AI infrastructure investment has moved upstream. The advent of ChatGPT, Claude and other AI applications fueled demand for semiconductor chips that enable the software to “think.” The demand concurrently brought about record capital expenditures to build out hyperscale data centres housing those chips. Now the bottleneck is even more basic: power. For AI, electricity is no longer a utility input; it is strategic infrastructure.

Data centre growth needs energy – a lot of it

That shift is colliding with a US grid whose expansion is constrained at multiple points: new generators are stuck in interconnection queues; interstate transmission still requires approvals across multiple jurisdictions; transformer shortages are delaying grid upgrades; and local opposition is increasingly slowing or cancelling data centre projects. North American Electric Reliability Corporation’s 2025 long-term reliability assessment warned that 13 of 23 North American assessment areas face resource-adequacy challenges over the next decade, underscoring that the issue is not only energy volume, but deliverability and reliability.

Electric Power Research Institute’s Powering Intelligence 2026 report makes the same point from the data centre side. Its “Generation and Capacity Impacts of Data Center Load” analysis finds that data centre growth could require large additions of generation and transmission capacity, but that supply-chain, siting and permitting constraints may limit how fast those additions arrive. In least-cost scenarios, incremental data centre load is met primarily by new and existing gas generation rather than carbon-free resources.

Getting power to where it’s hard to get

That naturally explains the recent order flow into large reciprocating engines. In April, the Finnish vessel engine manufacturer Wärtsilä Oyj Abp announced a 790 MW off-grid power solution for a new Texas data centre facility, using its 50SG natural gas engines. Wärtsilä explicitly framed the order around fast access to reliable power in a region where the grid cannot adequately meet urgent AI-infrastructure demand. Around the same time, the Korean shipbuilder HD Hyundai Heavy Industries Co. Ltd. disclosed that it had signed a US data centre power generation equipment contract based on its 20 MW-class HiMSEN engines, citing total capacity of 684 MW.

The appeal is straightforward. Large reciprocating engines are modular, dispatchable, fast-starting, scalable in increments and deployable closer to load than central-station plants. Compared with combined-cycle gas turbines, nuclear projects or major transmission upgrades, they can often be installed in shorter phases and avoid waiting years for grid interconnection. For a data centre developer, speed-to-power can be as important as cost-of-power.

Maintaining engine power at sea and on land

HD Hyundai Marine Solution Co. Ltd. (443060 KS) in our Emerging Markets Small Cap Strategy is the sole authorized provider of maintenance, repair and overhaul (MRO) aftermarket services to HiMSEN engines worldwide. As a HD Hyundai-affiliate, the company benefits from having HD Hyundai Heavy Industries – the world’s second largest shipbuilder and the largest manufacturer of medium-speed 4-stroke vessel engines – as a captive market. Of approximately 17,000 HiMSEN units in operation globally (most of them generating power for over 4,000 ships at sea), roughly 2,000 units are generating power on the ground.

Could data centres move offshore?

Mitsui O.S.K. Lines and Karpowership’s Kinetics have already signed a memorandum of understanding to develop what they describe as the world’s first integrated floating data centre platform, hosted on a retrofitted vessel and supplied by a powership capable of using LNG. In that scenario, vessel-engine makers are also powering the physical layer of AI.

The post From sea to shore: Vessel engines enter the AI infrastructure race appeared first on Groupe financier Connor, Clark & Lunn ltée.

AI infrastructure investment has moved upstream. The advent of ChatGPT, Claude and other AI applications fueled demand for semiconductor chips that enable the software to “think.” The demand concurrently brought about record capital expenditures to build out hyperscale data centres housing those chips. Now the bottleneck is even more basic: power. For AI, electricity is no longer a utility input; it is strategic infrastructure.

Data centre growth needs energy – a lot of it

That shift is colliding with a US grid whose expansion is constrained at multiple points: new generators are stuck in interconnection queues; interstate transmission still requires approvals across multiple jurisdictions; transformer shortages are delaying grid upgrades; and local opposition is increasingly slowing or cancelling data centre projects. North American Electric Reliability Corporation’s 2025 long-term reliability assessment warned that 13 of 23 North American assessment areas face resource-adequacy challenges over the next decade, underscoring that the issue is not only energy volume, but deliverability and reliability.

