Launch Pad

Today

Markets are reacting positively to signs of potential de-escalation in the Middle East, with oil prices plunging (more in commodities below) and stock futures pointing to a sharply higher open. According to Axios, the U.S. and Iran are closing in on a one-page memorandum of understanding that would end the conflict and set the stage for broader negotiations, including a potential moratorium on Iran’s nuclear program, phased sanctions relief, and the reopening of the Strait of Hormuz. While no agreement has been finalized and key details remain unresolved, the progress marks the closest the two sides have come since the war began, easing near-term market concerns, though questions around execution and durability persist. 

The latest U.S. labour market data suggests continued stabilization rather than deterioration, supporting the view that the economy remains resilient even as hiring demand cools. Job openings declined only slightly last month while hiring rebounded, reinforcing the low-hire, low-fire environment that has characterized much of the past year. While future energy-related cost pressures could still weaken employment momentum, the current labour backdrop suggests that the economy could see a soft-landing scenario in the coming months. This morning’s ADP report reinforces the view that the U.S. labour market remains stable, with job growth coming in stronger than expected while still fitting the low-hire, low-fire dynamic. Still, hiring appears concentrated in a few sectors (particularly healthcare and services) while other areas like professional services show softness, highlighting uneven momentum beneath the surface. Wage growth continues to moderate slightly but remains elevated enough to keep inflation concerns in focus. For the Fed, this combination of resilient employment and sticky inflation supports a continued pause in rate cuts, as there is little evidence yet of the labour market weakening enough to justify easing. 

Canada returned to a trade surplus in March, highlighting how our resource-heavy economy is currently benefiting from elevated global commodity prices, particularly through stronger oil and gold exports driven by geopolitical instability. Rising nominal export values have also helped support the Canadian dollar, while also reinforcing the country’s role as a relative beneficiary of global energy and safe-haven demand. However, much of the improvement is price-driven rather than volume-based, meaning broader economic growth may not receive the same level of support. So while Canada’s trade position is strengthening in the near term, the sustainability of this advantage remains unclear, given that our fate is closely tied to volatile commodity markets. 

Getting high on your own supply. Corporate America’s record pace of share buybacks is providing a powerful structural support for U.S. equities, reinforcing the market’s resilience even as valuations remain elevated and macro risks mount. With companies authorizing hundreds of billions in repurchases, management teams are effectively signaling confidence in cash flows, balance sheets, and long-term earnings power despite geopolitical volatility and inflation concerns. These buybacks also serve as a major ongoing source of demand for equities, helping sustain market momentum beyond retail or institutional sentiment alone. Aggressive corporate repurchases have been acting as one of the strongest bullish undercurrents for U.S. stocks, suggesting that internal capital remains a critical tool for supporting the broader market. 

Health insurers in the U.S. are showing early signs of stabilization after several years of medical cost pressures, but investors remain focused on second-quarter results as the true test of whether pricing and cost-control strategies are working. Strong first-quarter earnings from  UnitedHealth Group, Elevance Health, Cigna, and Humana were helped by conservative pricing, temporary seasonal factors, and stronger reserve positioning, but delayed claims data means actual medical cost trends remain uncertain. The second quarter will be critical in determining whether insurers have accurately priced products like Medicare Advantage and ACA plans amid ongoing healthcare utilization pressures. So while the sector’s recovery narrative is improving, sustained margin stability will depend heavily on whether current underwriting discipline holds as more claims data emerges. CVS just reported this morning and were positive as well (more in company headlines).  

Toronto’s housing market is showing some signs of stabilization as lower home prices and easing borrowing costs begin to draw buyers back, with April sales posting the strongest monthly increase in nine months. However, the broader recovery remains fragile, as geopolitical risks, elevated fuel prices, and trade tensions continue to weigh on consumer confidence. Vancouver continues to lag, with sales and prices still declining, though strength in detached homes suggests a more uneven recovery. While we’re on the topic, U.S. new home sales rebounded in February and March as weather-related disruptions faded, however a broader recovery remains constrained by rising mortgage rates and elevated inventory. Builders continue to face a challenging balance between improved demand and an oversupplied new-home market, which may discourage more aggressive construction activity. 

