The CEO of Microsoft’s AI division making some bold claims; most of what lawyers, accountants, and other white-collar professionals do every day could be automated within the next 12–18 months. (link to video)

Interesting clip from Marc Andreesen, it is still very unclear where the value is going to accrue through this AI build out. (link to video)

Retail investors are once again buying the dip in software. The habit has been reinforced for years, yet in as business models face potential existential crisis, the danger is that a dip can still become a slide. (@KobeissiLetter)

I continue to flag that the U.S. labor market is softer than headline numbers suggest. Ex-healthcare, the economy has been losing jobs since early 2024.

If cuts are being driven by AI-enabled efficiency, profits and employment can move in opposite directions. Margins may hold up, even as displacement builds beneath the surface. But that divergence does not make the problem disappear. It simply migrates from corporate income statements to the political arena. If AI-related job losses broaden, the probability rises that policymakers reach for income supports or similar fiscal responses. More support ultimately means more liquidity, and historically that has been fertile ground for scarce stores of value such as gold. (@Malone_Wealth)

These are the YOY job changes. Healthcare and local government are 2 of the 3 largest drivers of job growth. Doesn’t scream raging economy. (Bancreek)

Gold was highly correlated with real rates for decades before diverging in early 2022. I disagree with the chart, I think the turning point was the seizure of Russian assets rather than the Fed raising rates. (Apollo)

Are we moving back to a world where gold is the international reserve assets if the Americans can’t be trusted?

Some weekend reading on the theme above from Hugh Hendry but where Bitcoin fits in. (full note without paywall)

You are also underestimating the scale of this capex build out. It’s 5x larger as a % of GDP than the U.S. interstate build out. (@MikeZaccardi)

If we are serious about emissions, the conversation starts with China. India is next in line.

As a follow-up from the energy independence note, nuclear is appealing due to the limited critical metal requirements compared to other clean generation. (IEA)

While Canada weighs closer ties with China, Beijing has already moved aggressively across LATAM.

I spoke to someone on the ground in Jamaica tell a familiar story. The projects look impressive, but the economics can be punishing. Usage is limited, revenues disappoint, and the debt remains. (@amazingmap)

This chart perfectly encapsulates the current headwinds for Private Equity. While the average exit premium sat at 29% from 2010–2021, that figure turned negative in 2025. If this trend persists, it will continue to suppress exits and likely deal the heaviest blow to secondary strategies. (@HayekAndKeynes)

Private Equity firms frequently highlight a stark structural shift in the markets: the number of publicly traded companies has plummeted by 50% since 1996. (Apollo)

Despite markets hitting all-time highs, the IPO window remains largely indifferent. The days of the 90s-style public listing boom have vanished, replaced by a preference for staying private longer. (@dailychartbook)

Capital is becoming increasingly top-heavy. The top 10 funds now capture nearly 50% of all fundraising dollars, a significant increase in market share compared to previous cycles. (illiquid Insights)

I show this data a lot but it’s shocking. While the S&P 500 has surged 76% over the last three years, the median Venture fund from the 2021–2024 vintages have delivered a meager 2-3% return. (Angellist)

A more granular look at the data provides the necessary counterpoint: performance remains a game of extremes. The 90th percentile of the 2017 vintage is sitting at an impressive 11x multiple. (Angellist)

A textbook case for diversification: while the broad index sits just a hair below all-time highs, several prominent individual stocks have cratered by 50%. (Ritholtz)

January’s nonfarm payrolls surprised to the upside at 130k (beating the 70k consensus). However, a closer look reveals a fragile foundation; the gains remain almost entirely driven by the healthcare sector. (Augur Digest)

In another sign of labor market softening, the inflation-adjusted starting salary for college graduates has dropped 8% YoY to approximately $54,500, a six-year low. This appears to be a classic case of nominal wage stagnation being eroded by persistent inflation. (@KobeissiLetter)

In an increasingly multipolar world, resource hoarding is becoming the new norm. We are already seeing this play out with a massive surge in copper inventories triggered by shifting tariff policies. (Bloomberg)

As earnings season wraps up, the data shows double-digit YoY growth with a refreshing lack of major disappointments.

IT, Communications, Healthcare, and Energy led the charge, with 90-100% of companies in these sectors beating analyst expectations.

It wasn't just a "low bar" beat. Wall Street kept expectations steady, and 2025 estimates ended right where they started. Looking further ahead, 2026 earnings projections are already trending upward.

U.S. electricity prices rising at almost 7% YoY and substantially higher than broader inflation (Gavekal).

The primary constraint on U.S. energy expansion lies in grid deployment. New generation capacity faces prolonged interconnection queues that vary significantly by region, introducing risks that bridge supply chain volatility, interstate regulation, and political friction. While the U.S. aims to accelerate transmission projects, persistent congestion may force a choice: either accept material caps on demand growth or pivot toward off-grid, 'behind the meter' solutions like fuel cells and gas engines.

The grid clearly can’t keep up as data centers have resorted to behind the meter solutions. (@curious_founder)

After two decades of stagnant demand, U.S. forecasts now project a significant surge in load growth. (Bridgewater)

Global electricity demand is projected to quadruple from 2020 levels by 2030.

European electricity prices are broadly uncompetitive when compared to North America and especially Asia. While it might not seem like a big issue, economic activity is energy transformed, cheap energy enables productive growth. (Bridgewater)

China installed twice as much solar capacity in the first half of 2025 than the rest of the world combined.