Electric Power Research Institute’s Powering Intelligence 2026 report makes the same point from the data centre side. Its “Generation and Capacity Impacts of Data Center Load” analysis finds that data centre growth could require large additions of generation and transmission capacity, but that supply-chain, siting and permitting constraints may limit how fast those additions arrive. In least-cost scenarios, incremental data centre load is met primarily by new and existing gas generation rather than carbon-free resources.

Getting power to where it’s hard to get

That naturally explains the recent order flow into large reciprocating engines. In April, the Finnish vessel engine manufacturer Wärtsilä Oyj Abp announced a 790 MW off-grid power solution for a new Texas data centre facility, using its 50SG natural gas engines. Wärtsilä explicitly framed the order around fast access to reliable power in a region where the grid cannot adequately meet urgent AI-infrastructure demand. Around the same time, the Korean shipbuilder HD Hyundai Heavy Industries Co. Ltd. disclosed that it had signed a US data centre power generation equipment contract based on its 20 MW-class HiMSEN engines, citing total capacity of 684 MW.

The appeal is straightforward. Large reciprocating engines are modular, dispatchable, fast-starting, scalable in increments and deployable closer to load than central-station plants. Compared with combined-cycle gas turbines, nuclear projects or major transmission upgrades, they can often be installed in shorter phases and avoid waiting years for grid interconnection. For a data centre developer, speed-to-power can be as important as cost-of-power.

Maintaining engine power at sea and on land

HD Hyundai Marine Solution Co. Ltd. (443060 KS) in our Emerging Markets Small Cap Strategy is the sole authorized provider of maintenance, repair and overhaul (MRO) aftermarket services to HiMSEN engines worldwide. As a HD Hyundai-affiliate, the company benefits from having HD Hyundai Heavy Industries – the world’s second largest shipbuilder and the largest manufacturer of medium-speed 4-stroke vessel engines – as a captive market. Of approximately 17,000 HiMSEN units in operation globally (most of them generating power for over 4,000 ships at sea), roughly 2,000 units are generating power on the ground.

Could data centres move offshore?

Mitsui O.S.K. Lines and Karpowership’s Kinetics have already signed a memorandum of understanding to develop what they describe as the world’s first integrated floating data centre platform, hosted on a retrofitted vessel and supplied by a powership capable of using LNG. In that scenario, vessel-engine makers are also powering the physical layer of AI.

The post From sea to shore: Vessel engines enter the AI infrastructure race appeared first on Groupe financier Connor, Clark & Lunn ltée.

Crestpoint Real Estate Investments is pleased to continue its partnership with Vestcor and Anthem Properties on King + Park, a landmark mixed-use masterplan at the gateway to Burnaby. Joined by the Mayor of Burnaby and other guests, Crestpoint, Vestcor and Anthem celebrated the project’s ceremonial groundbreaking on June 1, 2026.

Situated in a transit-oriented setting, the full King + Park masterplan includes:

• 724 rental homes in two towers over a shared podium (Phase 1 now under construction)
• Restoration of the iconic Boot Office Tower
• 512,350 sq ft of retained and restored office space (the Boot)
• 43,402 sq ft of commercial space delivered across all phases
• 1,559 strata homes (future phase)

As Max Rosenfeld, Executive Vice President and Head of Asset Management at Crestpoint, noted, King + Park is “a distinct opportunity to honour heritage and reimagine a site simultaneously,” and Crestpoint is thrilled to be partnering on a vision that will have a positive, lasting impact.

The post Crestpoint, Vestcor and Anthem break ground on King + Park appeared first on Groupe financier Connor, Clark & Lunn ltée.

Three-month annualised growth of Eurozone narrow money – as measured by non-financial M1 – slumped from 5.3% to 1.5% between January and April. UK growth fell from 3.8% to 0.7% over the same period, with a large contraction in April alone.

The nominal slowdowns compound a squeeze on real money from consumer price acceleration due to the Gulf War III supply shock. Six-month momentum of real narrow money fell to zero in the UK in April while turning negative in the Eurozone – see chart 1.

