💼 Plus: How “messy jobs” will beat AI Special Edition: Q3 Market Report October 5, 2026 Sign Up | View online Canada’s Most-Read Financial Newsletter Warner Bros. In This Issue 8 min read Spiking bond yields are scaring the bejesus out of investors Plus! 📡 Breaking up with Starlink 🎞️ Prayers for Letterboxd The Idea of the Week Have AI bubble fears created a bunch of bargains? by Peter Arkle Don’t tell Michael Burry, but most level-headed investors have moved on from fears of an AI bubble to a more modest hesitation: surely the AI boom can’t keep up like this, can it? But what if it doesn’t have to? While prices for U.S. and Canadian stocks are up more than 12% this year, profits have risen so fast that valuations keep getting cheaper. From a price-to-earnings perspective, in fact, stocks are a relative bargain right now. The S&P is trading at 19x earnings — 15% cheaper than on Jan. 1 and right in line with its 10-year average. Canadian stocks are at 15x, down 8% since Jan. 1 and back to their 10-year average. (That’s a far cry, by the way, from the pre-bubble environments in 2000 or 2021.) At those multiples, investors could do just fine even if profits do slow. As long as they don’t nose-dive. Q3 Report Card June 30 – September 30 TSX: +1.7% (+11.6% YTD) S&P 500: +3.0% (+12.3% YTD) Magnificent 7: +10.7% (+10.6% YTD) Brent Crude Oil Futures: +68.1% (+68.3% YTD) Biggest Canadian Gainer* Shopify (+30%) (-3.3% YTD) Biggest Canadian Loser* Telus (-19.1%) (-36.7% YTD) *Universe: TSX 60. Total returns shown in local currency. TradingView data. Bloomberg Mag7 index shown for Mag. 7. Data through September 30 close. What Happened Last Week Important Carney wants to wean Canada off Starlink. It won’t be easy. Lost in all the headlines from the PM’s recent New York Times interview was his striking declaration that there’s “no question” Canada needs to diversify away from Elon Musk’s satellite-internet company, which is a lifeline to half a million Canadians, especially those in rural areas. The issue here is national sovereignty, and Starlink is (1) privately owned by a foreign multibillionaire who (2) is deeply distrusted by Canadians and (3) has already proved willing to shut down service on a whim, a risk that Carney said he “can’t unsee.” Which might explain why Ottawa gave Telesat, a Canadian company, nearly $3 billion to build a $7-billion Starlink competitor. But for now, even Telesat relies on SpaceX to deploy satellites, and its competing technology is still years away. Interesting Big suitors are lining up to buy Letterboxd. Users give the idea 1 star. Ever since Canadian private-equity company Tiny signalled it would sell its 60% stake in the beloved movie-buff app — whose value has quintupled since Tiny acquired it four years ago — fans have been bracing in horror as suitors like A24, Sony, and The New York Times throw their hats in the ring to buy it. And no wonder: Letterboxd is one of the few online forums that hasn’t been ensh*ttified by ads or AI slop (RIP, Reddit), and a sale to a media company would surely change that. If you don’t want AI to eat your job, make it a mess. That’s a key idea in the new book Messy Jobs: The Work That AI Cannot Reach. As co-author and economist Luis Garicano explained last week, jobs with a high degree of “messiness” — complexity, unpredictability, human interaction, etc. — will benefit the most from AI as it automates rote tasks, giving these workers more time to deal with clients/colleagues and mull ideas. Doctors, entrepreneurs, and salespeople fit the messiness bill. As for the rest of us, Garicano says the good news is most jobs are messy to some degree, which helps explain why AI has yet to cause economy-wide layoffs. —Jenna Benchetrit & Jared Sullivan Finance 101 Cash: the slow portfolio killer There are heaps of reasons to feel anxious now. So it’s no shock that retail traders have shoved a record US$3 trillion into cash funds. The hitch? Cash, while safe short term, is a drag on your portfolio, with an annualized real return of -1.4% over the past two centuries. Keep some cash in an emergency fund, sure, but remember that holding a diversified stock portfolio has historically been one of the surest ways to hit your savings goals. From Our Sponsor The FOMO Index by Stacey Woods Important 🧠 Trump signs order to rename artificial intelligence “super intelligence.” No plans yet to reclassify the U.S. as an “artificial power.” Source 🍟 “You want fries with that? Oh yeah, how badly?” McDonald’s using AI to set prices based on your willingness to pay. Source 🏒 Hockey Night in Canada is returning with only women’s hockey. Girl dads looking forward to one night a week they can take off the tutu. Source 🍥 Little Debbie is back on Canadian shelves after four years away. Will only answer to “Debra” and acts like she doesn’t even know May West. Source Crash & Burn To the Moon 💊 StatCan reports Toronto’s wastewater contains the country’s highest