. More importantly, it brings attention to America, and it sets the stage for him to feel as though he’s in control of the world. Which, let’s say, is his way of being a world leader.
The truth is that Donald Trump is a free market capitalist. Or was.
Would a free market capitalist legitimately want to destroy complex global supply chains, increase the pricing for all consumers, weaken economic alliances with a country’s strongest allies, and weaken the dominance of the U.S. dollar?
Trump wants the stock market to flourish, he wants free trade to prosper, he wants taxes to drop, regulation to ease off, innovation to rise, and commerce to thrive. It’s what he’s always been for. Unless he’s done a complete 180 degree turn, I don’t see it fitting for this uncertainty to last long before his free market capitalist side takes effect.
Everything is bonkers at the moment. But it’s temporary, right?
Again, I can only hope I’m right here. I have absolutely no idea if I am. I just find it hard to believe Trump, of all people, is willing to cause economic damage to the U.S., cause the stock market to lose $4 trillion—all without doing anything. If he were willing to do so long-term, that would be very surprising to me.
Overall, it’s a waiting game here. We’ll find out eventually.
So, what happened this week with tariffs?
This week wasn’t just about Canada and the U.S., surprisingly. Tariffs have finally gone beyond North America and China, with Europe finally getting its slice of the pie. Here’s your brief2:
Ontario, Canada vs. America
On Monday, Premier of Ontario, Canada, Doug Ford placed a 25% surcharge on electricity exported to the U.S. If this is long-lasting, it would affect 1.5 million families and businesses in the states of Minnesota, New York, and Michigan.
Trump got wind of this announcement by Ford, and as retaliation, announced an order to place 50% tariffs on Canadian steel and aluminium imports to the U.S.
Ford suspended the surcharge, Trump withdrew his threat of the order, and Ford and U.S. Commerce Secretary Howard Lutnick agreed to meet together to discuss relations later in the week. According to Ford, after the meeting, it went very well. “The temperature’s coming down.” — Doug Ford
Europe vs. America
Trump’s expected 25% tariffs on EU aluminium and steel imports went into effect on Wednesday.
The EU immediately retaliated with 50% tariffs on American spirits imports and included tariffs on €26 billion ($28 billion) worth of American goods (boats, bourbon, motorbikes — products originating mostly from Republican states, much like the strategy Canada implemented). These are set to go into effect in April.
Trump saw the 50% spirit tariff and responded with a threat to place a 200% tariff on all “WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES.” (verbatim quote)
This EU-U.S. trade war is still ongoing as of the time of writing. As a reminder, America’s reciprocal tariffs are imposed on April 2, 2025, meaning all countries with an existing tariff on America by that point (not including other proposed retaliatory tariffs America may impose in the meantime) will be matched by America. Remember, retaliation goes nowhere. It only invites more retaliation. And in the end, consumers pay for it. You and I. Taking an eye for an eye just leaves everyone blind. No one wins.
Future editor Jacob: Also—almost forgot to mention—finally, absolutely, no doubt about it, the next free Deep Dive issue in the stock research series will be out next week, followed by a paid stock report the week after, and so on according to schedule. Why have these taken me so long to finish? Long story. Just know they’re coming, and for the future, posts will be released on time, every week. Right now, my schedule is: daily posts on Substack Notes, three times per week on Blossom, twice per week on this newsletter, writing two eBooks to be finished by June, adding more free resources in my Shop, and continuing paid exclusive quarterly reports in the Discord.
Thank you all! Enjoy today’s issue. And don’t forget to join the giveaway!
FINANCE
a. 🏦 Bank of Canada cuts rate by 0.25%
The Bank of Canada (BoC) lowered its policy rate by 0.25%, to 2.75% this Wednesday, with the Bank Rate at 3% and the deposit rate at 2.70%.
More data provided by the bank:
Canada’s economy grew 2.6% in Q4 2024. Growth in Q1 2025 will likely slow due to trade tensions.
Consumer confidence has dropped, and business spending is slowing.
Employment growth was strong from November to January, with the unemployment rate falling to 6.6%. But wage growth has moderated, and trade tensions may disrupt job market recovery.
Inflation remains near 2%. This is expected to rise to 2½% in March after the GST/HST tax break ends.
The bank’s thoughts on U.S. tariffs:
“You can’t see much damage from the trade war in the hard data yet. But when you look at the survey data, it’s pretty clear that consumer confidence, business confidence, have been sharply affected… What it can and must do is ensure that higher prices do not lead to ongoing inflation.” — BoC governor Tiff Macklem
It’s a waiting game, ultimately. We’ll have to sit back and watch. PS: I may have added a graph for BoC interest rates from 2020 onto the main photo above. If you can just ignore that… thanks.
Related articles:
b. 💰 CoreWeave signs $12 billion OpenAI contract
CoreWeave, a startup founded in 2017, has signed an $11.9 billion AI infrastructure contract with OpenAI ahead of its expected IPO, where it plans to target a $35 billion valuation, despite only reporting $1.92 billion in revenue and a whopping $863.4 million in losses for 2024.
