Launch Pad

The recent rise in interest rates is a good reminder that markets are driven by more than just one variable. While higher bond yields are (theoretically) negative for stocks because they increase the discount rate applied to future earnings, valuation is ultimately a function of both interest rates and expected earnings growth. Over the past several years, earnings expectations (particularly for AI-related companies) have risen faster than interest rates, allowing stock valuations to remain elevated despite rising Treasury yields. The S&P 500 traded at roughly 15x–18x forward earnings when the 10-year Treasury yielded around 2.3% between 2015 and 2019, yet today the market trades near 21x earnings with the 10-year yield around 4.5%. Investors are willing to pay higher multiples when they expect stronger future cash flows. Strong earnings growth from AI, and technology infrastructure has offset the headwind from higher rates, helping explain why stocks continue to trade near record highs despite the higher cost of capital. How long that lasts is another question. 

The upcoming SpaceX IPO highlights how some of the most valuable companies are staying private for longer, allowing most of their growth and value creation to occur before public investors have an opportunity to participate. Earlier technology giants such as Amazon, Apple, Netflix, Alphabet, and Nvidia typically went public within three to six years of founding, allowing public shareholders to benefit from decades of subsequent expansion. Things are a bit different these days, however, with private capital from venture funds, private equity firms, sovereign wealth funds, and institutional investors enabling companies to remain private much longer. As a result, IPOs represent liquidity events rather than growth-funding events, with public investors often buying into businesses that are already mature, dominant, and valued in the hundreds of billions (or even trillions) of dollars. 

Benchmark home prices in Canada have fallen roughly 20% nationally since their 2022 peak and more than 30% in some markets. Yet despite this decline, affordability remains a challenge because prices are essentially back to pre-pandemic levels, a time that was already considered unaffordable to many. According to a recent survey, 55% of Canadians still want home prices to fall further, including 69% of those aged 18 to 34, showing just how disconnected housing costs remain from incomes. The problem is particularly notable in major urban areas, where ownership costs consume an estimated 88% of median household income in Vancouver and 63% in Toronto. While rents have eased and housing supply has improved in some areas, much of the new inventory consists of condos that don’t meet the needs of many families, while affordable single-family homes remain in short supply. So, while the correction has improved affordability at the margin, it hasn’t solved Canada’s housing problem with many highlighting the need for policies that focus not just on building more homes, but on building the right types of homes in the right locations. 

The AI investment boom is beginning to broaden beyond the semiconductor giants, with investors looking for the next beneficiaries.  The expectation is that planned capital raises by companies like SpaceX, OpenAI, and Anthropic could unlock tens of billions of dollars in additional AI infrastructure spending, creating opportunities for server assemblers, cooling-system manufacturers, advanced packaging firms, testing companies, power suppliers, and semiconductor materials producers. This is beginning to play out in Asia, where valuations for leading chipmakers TSMC, Samsung and SK Hynix continue to expand, leading investors to look further down the supply chain where earnings growth is accelerating but valuations remain more reasonable. The next phase of the AI trade may be less about owning the largest chipmakers and more about identifying the infrastructure bottlenecks like servers, power, cooling, networking, packaging, and energy generation. 

Labour peace at last. Canada Post workers have approved a new five-year agreement, with more than 85% voting in favour of the deal, bringing relief to businesses and consumers that rely on the national service. The vote marks a significant shift from last summer, when ~70% of employees rejected a previous offer over concerns about job security, pension protections, and the expansion of part-time work. While the latest agreement remains controversial among some union leaders, changing circumstances and the deteriorating financial condition of Canada Post appear to have shifted member sentiment. The Crown corp recently reported a record $1.57 billion loss in 2025, followed by a $205 million loss in the first quarter of 2026, highlighting the need for operational changes as mail and parcel deliveries continue to decline. The new agreement includes wage increases of 6.5% and 3% in the first two years and ends a labour dispute that has weighed on Canada Post, its employees, and customers for over two years. No need to send out holiday cards in July for December arrival this year. 

Not done yet. Serena Williams’ résumé speaks for itself; 23 Grand Slam singles titles, 73 tour victories, and a career that helped redefine women’s tennis. Widely regarded as the GOAT of the women’s game, Williams is returning to competition at age 44 after stepping away nearly four years ago, beginning with a doubles appearance at Queen’s Club ahead of Wimbledon. Whether it’s a serious bid for another major or simply a competitor who missed the game, it’s hard to blame her. Retirement often sounds better in theory than in practice, especially for elite athletes who have spent decades chasing excellence on the biggest stages. Many eventually find their way back to what they know best. For perhaps the first time in her career, however, Williams returns as an underdog, attempting a comeback after years away from the tour. If history is any guide, betting against Serena has rarely been a winning strategy. 


Diversion: Packing heavy
 

Base metals are getting a boost as unresolved conflict in the Middle East and optimism over demand helped push prices higher. Copper is climbing towards $14,000 a ton, while aluminum advanced to the highest level in more than four years, fueled by bets on tighter global supply. Aluminum supply is under pressure as the U.S. struggles to resolve its war with Iran, while copper traders are bracing for a crunch tariff decision by the Trump administration. Prices are also benefiting from bets on assets linked to AI and the energy transition. Tin, which is used in electronics soldering, is now trading near a record high. Analysts have also become bullish with Goldman Sachs raising its end-of-year copper forecasts by more than 10% in a note earlier this week, while Citigroup last month said aluminum was facing its most bullish supply-demand conditions in at least half a century.