Launch Pad

This comes after both the TSX and S&P 500 rose last week, overcoming a midweek selloff as investor enthusiasm returned following the record-breaking SpaceX IPO and signs of progress toward a U.S.-Iran peace agreement. Tech stocks saw big swings, with semiconductor shares rebounding after an earlier rout, while software companies struggled following disappointing reactions to earnings from Oracle and Adobe. On Friday, SpaceX rallied 19% in its market debut, reaching a valuation above $2 trillion and helping lift space-related stocks, while the IPO also made Elon Musk the world’s first trillionaire. Investor demand was impressive, exceeding $350 billion, as both institutional and retail investors wanted exposure to the space, satellite, and AI businesses. The strong debut is being viewed as a positive signal for upcoming IPOs from other AI leaders like OpenAI and Anthropic. Despite concerns about SpaceX’s lack of profitability and its lofty valuation, the stock’s strong first-day performance was seen as a vote of confidence in Musk’s long-term vision. 

The U.S. and Iran announced a peace agreement that would reopen the Strait of Hormuz, end military operations between the two countries, and begin negotiations over Iran’s nuclear program. Trump announced that the deal was complete, while Pakistani Prime Minister Shehbaz Sharif said a formal signing is expected to take place in Switzerland on Friday. Under the deal, both sides will lift their competing blockades, agree not to attack each other, and Iran will receive some relief from sanctions on its oil exports. The agreement helped ease fears of further disruption to global energy markets, sending oil prices lower, although significant uncertainty remains around implementation, future nuclear negotiations, and Israel’s response. While both governments are saying that they see the deal as a victory, mistrust and key details like long-term security arrangements, have not yet been released. If a deal is reached though, the agreement could reduce geopolitical tensions, stabilize energy markets, and remove a major source of inflationary pressure on the global economy. 

Shifting U.S. equity markets. After years of stock buybacks (totaling nearly $12 trillion) and companies staying private, we are seeing a rise in new share issuance led by the AI boom. Companies like SpaceX, OpenAI, Anthropic, Alphabet, Meta, and Oracle have or are expected to raise massive amounts of equity capital to fund AI-related investments in data centers, chips, and infrastructure. Analysts estimate net equity issuance could reach $1.5 trillion over the next two years, the strongest supply increase since the late 1990s, potentially creating a headwind for stock valuations as investors absorb a flood of new shares. While strong demand for high-profile AI companies may support the market initially, some strategists warn that mega-IPO activity and secondary offerings could reduce future returns, increase volatility, and mark the end of a long period when shrinking share counts consistently boosted stock prices. 

China’s economy continues to lose momentum as weak consumer spending, a sluggish property market, and declining investment weigh on the economy, despite strong export growth. Retail sales are expected to have fallen for the first time since the country came out from pandemic restrictions, signaling cautious consumers, a weak job market, and reduced government incentives for spending. Fixed-asset investment remains under pressure despite plans for increased infrastructure spending, while household deleveraging and low confidence continue to weigh on domestic demand. Although exports and industrial production have been helped by strong demand for AI-related products like semiconductors and computers, economists warn that growth is slowing toward 4%, below Beijing’s target range. As a result, policymakers may rely on fiscal stimulus and potentially future interest-rate cuts to stabilize the economy. 

Jam packed sports weekend. On Saturday, the Knicks captured their first NBA championship in 53 years, defeating the Spurs in five games and ending one of the longest title droughts in professional sports (a drought that is modest by Toronto hockey standards). The victory sparked massive celebrations across New York City, though some celebrations turned chaotic and looked more like a riot than celebration. On Sunday, the Carolina Hurricanes were crowned Stanley Cup champs, taking the Cup from Marner’s Vegas’ hands and denying the Golden Knights their second championship in three years. The championship marks a major achievement for coach Rod Brind’Amour, who now has Stanley Cup titles with Carolina as both a player and a coach. Oh, and there was also the Canadian Open, where Bud Cauley captured his first PGA Tour victory. Meanwhile, the World Cup continued to deliver its share of surprises. On Friday, Canada salvaged a 1-1 draw against Bosnia and Herzegovina with a late equalizer after trailing for much of the match. Elsewhere, Morocco held Brazil to a draw, Qatar and Switzerland finished level, and Japan battled the Netherlands to an entertaining 2-2 result. Germany supplied the tournament’s most lopsided score so far with a 7-1 victory over Curaçao, while Scotland, Ivory Coast, Australia, and Sweden all opened their campaigns with wins. With only a handful of matches played, the expanded tournament is already delivering the drama and surprises that make soccer’s biggest global stage so compelling. 


Diversion: The support group we all need  
 

Gold and silver are rallying on easing global inflation fears and potentially lower expectations for rate hikes. Gold has largely moved in an inverse relationship to oil prices since the war began, as higher energy prices fueled inflation concerns and prompted central banks to become hawkish and keep rates higher for longer, dimming the appeal of non-yielding precious metals. All eyes will be on the Federal Reserve as they announce rate policy on Wednesday. No rate moves are expected, but the commentary will definitely shift now that a deal may be in place. Gold-related mining stocks are also rallying followed bullion prices higher. Australia’s Northern Star Resources Ltd. jumped about 8% in Sydney and Zijin Mining Group Co. rallied roughly 7% in Hong Kong. In North America, Barrick Mining Corp. and Newmont Corp. gained more than 4% in pre-market trading.