Chart 1

Real money contractions have been a recession warning signal historically. An obvious push-back is that much greater weakness in 2022-23 was not reflected in a subsequent economic slump. Negative momentum was a misleading indicator of monetary conditions then because of a large overhang from the 2020-21 money growth surge. There is no such overhang now, so dismissing current weakness on the basis of that experience is dangerous.

Broad money trends are also worrying, with nominal growth of only 3.5% and 3.6% annualised respectively in Eurozone non-financial M3 and UK non-financial M4 in the three months to April. US broad money, by contrast, expanded at a 7.6% pace over the same period (M2+ measure).

Globally, six-month real narrow money momentum fell for a second month in April, supporting the forecast of a fall in manufacturing PMI new orders during H2 – chart 2.

Chart 2

The post Alarming Eurozone / UK money data appeared first on Groupe financier Connor, Clark & Lunn ltée.

Three-month annualised growth of Eurozone narrow money – as measured by non-financial M1 – slumped from 5.3% to 1.5% between January and April. UK growth fell from 3.8% to 0.7% over the same period, with a large contraction in April alone.

The nominal slowdowns compound a squeeze on real money from consumer price acceleration due to the Gulf War III supply shock. Six-month momentum of real narrow money fell to zero in the UK in April while turning negative in the Eurozone – see chart 1.

Chart 1

Real money contractions have been a recession warning signal historically. An obvious push-back is that much greater weakness in 2022-23 was not reflected in a subsequent economic slump. Negative momentum was a misleading indicator of monetary conditions then because of a large overhang from the 2020-21 money growth surge. There is no such overhang now, so dismissing current weakness on the basis of that experience is dangerous.

Broad money trends are also worrying, with nominal growth of only 3.5% and 3.6% annualised respectively in Eurozone non-financial M3 and UK non-financial M4 in the three months to April. US broad money, by contrast, expanded at a 7.6% pace over the same period (M2+ measure).

Globally, six-month real narrow money momentum fell for a second month in April, supporting the forecast of a fall in manufacturing PMI new orders during H2 – chart 2.

Chart 2

The post Alarming Eurozone / UK money data appeared first on Groupe financier Connor, Clark & Lunn ltée.

Equity markets have continued to reach new highs despite a backdrop that, on the surface, should be far less supportive. War in the Middle East, elevated oil prices, tighter financial conditions and policy uncertainty have done little to derail risk appetite. There have been periods of volatility along the way, but none have meaningfully disrupted the broader trend higher. Instead, equities have rallied, credit markets have remained firm, and investors have repeatedly looked through shocks that, in prior cycles, may have triggered a more meaningful repricing.

The engines behind the rally

The strength in equity markets is being driven by an alignment of two forces that are both unusually powerful and highly concentrated.

At the centre is the AI-led investment cycle, which stands out not simply due to the scale of the capex cycle (Chart 1), but its structure. Investment is being driven by a small group of hyperscalers committing unprecedented sums to data centres and supporting infrastructure that by some estimates could reach USD$5 trillion over the next five years; increasingly, companies are tapping global credit markets to fund it. Credit markets, notably, are not acting as a constraint. Heavy issuance has been readily absorbed, with strong demand keeping spreads tight even as supply increases. In Canada, Alphabet’s inaugural maple bond issue amounted to a record CAD$8.5 billion and was very well absorbed. In effect, funding conditions are enabling, not limiting, the economic expansion.

Chart 1: US tech investment has surged
Source: US Bureau of Economic Analysis, Macrobond

At the same time, corporate earnings have been unequivocally strong. The S&P 500 is on track to deliver approximately 28% year-over-year earnings growth in Q1, the fastest pace since 2021. More importantly, this strength has been broad-based. Ten sectors are reporting earnings growth, with seven sectors posting double-digit gains, spanning technology, financials, industrials and materials (Chart 2).

Chart 2: US earnings growth strong and broad-based
Source: FactSet. Note: As of May 21, 2026

While earnings are broad, what is driving revisions, sentiment and capital allocation is a relatively small group of AI and AI-adjacent companies. Yet despite the scale of investment, its direct contribution to GDP growth is still limited. What makes the current environment unusual is that the rally is not purely speculative, as earnings are delivering. So long as the combination of broad earnings resilience holds alongside a concentrated growth engine, the path higher can remain intact.

