Morning Watchlist: Thursday Edition
A quick note from Behind the Markets
The week is rounding into its final stretch, and the tape is staring at three numbers: a $100 barrel, a coin-flip Fed, and a brand-new list of banned goods.
On Wednesday morning, Brent crude pushed through $100 a barrel — its highest since late July — after Iran fired ballistic missiles at a U.S. Navy warship and the U.S. answered by destroying five Iranian tankers. Jordan intercepted eighteen missiles. Merchant ships burned in the Strait of Hormuz. And the Houthis widened the map, forcing Saudi Arabia to halt operations at energy facilities in its south. The Dow gave up about 600 points Tuesday while futures put the odds of a Fed hike next week near 58%.
Then Washington opened a new front in the other war. On Wednesday the White House unveiled an outright import ban — not a tariff, a ban — on Canadian motorcycles, dairy, and a liquor cabinet's worth of beer, wine, and whisky, effective September 29.
A ban list, a $100 barrel, and a gold price that refuses to blink. Three stories this morning. Three pairings. Let's get into it.
1) Motorcycles, Milk, and Whisky
Tuesday it was tariffs — Canada's counter-duties on American steel, furniture, and electronics went live at 12:01 a.m. Wednesday it was bans: Washington announced that as of September 29, Canadian motorcycles, dairy products, and most Canadian alcohol simply may not enter the United States. Canada's trade minister promised to protect "Canadian workers" from "unjustified actions." Prime Minister Carney's answer: "We have everything we need to pivot and prosper."
Read the ban list like an investor, not a voter. Somebody sells motorcycles into America from Canada — and somebody else has been waiting across the street. Canada's powersports champion is BRP: the maker of Ski-Doo snowmobiles, Sea-Doo watercraft, and Can-Am machines, including the three-wheeled Spyders and Rykers that roll out of Quebec. Back in April, when the first tariff wave hit, BRP suspended its guidance entirely and pegged the cost at more than $500 million for the rest of 2026.
Its American rival never blinked. Tariff walls turn national markets into home fields — and one company is suddenly playing every game at home while BRP plays every game away and pays for the plane tickets.
The pairing: Polaris (PII) — Watch
Polaris builds ATVs, snowmobiles, the Slingshot three-wheeler, and Indian Motorcycles, with factories in Minnesota, Iowa, Alabama, and Indiana. When BRP pulled its outlook in April, Polaris reaffirmed — and the stock jumped 15% in a day, its best in nine months. In July it went further: sales up 9%, with guidance for sales, margins, and earnings all raised. At about $61, it's a $3.5 billion company paying a 4.4% dividend yield, about 21% below its 52-week high.
So why Watch and not Buy? Because Polaris is a turnaround wearing a costume. The trailing twelve months show a loss, and the stock trades near 22 times next year's expected earnings — the multiple of a cyclical climbing out of its own trough, where the P/E is a funhouse mirror. And powersports are big-ticket toys bought on credit, in a country with 7% loan rates and record pump prices. Our entrance: proof the home-field advantage lands in orders — the October 27th report is the exam — or a pullback toward the mid-$50s that pays us to wait. What kills it: a quick handshake with Ottawa, or the consumer cracking before the umbrella opens.
2) The Barrels Farthest From the Fire
Back to the loud story. Warships, tankers, mines in the strait — and Saudi Arabia idling southern facilities after Houthi strikes. Capital.com's Daniela Hathorn put it plainly: the attacks have "widened the threat further, raising concerns that disruption could spread."
The crowd's response is to chase whatever floats: refiners ran all summer, tanker rates already spiked — our International Seaways Watch has been living that story since August. But here's the thing about oil. It's priced like fish at the world market. When a storm closes the biggest port, the price of fish goes up at every dock — including the docks the storm can't reach.
The calmest dock in the world right now is a county road in South Texas.
The pairing: Magnolia Oil & Gas (MGY) — Buy
Magnolia pumps oil and gas from the Eagle Ford shale and its quietly prolific Giddings field — barrels that will never see a strait, a tanker convoy, or a war-risk insurance premium, yet reprice with every headline out of the Gulf. The second quarter set a production record, earnings beat, and free cash flow came in at $235 million for the quarter. Last year it swallowed WildFire Energy for $4.06 billion, adding acreage next door.
At Tuesday's close of $27.42 — up 2.3% while the Dow sank — Magnolia is a $6.5 billion company at about 9 times next year's expected earnings. The S&P 500: 21. Nineteen analysts call it a Buy, with targets near $33, and it pays a 2.6% yield besides. The honest risks: the cheerful way to lose is peace — de-escalation in the Gulf would deflate crude and this stock with it (we'd take that trade, and said the same about Darling). The WildFire deal added debt to a balance sheet that used to be famously bare. And a hawkish Fed slowing the economy is a demand risk no basin can hide from.
3) The Songwriter in the Gold Rush
Quietly, gold is telling you something. It sits near $4,450 an ounce — a few percent under late August's record — after holding the entire month that put a Fed hike back on the table. Bonds sold off, hike odds doubled, and the metal barely gave ground. When an asset refuses to fall on bad news, pay attention.
We already own a miner here — Eldorado Gold, our August 24th Buy, still stands. But $100 oil complicates the mining trade: fuel is one of a mine's biggest line items, and every dollar crude rises nibbles the very margin that record gold created. There's a business one step behind the miners that never buys a gallon of diesel.
A royalty company financed the mine years ago in exchange for a slice of every ounce, forever. It's the songwriter, and the miners are the touring band: when ticket prices double, the royalty check doubles — but the band pays for the buses, and diesel just set a record.
The pairing: Royal Gold (RGLD) — Buy
Royal Gold owns royalties and streams on mines across the world. Higher gold flows straight through: the June quarter set company records for revenue, cash flow, and net income, and revenue nearly doubled over the past year. At Tuesday's close of $261.37, it's a $22 billion company at about 23 times next year's expected earnings — a premium to the S&P's 21, but the cheapest ticket among the big royalty houses, whose peers have historically commanded 30-plus. Twelve analysts say Buy, with an average target near $303 against a 52-week high of $306.
The honest risks: this is still, ultimately, a bet that gold stays elevated — a hawkish surprise Friday from the CPI, or next week from the Fed, that finally knocks the metal down takes the royalty check with it. The dividend is small at 0.7%. And at 15% below its high, we're not early — we're paying up for the safest seat in the theater.
Before You Go
A home-field manufacturer behind a closing border, barrels priced by a war they'll never see, and a royalty check with no fuel surcharge. One theme: get paid on the chaos without standing in it.
Housekeeping, because Tuesday night was busy. GameStop's full report landed: record second-quarter operating income, full-year profit guidance raised, and $1.4 billion of convertible debt retired — real discipline — but the $2 billion buyback signal we named as our entrance stayed quiet, so GameStop stays a Watch.
Casey's beat estimates by 65 cents and fell roughly 10% anyway — at 40-plus times earnings, good isn't good enough; that's exactly why our Murphy USA rides the same aisle at 15.6 times. Tonight, Oracle reports, and Powell Industries is listening. The inflation gauntlet finishes the week: PPI lands about when this note does, CPI comes Friday at 8:30 — then the Fed decides Tuesday and Wednesday, with the Bank of Japan right behind.
Found this helpful? Share it with others.
Written by Behind the Markets