levels of MDMA. Torontonians are smart — they know if you’re gonna roll, you gotta stay hydrated. Source 🐍 Manitoba community overrun with snakes. Could be worse — could be blood, frogs, lice, flies, pestilence, boils, locusts, hail, darkness, and killing of the firstborn. Source 🐕‍🦺 Research finds that dogs listen to consonants more than vowels. Might be why “heel” is less effective than “attack.” Source 📝 Manitobans who miss work no longer have to provide sick notes. They can just gesture broadly toward the snakes. Source Who Cares? The Big Important Story Bonds built the modern world. Now they’re spooking investors For the first time in decades, bonds are not boring. The yield on 10-year U.S. bonds breached 5.6% last week — highest since 2002 — while Canada’s is hovering near 4%. That’s a marked departure from the sub-1% yields common throughout the 2010s. The surging yields mean that the cost of borrowing is rising for governments and normal folks alike. Good thing Robin Wigglesworth, editor of the Financial Times’s Alphaville blog, just published a well-timed book on the subject called A Fabulous Debt: The Epic Story of How Bonds Built the Modern World. We asked him to help us understand what’s going on today. What exactly is so ‘epic’ about bonds? The bond market is an almost magical technology: it pools small sums from thousands, even millions, of people into gushing rivers of capital. It’s the stock market’s boring brother — older, bigger, more powerful, and vastly more important. All the big projects and wars throughout history needed money, and that money has almost inevitably come from the bond market. Give us an example. My go-to anecdote is that England defeated Napoleon not simply because of its strategic brilliance but because it could fund its military almost infinitely through the great British bond market, while France struggled to borrow because it wasn’t considered creditworthy. Napoleon joked that Britain was a nation of shopkeepers, and he had a point. Those shopkeepers’ savings financed Britain’s victory and helped establish it as one of the world’s first superpowers. So it all came down to trust, right? Exactly. In fact, in a way, bond markets helped nurture democracy around the world. If you were a shopkeeper in the Netherlands in the 1800s, you wanted to lend to countries that were likely to pay you back, and, broadly speaking, those were countries like the U.K. They’d tamed their king, introduced a parliament, and started publishing relatively transparent numbers on their finances. This allowed England to borrow money more cheaply. Incredible. Let’s fast-forward to the present. Why are yields surging? Yields rise whenever investors demand more compensation to hold bonds, often because of larger economic concerns. And one of those concerns now is the size of the U.S.’s US$40-trillion debt. Plus, the U.S. Fed’s new chairman, Kevin Warsh, initially seemed unwilling to raise rates to contain inflation, which spooked investors. He has changed his tune. But until inflation is under control — and the war on Iran isn’t helping — the bond market is going to be jittery. Should Canadians be paying attention to U.S. bonds? For sure. U.S. bonds are the global benchmark, so they affect yields everywhere. It’s like we’re all chained to a drunk dragon and along for the ride, whether we like it or not. Big tech has issued some $320 billion in bonds this year to finance its AI data centres. That’s equal to about 70% of the U.S.’s total debt issuance in 2026. Is this healthy financing or a credit mania? This is one of the most important questions now. Tech-driven booms are relatively harmless when they’re primarily financed through the stock market. The dot-com bust crashed stocks. But it wasn’t economically devastating. When these booms are driven by debt, they can be much more destructive, as we saw in 2008. That’s what worries me about AI. This interview, conducted by Claire Porter Robbins, was edited for clarity and concision. Wisdom of X Thoughts on Today’s Issue? Love it Good So so This week’s newsletter contributors: Brennan Doherty (writer), Devin Gordon (writer), Stacey Woods (writer), Jenna Benchetrit (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Maude Campbell (copy editor), Sara Black McCulloch (fact checker), Eva Grace Clement Cruz (specialist, product engagement), Lauren Edwards (production coordinator), Matthew Karasz (markets editor), Jared Sullivan (senior editor), Peter Martin (senior editor), and Devin Friedman (editor-in-chief). TWIM: Total returns shown in local currency, via TradingView. Source for cash’s -1.4% return: Stocks for the Long Run: Sixth Edition, by Jeremy J. Siegel Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 Have questions? Contact us. VIEW IN BROWSER PRIVACY POLICY UNSUBSCRIBE Wealthsimple Kids and Teens Chequing Accounts are offered by Wealthsimple Investments Inc. 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