Disappearing downside risks

If the engine explains the direction of markets, the persistence of the rally reflects the repeated failure of risks to materialize. Geopolitics is the clearest example, with the disruption in the Strait of Hormuz raising oil prices significantly, but not to levels consistent with the scale of the shock. Meanwhile, other macro risks are also being largely looked through. Labour markets continue to soften, though this appears to be bottoming, leaving employment and income growth still sufficient to sustain consumption.

Importantly, inflation has proven persistent. April US producer prices rose sharply, with headline PPI increasing 1.4% month over month, reflecting a surge in energy-related components. Beneath the surface, however, the picture appears benign. Core consumer goods prices in the April CPI report were flat on the month, and core services, while sticky, have not accelerated meaningfully (Chart 3). Additionally, the transmission mechanism appears weaker than in prior cycles – including the post-pandemic period – when rapid wage gains and highly stimulative fiscal and monetary policy reinforced inflation across the economy.

Chart 3: Core services prices relatively contained
Source: US Bureau of Labor Statistics, Macrobond

Markets are not ignoring risks – they are observing that those risks are not translating into negative earnings or growth outcomes and are adjusting accordingly. With each risk that passes without consequence, markets grow more conditioned to look through shocks. Concern fades faster, and positioning rebuilds more quickly.

What could break this positive risk sentiment?

Bond yields have been moving higher, with front-end rates rising sharply and yield curves flattening, a combination typically associated with tightening financial conditions. Since the start of the conflict, US 10-year yields have risen materially, and 30-year yields have breached the psychologically important 5% threshold. Front-end rates have risen even more aggressively, reflecting both inflation pressure and resilient growth. At the same time, risk assets have continued to rally alongside this move, an unusual late-cycle dynamic that is resulting in a system drifting toward ever higher interest rates. Interestingly, the same forces supporting risk assets are also contributing to this tightening. The AI-driven investment cycle is sustaining demand, reinforcing inflation pressures (Chart 4), and keeping policy more restrictive than markets might otherwise expect. In that sense, the optimism driving the rally is also what prevents policy from easing.

Chart 4: Near-term inflation pressures building
Source: US Bureau of Labor Statistics, Macrobond

This creates a growing tension. Historically, higher discount rates and tighter financial conditions have weighed on equity valuations. Policy adds another layer of uncertainty. Central banks are moving away from an easing bias, with growing inflation risks. They are concerned about allowing inflation expectations to become unhinged from their target levels, should the narrow commodity price shock pass through into a reacceleration of core inflation (although the current assumption is that energy disruptions are temporary and manageable). Additionally, in the US, the transition to a new Federal Reserve Chair introduces another unknown that could reverse the previous regime’s flexibility.

Portfolio strategy

In balanced portfolios, positioning remains modestly underweight equities and fixed income. This stance was implemented at the end of the first quarter as markets entered an “inflation shock first, growth risk later” phase. Recession risks have since moderated, leading equities to now trade near all-time highs, embedding relatively optimistic growth assumptions. As a result, patience and flexibility remain important. We look to add risk opportunistically during periods of market weakness or positioning-driven selloffs. We favour Canadian equities over US equities, with a secular positive view on Canada.

Within fixed income portfolios, the environment remains challenging as strong growth, sticky inflation and higher energy prices continue to put upward pressure on bond yields. Markets have steadily reduced expectations for interest rate cuts and begun to price the possibility of rate hikes in both Canada and the US. This has resulted in yield curve flattening and higher rates. We expect this trend to continue, though not in a linear fashion. Duration exposure will continue to be managed tactically with a bias to be shorter-than-benchmark, with an emphasis on flexibility rather than large directional positions.

Fundamental equity portfolios remain positioned around businesses with resilient earnings. While the broader recovery remains intact, we have paused further increases in cyclical exposure to help mitigate downside risk. We have also reduced exposure to business models most vulnerable to AI-driven disruption, while selectively increasing exposure to sectors positioned to benefit from the broader AI-related capex and infrastructure cycle, including commodity-linked industries.