Sam Altman, CEO of OpenAI, called CoreWeave (under this deal) a “valuable addition to their infrastructure portfolio,” complementing partnerships with Microsoft, Oracle, and SoftBank. CoreWeave’s business involves supplying high-powered AI chip cloud infrastructure, mainly from Nvidia. It competes with cloud giants such as Amazon and Microsoft. Microsoft accounts for two-thirds of CoreWeave’s revenue.
BUSINESS
c. 🤝 Google, Anthropic partner for AI security
Snowflake is reportedly in talks with Google and Anthropic for a data security deal, which could help position the company as a leader in AI data solutions, much like Palantir is labelled.
Snowflake aims to integrate AI models like Google’s Gemini (and also Claude, I assume) into its platform to enable secure, AI-powered applications, particularly for industries like banking and healthcare that are concerned with data leaks. Anthropic is one of the leading companies in the LLM and AI model space, backed by both Amazon and Google, which have invested roughly $11 billion into the company combined. Google reportedly owns 14% of the company.
Related articles:
d. 🧑⚖️ FTC delays Amazon antitrust lawsuit
Or do they? The U.S. Federal Trade Commission (FTC) found itself in a teeter-totter situation this week, when it issued a statement to delay its antitrust trial against Amazon this September due to new cost-cutting measures in the agency and staffing issues (possibly because of the new Elon Musk-run unofficial government agency: DOGE (Department of Government Efficiency).
However, shortly after, they announced they would not delay the trial, backtracking on that earlier statement. The FTC is suing Amazon over “dark patterns” that allegedly tricked consumers into auto-renewing Prime subscriptions, with penalties of $1 billion. I’m not entirely sure what this is about personally, as from what I’ve seen, Amazon has a clear unsubscribe button for Prime on its website and app. Here is the lawsuit if you’d like to know more.
POLITICS
e. 🇺🇦 Ukraine-Russia 30-day ceasefire(?)
Ukraine agreed to a 30-day ceasefire proposal this week regarding Russia after US-Ukraine talks on Tuesday in Saudi Arabia. US Secretary of State Marco Rubio said he would present the offer to Russia, and when he did, Putin agreed to the idea of a ceasefire but is not adamant about signing off on a deal just yet.
He said, and I quote (from BBC):
“The idea is right and we support it. But there are questions that we need to discuss… We need to negotiate with our American colleagues and partners… Maybe I’ll have a call with Donald Trump… It will be good for the Ukrainian side to achieve a 30-day ceasefire… We are in favour of it, but there are nuances… How will those 30 days be used? For Ukraine to mobilize? Rearm? Train people? Or none of that? Then a question: how will that be controlled? Who will give the order to end the fighting? At what cost? Who decides who has broken any possible ceasefire, over 2,000km? All those questions need meticulous work from both sides. Who polices it?”
Russia occupies about 20% of Ukraine as I write this. The U.S. and Ukrainian sides are pushing for the deal to be agreed upon, but based on Putin’s statement, it may take a while before anything major happens. Even if something does occur, it’s only for 30 days, and while this is a step in the right direction, it’s not the end. Also, the U.S. and Ukraine have agreed to finalize the minerals deal (again).
Related articles:
📚 Book of the Week
For every book purchased using the links below, 100% of affiliate commissions are donated to charity. (Amount donated so far: $36.42.)
My full bookshelf: Here.
Slouching Towards Utopia - J. Bradford DeLong
Book Description:
Before 1870, humanity lived in dire poverty, with a slow crawl of invention offset by a growing population. Then came a great shift: invention sprinted forward, doubling our technological capabilities each generation and utterly transforming the economy again and again. Our ancestors would have presumed we would have used such powers to build utopia. But it was not so. When 1870–2010 ended, the world instead saw global warming; economic depression, uncertainty, and inequality; and broad rejection of the status quo.
Economist Brad DeLong’s Slouching Towards Utopia tells the story of how this unprecedented explosion of material wealth occurred, how it transformed the globe, and why it failed to deliver us to utopia. Of remarkable breadth and ambition, it reveals the last century to have been less a march of progress than a slouch in the right direction.
Thank you for reading, partner. If you enjoyed today’s issue, feel free to share it with friends and family. I’ve placed a button below for you to do so (right underneath the paid membership line (see what I did there).
All the best,
Jacob
All of my links here.
Serious about high-quality stock investing? My best work is members-only. Don’t miss out on exclusive insights and benefits—upgrade today.
Canadian dollars
Timeline of retaliation may be slightly off, but the data is accurate.
Hi Jacob. Interesting article. There are a myraid of questions as to why is President Trump's economic team doing what they are doing. I've done some digging into this 1) America has a TON of debt maturing in the not to distant future, if they can "crash" the economy and drop interest rates 1.5-2% before this it will save American's 2-3 Billion a year in Interest payments. 2) If they are succesfull in "crashing" the economy in turn that will "crash" the dollar and make American exports much more affordable to other buyers. President Trump did in his campain say there was going to be some pain. There are articles and You Tube people out there talking about this.
Thanks Jacob