The Impact of the Canadian Rail Strike on Americans

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Conway Gittens: I’m Conway Gittens, and I’m reporting for the latest from the New York Stock Exchange. Here’s what we’re watching today on TheStreet.

Wall Street struck a cautious tone ahead of Federal Reserve Chairman Jerome Powell’s speech on Friday. Investors want to hear what he has to say about the pace of rate cuts that are expected to begin in September.

Watch ICYMI this week:

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• 7-Eleven parent company set to complete mega-merger
• Boeing’s 777X family hits new snag as testing suspended
• Carl Icahn to pay $2 million to settle SEC charges

In other news…Dark clouds could be gathering on the horizon for the U.S. economy due to a major rail strike north of the border.

All train movements on Canadian National and Canadian Pacific Railways in Kansas City have been halted after labor negotiations broke down. Both companies have asked about 10,000 unionized workers to stay home.

A spokesman for Canadian Pacific in Kansas City told CNN: “We are in the middle of the peak shipping season in the fall. Containers of Christmas gifts are coming into the ports. If this period extends into the fall, the consequences will be even worse.”

According to the U.S. Department of Transportation, cross-border trade between the two countries totals $382 billion, 14 percent of which is by rail.

Auto parts are particularly vulnerable because many components cross the border multiple times before the finished vehicle rolls off the assembly line. A disruption to that supply chain could leave U.S. auto plants with no choice but to temporarily shut down.

But it’s not just new car sales that are at risk, it’s also what you serve on your plates. Those rails also carry fertilizers used in American food production and chlorine used to purify water.

A US company estimates that a one-week shutdown could cause $1 billion in economic damage and pose a major threat ahead of the peak holiday gift-buying season.

That will do it for your daily briefing. From the New York Stock Exchange, I’m Conway Gittens of TheStreet.

Related: Samsung union begins three-day strike to protest unfair wages