The current environment continues to favour an opportunistic approach, and we look to add to risk cautiously.

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Les marchés boursiers ont continué d’atteindre de nouveaux sommets malgré un contexte qui, à première vue, devrait être beaucoup moins favorable. La guerre au Moyen-Orient, les prix élevés du pétrole, le resserrement des conditions financières et l’incertitude entourant les politiques n’ont pas fait dérailler l’appétit pour le risque. Il y a eu des périodes de volatilité en cours de route, mais aucune n’a considérablement perturbé la tendance générale à la hausse. Au lieu de cela, les actions se sont redressées, les marchés du crédit sont demeurés solides et les investisseurs ont, à maintes reprises, ignoré les chocs qui, au cours des cycles précédents, ont peut-être déclenché une réévaluation plus importante.

Les moteurs de la remontée

La vigueur des marchés boursiers est attribuable à l’alignement de deux forces exceptionnellement puissantes et concentrées.

La première étant le cycle d’investissement alimenté par l’IA, qui se démarque non seulement par l’ampleur du cycle des dépenses en immobilisations (graphique 1), mais aussi par sa structure. Les investissements sont stimulés par un petit groupe de fournisseurs de services infonuagiques à très grande échelle qui engagent des sommes sans précédent dans des centres de données et des infrastructures de soutien qui, selon certaines estimations, pourraient atteindre 5 000 G$ US au cours des cinq prochaines années; de plus en plus, les sociétés tirent parti des marchés mondiaux du crédit pour financer ces investissements. Les marchés du crédit, en particulier, n’agissent pas comme une contrainte. Les fortes émissions ont été facilement absorbées, la solide demande maintenant les écarts de taux serrés, même si l’offre augmente. Au Canada, la première émission d’obligations feuille d’érable d’Alphabet a atteint un niveau record de 8,5 G$ CA et a été très bien absorbée. En fait, les conditions de financement favorisent l’expansion économique au lieu de la limiter.

Graphique 1 : Les investissements dans les technologies ont bondi aux États-Unis
Source : US Bureau of Economic Analysis et Macrobond.

Parallèlement, les bénéfices des sociétés ont été manifestement solides. L’indice S&P 500 est en voie d’enregistrer une croissance des bénéfices d’environ 28 % sur 12 mois au premier trimestre, soit le rythme le plus rapide depuis 2021. Plus important encore, cette vigueur a été généralisée. Dix secteurs ont annoncé une croissance de leurs bénéfices, sept secteurs ayant enregistré des gains de plus de 10 %, notamment les technologies de l’information, la finance, l’industrie et les matériaux (graphique 2).

Graphique 2 : La croissance des bénéfices aux États-Unis est solide et généralisée
Source : FactSet. Remarque : Au 21 mai 2026.

Bien que les bénéfices soient généralisés, un groupe relativement petit de sociétés d’IA et liées à l’IA dicte les révisions, l’humeur et la répartition du capital. Pourtant, malgré l’ampleur des investissements, la contribution directe à la croissance du PIB demeure limitée. Ce qui rend le contexte actuel inhabituel, c’est que la remontée n’est pas purement spéculative, car les bénéfices sont élevés. Tant que la résilience généralisée des bénéfices se poursuivra parallèlement à un moteur concentré de croissance, la trajectoire vers le haut peut rester inchangée.

Disparition des risques de baisse

Si le moteur explique l’orientation des marchés, la persistance de la remontée reflète le fait que les risques ne se sont pas matérialisés à plusieurs reprises. La situation géopolitique est l’exemple le plus évident, les perturbations dans le détroit d’Ormuz ayant fait grimper les prix du pétrole de façon importante, mais pas à des niveaux compatibles avec l’ampleur du choc. Par ailleurs, d’autres risques macroéconomiques sont largement ignorés. Les marchés de l’emploi continuent de ralentir, mais ils semblent avoir touché un plancher, de sorte que la croissance de l’emploi et des revenus demeure suffisante pour soutenir la consommation.