But the majority of Chinese energy consumption still comes from coal. (Bridgewater)

While Europe leads the world in renewable integration, it remains acutely dependent on fossil fuel imports. In an increasingly multipolar world, energy security has become synonymous with national sovereignty. The continent must secure its own energy destiny to avoid vulnerabilities where geopolitical adversaries can weaponize supply—ensuring that regional stability is never compromised by a sudden 'turning off of the taps' during peak winter demand. (Bridgewater)

The U.S. is moving to secure its renewable energy supply chain as China leverages its dominance over the rare-earth pipeline. While the United States has achieved energy independence within the traditional fossil fuel landscape, it remains dangerously behind in the critical mineral infrastructure required for a renewable future. (Bridgewater)

China is the opposite, they have built capabilities to lead renewable supply chains but are dependant on fossil fuel imports excluding coal.

China DOMINATES renewable supply chains. Leaving China borderline monopolies was probably a mistake.

Europe remains far from energy self-sufficiency; consequently, it functions as a 'price and term taker' in global markets. While this dependency was manageable during periods of geopolitical stability, it has become a critical vulnerability in the current era of heightened conflict.

Investors questioning CAD in light of the US deficit must face a harsh reality: Canada’s fiscal health is equally concerning. Canada now ranks fourth in total indebtedness among 34 OECD countries. With aggregate household, corporate, and government debt hitting 377% of GDP, Canada’s burden is surpassed only by Luxembourg, Japan, and France. (The Hub)

The high debt levels are disproportionately driven by household balance sheets. The US had a similar problem in 2008, where this debt was effectively transferred to the balance sheet of the country. (The Hub)

Most analysis doesn’t include Canadian Provincial debt making debt levels appear artificially low. Canada still makes the top 6 for government debt as a % of GDP. (The Hub)

Ray Dalio lays out what countries do when they have debt problems. It likely means a weaker currency and disappointing real returns for fixed income investors. Diversifying globally is prudent. (link to video)

Most of the West is in the same situation, which is pushing investors into gold.(@robin_j_brooks)

Some of the Canadian banks are forecasting rising Bank of Canada policy rates this year. I highly doubt it. (Daniel Foch)

Canada's January 2026 labour force statistics are dismal, with the private sector shedding 247,000 jobs and the public sector losing 10,200. (Kirk Lubimov)

And consumer insolvencies just hit the second highest level ever, only behind 2009. Yet the TSX 60 is very near all time highs. Either the market is complacent or anticipating that we print our way out. Either way, it’s not a good situation.

We’ve seen what AI disruption is doing in public markets, it is likely also disrupting Venture portfolios that are already struggling. The median Venture fund across vintages is abysmal. (@BarbarianCap)

But if you own an AI rocket shape, the speed they are scaling at is insane. Hard to fathom a 2 year old company generating a billion dollars of revenue. (@BarbarianCap)

International equities are quietly out to a big lead against US equities for the second year in a row. (@MikeZaccardi)

And international equities still look cheap relative to the US but lack AI exposure, we will see if that is a good thing or a bad thing. (@MikeZaccardi)

Amazing to see the market at all time highs but consumer sentiment in the dumps. This indicator is broken. (@MikeZaccardi)

Hard to believe the S&P 500 was only down 0.2% last week. The market drawdown hit in two waves, first as a positioning unwind triggered by an AMD miss, which saw software sell off 10% on the week and a momentum drawing down almost 8% on Wednesday. The second as a macro-driven sell-off sparked by weak labor data. Despite fundamentally strong results and impressive Cloud growth from Alphabet and Amazon, both stocks were dragged down by concerns over rising capital expenditures and crowded positioning. Ultimately, even solid performers like AMD couldn’t overcome sky-high expectations, as the debate intensified over whether the massive infrastructure spend for AI will deliver timely returns against a softening economic backdrop. Consumer Staples were the weeks top performer as the market deemed the sector immune from AI and Consumer Discretionary was the worst performing sector.

10Y yields were largely unchanged in both Canada and the US. Gold rebounded but silver and specifically, crypto melted down.

While many sectors moved higher last week, software, alternative asset managers, and crypto traded as if they were in a crisis. Much of the anxiety traces back to fears that AI platforms such as Anthropic’s Claude could compress margins and weaken competitive moats across the software stack.

Hedge funds appear to be stepping aside. Asset-light models that once justified premium multiples are being reassessed as investors question how durable those advantages really are.

Retail investors, however, seem to disagree. The iShares Software Sector ETF (IGV) recorded a combined $1.5 billion of inflows on Wednesday and Thursday, the second-largest two-day total on record. (@KobeissiLetter)

A clear bifurcation is emerging within software, not all software will be disrupted. Human-interface SaaS is being repriced aggressively, while bot- and infrastructure-oriented SaaS continues to hold up. Periods like last week, when both sell off indiscriminately, tend to create opportunity.

In addition, what happens to companies like Shopify who are aggressively embracing AI but new AI capabilities could mean anyone could create a website; is the moat wide enough? (Full post)

But the market loved the industries that had very limited AI exposure last week.(@zoomyzoomm)

The pressure has not been limited to equities. The BDC complex has been hit hard, with the group now yielding roughly 13.8%. Select names are north of 20% as markets price in dividend cuts, and the sector trades at an average ~19% discount to NAV. (Raymond James)

Historically, BDCs have only dislocated to this degree during periods such as the Global Financial Crisis, the pandemic shock, and the 2022 drawdown. The open question is whether this is another opportunity created by panic selling, or the start of something more structural. (@JulianKlymochko)

One of the more curious valuation snapshots making the rounds: Walmart currently trades at a higher P/E multiple than Amazon. Not easy to rationalize. (Coatue)

Is this the most important chart for US equity markets? Max concentration in the S&P 500 and the large companies are no longer returning cash to shareholders.
(BCA)

This is an interesting anecdote on the challenges of running a Private Equity business from a former Warburg Pincus partner. (@_inpractise)

Good luck out there!