Lottery wins or woes; it depends on who you ask. After a rough few days around the front office (who’s a John Chayka fan?), Leafs fans caught a break, winning the 2026 NHL Draft Lottery with just an 8.5% chance, while Canucks fans are left with the what-ifs after entering with the best odds (18.5%) and sliding to third. For those watching and a bit confused, you’re not alone: the system is designed to prevent tanking, with 16 non-playoff teams assigned weighted odds and two draws determining the top two picks, with teams able to move up a maximum of 10 spots. This year delivered movement, with Toronto landing No. 1, San Jose jumping to No. 2 on just a 5% chance, and Vancouver settling at No. 3. At the top of the class is Gavin McKenna, the consensus number 1, with Ivar Stenberg leading the international group, while much of the remaining top tier is dominated by defensemen, including Carson Carels, Chase Reid, Keaton Verhoeff, and Daxon Rudolph. Drafting first doesn’t solve everything, but it gives a team flexibility, whether to keep the pick or explore a trade, and it certainly won’t stop fans from already sketching out lineups around a potential franchise piece. 

Commodities

Up, down, up…oil prices are significantly lower after Axios reported that the U.S. believes it’s close to an agreement with Iran to end the war. However, the one-page memorandum, which includes both sides lifting restrictions on the Strait of Hormuz, has not yet been agreed upon and the U.S. sees Iran responding within 48 hours. Crude benchmarks responded and are down over –10% with Brent below $100, and WTI under $90. This comes a day after General Dan Caine, the chairman of the Joint Chiefs of Staff, said attacks by Iran on vessels in the Persian Gulf and energy infrastructure in the United Arab Emirates didn’t constitute a breach of a ceasefire. On the data front, the American Petroleum Institute reported crude inventories fell 8.1 mln barrels last week, which would be the biggest draw since mid-February if confirmed by official data due later today.  The relief in oil price may have come at a good time, as U.S. gasoline prices topped $4.50 a gallon for the first time since July 2022, extending their march higher as drivers face further strain from the prolonged conflict in the Middle East. This is now 50 cents off the record $5.01 set in June 2022. On a seasonal basis, prices are already at an all-time high for this time of year. 

With oil going lower, gold and silver are getting a boost and are up the most in a month.  Bullion climbed as much as 3.3% to breech $4,700, while silver gained as much as 6.3%. Gold has fallen over -10% since the start of the war, as the resulting energy shock from the war has dimmed the prospect of interest-rate cuts. The bounce in precious metals looks to be following a pattern that has been seen since the war started as improved sentiment hurts the dollar, which then props both gold and silver higher. Gold’s inverse correlation with the greenback hasn’t been this pronounced since 2024.  

Fixed income and economics

Inflation fears are hitting hard in the UK as long-term borrowing costs jumped to a 28-year high as worries intensified over local government elections and the impact of soaring energy prices on the economy. The yield on 30-year gilts hit 5.78%, the highest level since 1998. The selloff swept across bonds of all maturities, with 10-year notes topping 5.10% as markets reopened from a public holiday on Monday. While bond markets around the world have signaled their concern with faster inflation and potentially higher interest rates, the UK stands out as the most extreme example. The combination of Britain’s political landscape, feeble economy and strained government finances have made it a target for traders looking for a weak link.  With local elections looming this week, the concern is that the Labour Party is heading for big losses at the ballot box which is increasing the chances that either Starmer or his replacement would have to boost government spending to win back disaffected voters, which would further pressure the UK’s finances. On top of this, the reliance on imported energy is not helping and has left it vulnerable to an economic shock from the war. With oil prices stuck above $100, the fear is that faster inflation will force the central bank to hike interest rates even further. Markets are now pricing in three quarter-point rate hikes this year, up from two last week.   

Chart of the day
 

Markets

Quote of the day
 

It is during our darkest moments that we must focus to see the light. Aristotle Onassis