Dear valued client,
Markets gained more ground this week as several key companies reported their Q1 earnings. Nvidia, for instance, reported a robust financial performance, posting a $18.8 billion profit, up 26% year-over-year, despite U.S. restrictions barring chip sales to China, a major global market. CEO Jensen Huang remains optimistic, forecasting $45 billion in revenue for the next quarter. Highlighting China’s significant AI research community, Huang noted that U.S. export controls may inadvertently bolster Chinese chipmakers by shielding them from American competition. Yet, Nvidia continues to thrive globally, underscoring its resilience and strong market position.
A federal appeals court has temporarily paused a ruling by the Court of International Trade, which found that President Trump lacked the authority to impose his sweeping “Liberation Day” tariffs of 10% or more on nearly all foreign goods, as well as additional duties on Canadian and Mexican imports, under the International Emergency Economic Powers Act (IEEPA). While the White House considers appealing to the Supreme Court, trade officials downplay the decision as a minor setback, asserting that Trump has alternative legal tools, such as imposing tariffs of up to 15% for 150 days under federal law, using Section 232 for national security-based tariffs on industries like steel and vehicles, or leveraging Section 301 to target countries for unfair trade practices, as done with China previously. However, the uncertainty surrounding these tariffs may lead key trading partners, like the EU and Japan, to adopt a cautious approach in ongoing high-stakes trade negotiations with the U.S.
Publicly traded companies are increasingly investing in bitcoin, with 114 firms now holding the cryptocurrency, up from 89 in April, driven by a nearly 50% price surge from $75,000 to a record high of nearly $112,000. Notable recent moves include GameStop’s $500 million bitcoin purchase and Trump Media’s $2.5 billion raise to build a bitcoin treasury. This trend follows the lead of Strategy (formerly MicroStrategy), which holds over 580,000 bitcoins worth more than $62 billion, transforming itself into a bitcoin-centric investment vehicle and seeing its stock soar 500% last year. However, Strategy’s valuation at 1.6 times its bitcoin holdings raises concerns about potential risks if market conditions shift. Enthusiasm for bitcoin persists, bolstered by its limited supply and supportive signals from the White House, with Vice President JD Vance advocating for reduced crypto regulations and stablecoin trading at the 2025 Bitcoin Conference.
A Bank of Canada report highlights a significant shift in the country’s labor force, noting a nearly 10% decline in the share of native-born workers from 77.6% in 2006 to 68.1% in 2024, driven by a surge in low-wage, temporary migrant workers. Since 2022, Canada has accepted over one million newcomers annually, primarily non-permanent residents like international students and temporary foreign workers, mostly from lower-income regions such as India, sub-Saharan Africa, and the Middle East. These workers, younger and lower-skilled than past immigrants, face a widening wage gap, earning 22.6% less than Canadian-born workers in 2024, compared to 9.5% before 2014. This unprecedented immigration surge, which tripled U.S. population growth rates between 2019 and 2023, coincides with negligible net births and a sharp rise in youth unemployment, particularly in retail and food services, where temporary foreign worker employment in restaurants surged by 634% from 2016 to 2023. The report suggests that the influx of low-skilled labor may be contributing to Canada’s declining productivity and per-capita GDP, potentially supporting uncompetitive businesses while depressing wages.
“Well, bitcoin is a currency. Bitcoin has no underlying rate of return. You know, bonds have an interest coupon. Stocks have earnings and dividends. Gold has nothing, and bitcoin has nothing. There is nothing to support the bitcoin except the hope that you will sell it to somebody for more than you paid for it.” – John C. Bogle
“Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy.” – Michael J. Saylor
Have a great weekend,
PW
