An historic run

Good afternoon. ICYMI The Peak’s 2026 Emerging Leaders list dropped today. Check out all the honourees here.

We’ve been doing Emerging Leaders for five years now and it’s incredible to look back on some of our early recipients and see where they are today. Lots of names who have done big things on those lists.

In today’s letter:

— Taylor Scollon

The AI frenzy drove the S&P 500 up 16% across April and May. That performance has been exceeded only four other times since 1950, most recently in 2020 after the global economic response to COVID kicked into high gear. This run has been fueled by supersized gains in companies exposed to the AI boom, like Micron (up around 10x in the past 12 months), SanDisk (up more than 600% this year), and Dell (up 230% this year). In the few other two-month spans that have matched this recent performance, the S&P 500 has stayed green for at least some time afterward — in all cases, it was even higher six months later. Of course, past performance does not guarantee future results.

Housing prices are down 20%, but most people would like them to fall further. 55% of Canadians — including around half of homeowners — say they want housing prices to decrease, according to a new poll. That’s despite a drawdown of around 20% in the housing market since a peak in 2022, and even steeper declines in Toronto and Vancouver. Still, affordability levels have not yet returned to where they were before the COVID pandemic, and experts say the type of housing supply on the market isn’t what buyers are looking for (with too many small condos and too few family-sized homes available).

A new study found that remote work is causing a pullback in entry-level hiring. In today’s daily newsletter, I covered a new paper showing that the rise of remote work is more to blame than AI for the pullback in hiring of entry-level knowledge workers. The paper’s authors analyzed hundreds of millions of new hires and found that falling hiring rates for junior workers were associated with exposure to both remote work and AI, but that once you account for whether a job is in-office or remote, the apparent effect of AI disappears. The authors theorize that employers are reluctant to hire entry-level workers for remote jobs, as it’s more difficult to train and manage them, meaning that for all its virtues, remote work may be hurting the career prospects of younger workers.

Canadian drug manufacturer Apotex is planning the country’s largest IPO since 2021. The generic pharmaceutical maker is aiming to raise up to $1.15 billion through the process, which would make the IPO the largest since Definity Financial went public in 2021 with a $1.6 billion IPO. Apotex, of course, is a familiar name because of its founder Barry Sherman, who — along with his wife, Honey Sherman — was found dead in their home in 2017, victims of what police say is a double homicide that remains unsolved to this day.

SpaceX is set to go public and anyone with index funds is likely to end up owning a sliver. The company is targeting a valuation of US$1.8 trillion and is expected to raise almost twice as much as any other IPO in history. Some of you may be turned off by the economics of the business — it lost almost US$5 billion last year and its revenue from its space business fell in Q1 — but if you own the index, you’ll soon own some of SpaceX too. That’s because index providers have loosened decades-old rules around what companies get included to fast-track the entry of new megacaps like SpaceX, OpenAI, and Anthropic. The result is that these stocks will be part of some major indexes (they each have their own inclusion rules) in as little as a few days after going public.