Fait important, l’inflation s’est révélée persistante. En avril, les prix à la production aux États-Unis ont fortement augmenté, l’IPP global ayant progressé de 1,4 % sur un mois, en raison de la forte hausse des composantes liées à l’énergie. Sous la surface, toutefois, la situation semble modérée. Les prix des biens de consommation de base indiqués dans le rapport d’avril sur l’IPC ont fait du surplace pendant le mois, et les prix des services de base, bien que toujours élevés, n’ont pas beaucoup augmenté (graphique 3). De plus, le mécanisme de transmission semble plus faible que lors des cycles précédents, y compris la période après la pandémie, lorsque les hausses rapides des salaires et les politiques budgétaires et monétaires très expansionnistes ont renforcé l’inflation à l’échelle de l’économie.

Graphique 3 : Les prix des services de base sont relativement contenus
Source : US Bureau of Labor Statistics et Macrobond.

Les marchés n’ignorent pas les risques – ils observent que ces risques ne se traduisent pas par des bénéfices négatifs ou une croissance négative, et s’ajustent en conséquence. Chaque fois que le risque passe inaperçu, les marchés deviennent enclins à faire abstraction des chocs. Les préoccupations s’estompent plus rapidement et le positionnement se reconstruit plus rapidement.

Qu’est-ce qui pourrait briser cet optimisme à l’égard du risque?

Les taux obligataires ont augmenté, les taux à court terme ayant fortement grimpé et les courbes de taux s’aplatissant, une combinaison habituellement associée au resserrement des conditions financières. Depuis le début du conflit, les taux des obligations américaines à 10 ans ont augmenté considérablement, et les taux des obligations à 30 ans ont dépassé le seuil psychologiquement important de 5 %. Les taux à court terme ont augmenté encore plus fortement, en raison des pressions inflationnistes et de la résilience de la croissance. Par ailleurs, les actifs risqués ont continué de se redresser parallèlement à cette hausse, une dynamique inhabituelle de fin de cycle qui fait en sorte que le système se dirige vers des taux d’intérêt toujours plus élevés. Fait intéressant, les mêmes forces qui soutiennent les actifs risqués contribuent également à ce resserrement. Le cycle d’investissement alimenté par l’IA soutient la demande, renforce les pressions inflationnistes (graphique 4) et fait en sorte que la politique monétaire est plus restrictive que ce que les marchés auraient pu prévoir. En ce sens, l’optimisme qui alimente la remontée est également ce qui empêche l’assouplissement de la politique monétaire.

Graphique 4 : Les pressions inflationnistes à court terme s’intensifient
Source : US Bureau of Labor Statistics et Macrobond.

Cela crée des tensions croissantes. Dans le passé, la hausse des taux d’actualisation et le resserrement des conditions financières ont pesé sur les valorisations boursières. La politique monétaire ajoute une autre couche d’incertitude. Les banques centrales délaissent l’assouplissement monétaire, en raison des risques croissants d’inflation. Elles craignent que les attentes d’inflation ne soient plus ancrées dans leurs niveaux cibles si le choc étroit des prix des matières premières se traduit par une réaccélération de l’inflation de base (même si l’on suppose actuellement que les perturbations énergétiques sont temporaires et gérables). De plus, aux États-Unis, la transition vers un nouveau président de la Réserve fédérale crée une autre incertitude qui pourrait renverser la souplesse du régime précédent.

Stratégie de portefeuille

Dans les portefeuilles équilibrés, les actions et les titres à revenu fixe demeurent légèrement sous-pondérés. Cette position a été mise en œuvre à la fin du premier trimestre, lorsque les marchés sont entrés dans une phase de « choc inflationniste d’abord, puis risque de croissance plus tard ». Les risques de récession se sont depuis atténués, de sorte que les actions se négocient maintenant près de sommets historiques, intégrant des hypothèses de croissance relativement optimistes. Par conséquent, la patience et la souplesse demeurent importantes. Nous cherchons à accroître le risque de façon opportuniste en périodes de faiblesse des marchés ou de ventes massives attribuables au positionnement. Nous privilégions les actions canadiennes par rapport aux actions américaines, et nous sommes optimistes à long terme à l’égard du Canada.

