Bond yields are climbing, energy prices are surging, and central banks are being forced to navigate an increasingly complicated inflation picture.
Simon and Dan break down what the bond market may be signaling and why higher long-term yields matter even if the Bank of Canada keeps its policy rate unchanged. They discuss the potential impact on Canadian housing, rental construction and mortgage financing, along with why inflation-adjusted home prices can continue falling even when nominal prices stabilize.
They also look at the sharp increase in diesel prices and refinery margins, what higher transportation costs could eventually mean for consumers, and whether households have enough room left to absorb another round of price increases.
The conversation then turns to monetary policy following the latest Bank of Canada decision and Kevin Warshās Jackson Hole remarks, before digging into one of the biggest risks surrounding the AI boom: financing.
With hundreds of billions being poured into AI infrastructure, rising borrowing costs and increasingly interconnected financing arrangements could become a major vulnerability. Simon and Dan discuss what happens if AI companies ultimately generate less revenue than expected, whether hyperscalers could be left with excess capacity, and why enormous technological breakthroughs can still coincide with massive capital destruction for investors.
Stocks/ETFs discussed: NVDA, MSFT, GOOGL, ORCL, TSLA, WMT, TGT, HD, LOW, DLTR, L.TO, DOL.TO.
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