Good afternoon. In today’s letter we’re covering: 

Today’s reading time is 3 minutes.

Investors are rotating out of big tech and into what some are calling "HALO" stocks that they believe are better able to survive AI disruption. These companies are defined by their “heavy assets, low obsolescence” business models. Think fast-food chains, oil companies, and tractor makers — businesses you can't disrupt with an AI agent. Meanwhile, stocks of everything from software companies to insurers to real estate agencies are crashing as investors decide that AI models can do pretty much everything they offer at a fraction of the price. Consumer staples, on the other hand, have posted their best start to a year on record. The shift accelerated after AI announcements wiped hundreds of billions off software and financial stocks in days. Nvidia's earnings Wednesday could be a major test of whether the AI hype trade has more room to run.

Canada's major banks are expected to post higher profits as earnings season kicks off this week. Scotiabank will report first tomorrow, followed by BMO and National Bank on Wednesday, and RBC, TD and CIBC on Thursday. Analysts expect mid-single-digit profit growth, driven largely by strong trading and wealth-management revenue that's offsetting softer loan demand from consumers and businesses. Credit losses — the money set aside for bad loans — should tick up only slightly, with no signs of major financial stress despite tariff uncertainty. Bank stocks are up about 4% this year, trailing the TSX's 6.5% gain.

A U.S. fund manager called Blue Owl Capital blocked investors from pulling their money out of one of its funds, and it's sending ripples through financial markets. The fund is part of a fast-growing US$1.8-trillion industry called private credit, which are essentially companies that make loans outside the traditional banking system. The problem: some of these loans are going bad, and when investors can't get their cash back, it raises uncomfortable echoes of the 2008 financial crisis. Blue Owl's stock has dropped nearly 30% this year, and big names like JPMorgan's Jamie Dimon have warned of cracks in the sector. For Canadian investors drawn to private credit funds for their higher yields, it's a reminder that those returns come with real liquidity risk: you might not be able to cash out when you want to.

Quick check:

Why it matters: Canadians hold billions in unclaimed bank balances, forgotten RRSPs, and orphaned pension plans. These accounts don't send statements if you've moved, and they're not doing you any good sitting dormant. The Bank of Canada holds unclaimed balances after 10 years of inactivity, but you can find them before that.

If this is you: Search your name on the Bank of Canada's unclaimed balances database. It's free and searchable. Then call any former employers and ask HR if you left a pension or group RRSP behind. If you find money, consolidate it into your main accounts. No point managing six different RRSPs across three provinces.

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