Dans les portefeuilles de titres à revenu fixe, la conjoncture demeure difficile, car la forte croissance, l’inflation persistante et la hausse des prix de l’énergie continuent d’exercer des pressions à la hausse sur les taux obligataires. Les marchés ont constamment revu à la baisse leurs attentes à l’égard des réductions de taux d’intérêt et ont commencé à anticiper la possibilité de hausses des taux directeurs au Canada et aux États-Unis. Par conséquent, la courbe des taux s’est aplatie et les taux ont augmenté. Cette tendance devrait se poursuivre, mais pas de façon linéaire. La durée continuera d’être gérée de façon tactique, mais sera de préférence plus courte que celle de l’indice de référence, avec un accent sur la souplesse plutôt que sur d’importantes positions directionnelles.

Les portefeuilles d’actions fondamentales continuent d’investir dans des sociétés affichant des bénéfices résilients. Bien que la reprise dans son ensemble demeure intacte, nous avons interrompu l’augmentation des placements cycliques afin d’atténuer le risque de baisse. Nous avons également réduit la pondération des modèles d’affaires les plus vulnérables aux perturbations causées par l’IA, tout en augmentant de façon sélective la pondération des secteurs qui sont positionnés de manière à profiter du cycle plus large des dépenses en immobilisations et des infrastructures liées à l’IA, y compris les secteurs liés aux matières premières.

Le contexte actuel continue de privilégier une approche opportuniste, et nous cherchons à accroître le risque avec prudence.

The post Toujours plus haut … est-ce notre moment? appeared first on Groupe financier Connor, Clark & Lunn ltée.

New orders reached a four-plus-year high in April but DM flash results imply a pull-back in May. The forecast here is for a further decline in H2, reflecting an inflation-driven slowdown in global six-month real narrow money momentum from a February peak – see chart 1.

Chart 1

A further consideration is that orders have been boosted recently by demand front-loading and stockbuilding motivated by supply concerns, implying future payback.

PMI new orders are contemporaneously correlated with MSCI World earnings revisions, whether expressed in terms of the revisions ratio (net proportion of analyst estimates upgraded each month) or the one-month percentage change in aggregate forecast earnings per share – chart 2.

Chart 2

Both revisions measures remained strong in May but the expected new orders decline suggests a moderation, at least, ahead.

Current earnings strength is focused on the US and AI-spend beneficiaries, with downgrades in Europe, China and EM ex. Korea / Taiwan – chart 3. The suggestion of European relative weakness was echoed in the flash PMIs.

Chart 3

Sector wise, IT extended its lead, with consumer sectors continuing to suffer earnings downgrades – chart 4. The revisions ratio gaps between IT and consumer discretionary / staples reached new records in data extending back to 1995 – another manifestation of economic disparities.

Chart 4

The post Is earnings momentum peaking? appeared first on Groupe financier Connor, Clark & Lunn ltée.

New orders reached a four-plus-year high in April but DM flash results imply a pull-back in May. The forecast here is for a further decline in H2, reflecting an inflation-driven slowdown in global six-month real narrow money momentum from a February peak – see chart 1.

Chart 1

A further consideration is that orders have been boosted recently by demand front-loading and stockbuilding motivated by supply concerns, implying future payback.

PMI new orders are contemporaneously correlated with MSCI World earnings revisions, whether expressed in terms of the revisions ratio (net proportion of analyst estimates upgraded each month) or the one-month percentage change in aggregate forecast earnings per share – chart 2.

Chart 2

Both revisions measures remained strong in May but the expected new orders decline suggests a moderation, at least, ahead.

Current earnings strength is focused on the US and AI-spend beneficiaries, with downgrades in Europe, China and EM ex. Korea / Taiwan – chart 3. The suggestion of European relative weakness was echoed in the flash PMIs.

Chart 3

Sector wise, IT extended its lead, with consumer sectors continuing to suffer earnings downgrades – chart 4. The revisions ratio gaps between IT and consumer discretionary / staples reached new records in data extending back to 1995 – another manifestation of economic disparities.

Chart 4

The post Is earnings momentum peaking? appeared first on Groupe financier Connor, Clark & Lunn ltée.

