Trading Day for Friday, June 26, 2026

Key Concepts

• Strait of Hormuz: A critical maritime chokepoint for global oil transit; recent reopening has led to a decline in oil prices.
• QNX Platform: BlackBerry’s safety-certified operating system for automobiles and industrial robotics.
• CUSMA (Canada-United States-Mexico Agreement): The trade agreement currently undergoing a mandatory review process.
• AI Infrastructure Investment: The massive capital allocation toward AI-related hardware, software, and data centers.
• Inflationary Pressure: The impact of volatile oil prices and CPI data on central bank interest rate decisions.
• mRNA Technology: Moderna’s platform for vaccine development, specifically for flu and COVID-19.

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1. Market Overview and Economic Indicators

• Oil Markets: Prices fell significantly (nearly 4%) as the Strait of Hormuz reopened. Exports are at approximately 75% of pre-war levels. Oman has signaled that the "pre-war status quo" has changed, potentially introducing new navigation or depollution fees.
• Equity Markets: The TSX saw modest gains (0.3%–0.4%), driven by the materials (gold) and infotech sectors. US markets (S&P 500, Dow, Nasdaq) experienced a volatile week, characterized by a tech-sector slide followed by a late-week rebound.
• Inflation: CPI data remains a concern, with the US at 4.2% and Canada at 3.2%. Analysts view oil prices as a primary driver of inflation, complicating interest rate outlooks for the Fed and the Bank of Canada.

2. Corporate Performance and Strategic Shifts

• Corus Entertainment: Reported a 16% revenue decline in Q3, missing analyst estimates due to weak TV advertising demand, despite successful cost-management initiatives.
• Sherritt International: Faces potential liquidity issues following expanded US sanctions on Cuba, which triggered early repayment clauses in their $79.5 million credit facility.
• BlackBerry: Successfully transitioned into a software-only company. CEO John Chen highlighted the QNX platform, which powers over 275 million vehicles and is expanding into robotics and medical instrumentation. The company emphasizes its "safety-critical" certification (ISO 26262) as a competitive moat against open-source AI agents.
• Moderna: CEO Stéphane Bancel reported a 9-0 advisory committee vote in favor of their mRNA flu vaccine. While not currently in the 2024 revenue guidance, the company expects it to be a meaningful growth driver by 2027.

3. Investment Perspectives and Frameworks

• AI IPOs: Michael De Hall (De Hall Investment Partners) noted that high-profile companies like OpenAI may delay IPOs until 2027 to avoid the volatility seen with SpaceX, which debuted at $135, spiked to $220, and subsequently declined.
• Valuation Concerns: Many AI-focused firms trade at high multiples (e.g., SpaceX at 100x revenue), leading investors to reassess whether they are willing to pay for "future profitability."
• Stock Picks:
  • Broadcom: Viewed as a diversified AI compounder with strong free cash flow.
  • Berkshire Hathaway: Recommended as a high-quality defensive play with a $400 billion cash stockpile.
  • JP Morgan: Favored for its "best-in-class" balance sheet and ability to benefit from a "higher for longer" interest rate environment.

4. Trade Policy: The CUSMA Review

• Framework: The mandatory review of CUSMA begins July 1st. Lachlan Wolfer (KPMG Law) argues that Canada should prioritize "trade stability" over a formal new agreement.
• Key Argument: The status quo is currently favorable for Canada, with an average effective tariff rate of 4.5% compared to the 12% global average imposed by the US.
• Perspective: Businesses are moving through the "five stages of grief" regarding trade, eventually reaching "acceptance" of a period of managed uncertainty under the current US administration.

5. Synthesis and Conclusion

The market is currently navigating a transition period defined by geopolitical uncertainty in the Middle East, the maturation of the AI investment cycle, and shifting trade dynamics in North America. While tech stocks face volatility due to IPO timing and valuation concerns, defensive sectors and high-quality compounders (banks, infrastructure-focused software) remain resilient. The overarching theme is a shift from rapid, speculative growth toward a focus on profitability, regulatory compliance, and long-term operational stability.