China’s semiconductor ambitions returned to the spotlight following the recent meeting between President Trump and President Xi. While the US administration reportedly signaled willingness to permit exports of certain downgraded or older-generation AI GPUs into China, the more notable takeaway may have been China’s relatively muted reaction. Rather than relying on controlled access to foreign technology, China appears increasingly focused on accelerating the development of its own semiconductor ecosystem.

While the AI cycle continues to demonstrate remarkable strength, China’s push toward semiconductor self-reliance increasingly appears to represent an additional structural driver for the industry – one that could persist largely independent of the pace or duration of the current AI infrastructure cycle.

A focus on a domestic opportunity for self-reliance

The scale of the opportunity remains significant. China is already the world’s largest semiconductor consumption market, representing well over USD200 billion of annual chip demand and likely continuing to grow meaningfully over the coming decade. Yet domestic self-sufficiency across many semiconductor categories remains relatively low, leaving substantial room for domestic substitution over time. Even within analog and power semiconductors – categories generally viewed as more achievable for domestic suppliers – the opportunity remains large. Industry estimates suggest China’s power management semiconductor demand alone already represents a multi-billion-dollar market, while domestic suppliers still account for a relatively modest share. If China materially increases domestic semiconductor content over the coming years, tens of billions of dollars of annual value could gradually shift toward Chinese suppliers.

China still faces important technological bottlenecks. Advanced EUV lithography remains effectively inaccessible, while gaps persist across certain leading-edge manufacturing equipment, inspection and metrology tools and advanced materials. However, recent developments suggest China continues to make incremental progress across multiple parts of the semiconductor stack despite these restrictions. Domestic memory players have advanced meaningfully in NAND and DRAM, while progress in high-bandwidth memory (HBM), advanced packaging and other areas continues to evolve. More broadly, as the saying goes, necessity is often the mother of invention, and technological constraints themselves can become catalysts for accelerated domestic innovation.

Lessons from solar, batteries and EVs

Importantly, China has already demonstrated an ability to achieve global scale and competitiveness in industries once dominated by foreign incumbents. The country now holds leading positions across solar panels, batteries and electric vehicles, while also becoming increasingly competitive in industrial automation and advanced manufacturing more broadly. Regardless of one’s geopolitical perspective, China’s long-term willingness to commit capital, engineering talent and policy support toward strategic industries should not be underestimated.

As the AI infrastructure cycle evolves, bottlenecks have gradually expanded beyond AI accelerators and memory into broader areas of the semiconductor supply chain. More recently, power management integrated circuits (PMICs) have emerged as an area experiencing tighter supply-demand dynamics, driven by rising demand from data centres and AI infrastructure. AI servers require increasingly sophisticated power architectures, translating into higher semiconductor content and more advanced PMIC requirements. These products typically command higher pricing and more attractive margins, while stronger AI-related demand may also help stabilize pricing conditions across broader analog semiconductor markets.

Against this backdrop, we believe companies positioned within China’s domestic semiconductor ecosystem could benefit from these longer-term trends. One example within our Emerging Markets portfolio is Silergy Corp. (6415 TT), a China-based analog semiconductor company and one of China’s leading domestic suppliers of PMICs.

Why PMICs are important

PMICs are semiconductors responsible for regulating and distributing electrical power within electronic systems, helping ensure that processors, servers, vehicles and industrial equipment receive power efficiently, reliably and safely. Unlike leading-edge AI accelerators, analog and power management semiconductors are embedded across a broad range of everyday electronic applications.

Headquartered in Hangzhou, Silergy designs analog and mixed-signal semiconductors serving industrial, automotive, consumer electronics, computing and communications applications. While the company is gaining increasing exposure to AI servers and data-centre-related applications, its business remains diversified across multiple end markets, which in our view provides a more balanced way to participate in both semiconductor self-reliance and broader electronics content growth.

Silergy is already one of China’s leading domestic PMIC suppliers, yet its market share within China’s broader analog and power semiconductor market likely remains relatively small, suggesting a potentially long runway for continued share gains over time.

While market attention remains concentrated on the most visible AI beneficiaries, some of the more durable investment opportunities may emerge deeper within the semiconductor supply chain and away from the headlines. China’s semiconductor ambitions could ultimately prove to be one of the more important long-term trends still unfolding beneath the surface of today’s AI cycle.

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